6% dividend boost in FY22 yet ASX share price slides today

FY22 saw decade-high levels of listings activity on the exchange.

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Key points

  • ASX share price slides 2% 
  • The final dividend payout increased 5.7% from FY21 
  • The company has commissioned an independent review for its ongoing CHESS replacement project 

The ASX Ltd (ASX: ASX) share price is down 2.1% in morning trade, alongside a wider market slide that sees the S&P/ASX 200 Index (ASX: XJO) down 0.4%.

ASX shares closed yesterday trading for $84.64 and are currently at $82.89.

This comes following the release of the Australian securities exchange operator's results for the 2022 financial year (FY22).

ASX share price slides despite profit boost

  • Operating revenue of $1.02 billion, up 7.5% year on year
  • Net profit after tax (NPAT) increased 5.7% from FY21 to $508.5 million
  • Earnings before interest and tax (EBIT) of $689.2 million, up 7.5% year on year
  • Total expenses of $333.5 million increased 7.5% from the prior year
  • Final dividend, fully franked, of $1.20 per share, up 7.9% from FY21

What else happened during the year?

The full-year dividend payout from the ASX came to $2.36 per share, up 5.7% from the previous year. That reflected a 5.7% increase in earnings per share (EPS), which increased in line with higher profits.

The ASX maintained its 90% payout ratio to shareholders.

The company said the strong results were spurred by growth in listings and equity-related activities, while lower futures volumes threw up some headwinds.

Over the year the ASX continued to invest in technology with an eye on future growth opportunities.

What did management say?

Commenting on the results, ASX CEO Helen Lofthouse said:

ASX continues to benefit from its diversified business model. We saw decade-high levels of listings activity, particularly in the first half, with 217 new listings in the period – the highest number since FY08. And the total amount of capital raised increased 56% to $159.4 billion (excluding the BHP capital unification), a new record overall.

The Markets business benefited from higher equity trading activity and demand for commodities products. However, this was partly offset by the impact of the lower interest rate environment on futures volumes…

The strength of ASX's core business has allowed us to deliver long-term growth for shareholders during a period of significant volatility and uncertainty.

What's next?

Looking ahead, ASX said a key focus area is its customers, noting that technology is fundamental to what the company does.

Regarding the ongoing CHESS replacement project, which has faced technical issues and setbacks, Lofthouse said, "We have identified that more development is needed in parts of the application software to meet the market's scalability and resilience requirements for new CHESS. We have commissioned an independent review of the application by Accenture."

Acknowledging that it was disappointing to delay the go-live timeline for a third time, Lofthouse added, "But we all agree that new CHESS must be implemented safely and with the functionality to serve the market's needs."

ASX share price snapshot

So far in 2022, the ASX share price is down 10%. That compares to a 6% year-to-date loss posted by the ASX 200.

Motley Fool contributor Bernd Struben 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 Scott Phillips.

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