Stock market operator NZX has boosted its annual dividend payment by 53% to 10c a share as strong revenue growth helped the company post an 18% rise in normalised net profit for the 2010 financial year.
Stock market operator NZX has boosted its annual dividend payment by 53% to 10c a share as strong revenue growth helped the company post an 18% rise in normalised net profit for the 2010 financial year.
Operating revenue increased 17% to $50.2 million during the year, compared to $42.8 million the previous year.
Underlying earnings before interest, tax, depreciation, amortisation and financials (ebitdaf) climbed $19% to $20.9 million, with normalised profit up 18% at $11.7 million.
Bottom line profit fell 76% to $9.3m, with 2009 having included the proceeds of asset sales.
A dividend of 10c is to be paid for 2010, compared to 6.5c in 2009.
NZX said the new dividend policy was based on free cash flow, with dividends to be paid in 2011, 2012 and 2013 to increase by not less than one cent per share each year.
“Allowing for sufficient retained earnings for appropriate bolt-on acquisitions at the $5 to10 million per annum level - should such be identified - the board has assessed the new dividend to be appropriate, sustainable and in shareholders' best interests," said chairman Andrew Harmos.
NZX said the result was delivered against a backdrop of difficult market conditions, with contributions to the result having come from across the entire business, but most notably in the areas of agricultural information, clearing house participation, technology contracts and new product development.
Operating expenditure grew to $29.3 million compared with $25.3 million in 2009, but was managed to lower levels in the fourth quarter following the completion of several large, capital-intensive projects.
“NZX has an integrated and complementary set of businesses that generate strong cash flow,” Mr Harmos said.
“NZX has now moved to a much lower capital intensity position, and it is appropriate to adopt a dividend policy that returns surplus cash to shareholders.”
