ASX profit slips amid highest year of listings in over a decade

After posting a record profit last year of AU$498 million, the Australian Securities Exchange has reported just shy of AU$481 million for FY21.

gettyimages-1212643984.jpg

Image: Getty Images

The Australian Securities Exchange (ASX) has reported its financial results for the 2021 financial year, seeing a AU$17.7 million -- 3.6% -- drop in profit from its 2020 record result.

For the 12-month period, net profit after tax was just shy of AU$481 million, with revenue increasing 1.4% over last year to total AU$951.5 million. Derivatives and OTC markets accounted for AU$284.6 million, trading services for AU$265 million, listings and issuer services for AU$258.2 million of the total revenue, and the remainder was comprised of equity post-trade services.

Operating expenses came in at AU$310.3 million.

ASX managing director and CEO Dominic Stevens said the exchange saw strong listings during the period, as well as equity market activity, due in part to an ongoing surge in retail trading, but said the ASX was tempered by the effects of the Reserve Bank's current policy settings on both short-end futures volumes and interest income.

During the year, the ASX saw 176 new listings, and 199 if backdoor listings are included, which was the highest figure since 2008. 70 of these were mining firms, while 43 were tech companies.

The total amount of capital raised also grew to AU$102.5 billion -- up over 5%. Cash market trading revenue was down 5%, coming off the all-time record volumes seen during the initial stages of the pandemic.

"We continue to progress ASX's once-in-a-generation technology transformation, which will help us make business easier for our customers and underpin ASX's long-term sustainability," Stevens told shareholders.

This includes the CHESS replacement project.

The ASX has been building the world's first, actual industrial-scale blockchain use case -- a new post-trade solution to replace its legacy Clearing House Electronic Subregister System (CHESS) platform, which has been running for around 25 years.

Stevens last February said the system would be ready for industry-wide testing the following July and that full-functionality could arrive by April 2021. However, in March 2020, the ASX announced it had revised the implementation timetable for replacing CHESS and would consult with CHESS users as a result of the COVID-19 pandemic.

The ASX in June then said it would revise its target go-live date to April 2022.

The target was then in October revised to April 2023.

Stevens on Thursday confirmed the date has not changed.

See also: Here's what to expect from ASX's blockchain-based CHESS replacement

"When CHESS replacement goes live in April 2023, the average age of our equity technology will be at its lowest level for more than two decades," he added. "The work to modernise our technology stack has improved the performance of our infrastructure: Since 2016, there has been an 87% drop in the number of customer-impacting incidents and flowing from that a significant reduction in outages."

In November, the exchange experienced "software issues" when it went live with the refresh of its ASX Trade equity platform.

"The regrettable equity market outage last November fell short of our own high standards and the expectations we want to meet," Stevens said on Thursday. "We will learn from this experience and have already taken steps to enhance our processes and practices, including with our technology provider Nasdaq."

The CEO said the ASX is focused on delivering "enhanced customer value today" and "building financial service infrastructure for tomorrow", which he told shareholders includes digitising processes to increase efficiency and reducing risk for customers and markets and expanding products and services.

MORE FROM THE EXCHANGE