ASX Ltd (ASX:ASX) share price sneezes despite robust first-half results as CEO says sayonara

The CEO's retirement plans may have cast a shadow over the exchange's latest earnings report.

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Key points

  • The ASX share price is taking a trip to the downside amid its first-half results today
  • Most operational metrics indicated robust growth for the exchange operator
  • CEO, Dominic Stevens, announced his plans to retire from the company this year

The ASX Ltd (ASX: ASX) share price is coming under pressure today as investors thumb through the exchange operator's latest half-year numbers.

Shares in ASX Ltd opened at $86.02, a slight decrease from its previous close. The ASX share price has since remained mostly on a downwards trajectory and is now trading 5.1% lower at $82.29.

ASX share price weakens on strengthening metrics

Highlights of the first-half report are as follows:

  • Operating revenue up 6.6% from prior corresponding period to $501.4 million
  • Earnings before interest and tax up 6% to $338.4 million
  • Net profit after tax (NPAT) increased 3.5% to $250.3 million
  • Interim dividend raised 3.5% to 116.4 cents per share fully-franked
  • All time record $90 billion of capital raised through the ASX in the first half
  • Second highest number of initial public offerings (IPO) on record at 150.

What else happened during the half?

While ASX Ltd revealed robust half-year results, the operational and financial metrics appear to be overshadowed by today's announcement of the CEO's retirement.

First, let's take a look at the numbers.

The ASX managed to deliver growth across revenue and earnings due, in part, to a solid half for listings activity. This involved a number of record, or near-record, figures across its listings segment. Notably, an all-time record of $90 billion was raised through the exchange during the period.

Total capital raised$90 billion11.24%
Number of IPOs15076.5%
Listings revenue$104.1 million17%
Average traded value per day$6.2 billion5.7%

During the half, the ASX received word from the Australian Securities and Investments Commission (ASIC). In November 2021, the corporate watchdog handed down conditions for the ASX to abide by following the abrupt outage in 2020. The ASX share price waned on the news.

According to today's release, the CHESS replacement system remains on track for deployment in April 2023. Upon launch, share settlement will be handled by blockchain technology using smart contracts.

ASX CEO makes a move for the door

Now, back to Dominic Stevens — ASX managing director and CEO — and his plans to retire. The departure could be behind the falling ASX share price today.

After six years as CEO, Stevens will make for the exit some time this year. During his tenure, the exchange operator has appreciated by roughly 60% in value.

Commenting on the announcement, ASX chair Damian Roche said:

Dominic is providing ample notice of his retirement plans for which we are grateful. This is typical of his foresight, and enables a smooth transition to the best possible successor at a time when ASX will be entering its next phase of growth and innovation.

A global search for his replacement is now underway.

ASX share price snapshot

Unfortunately for shareholders, the ASX share price has been baptised by fire in the new year. Currently, the company's shares are 10.8% off where they were at the end of last year.

However, investors who picked up ASX Ltd shares 12 months ago are now sitting on a 15% gain. The company now boasts a market capitalisation of $16.78 billion.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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