NZX chief executive Tim Bennett says settling the long-running dispute with the former owners of the Clear Grain Exchange would have been in both parties' interests with 11-week long trial and its five-year lead-up likely to cost the stock market operator as much as $10 million.

Speaking to shareholders at today's annual meeting in Auckland, Bennett said he couldn't comment in detail on the litigation as it's currently before the High Court, but that the stock market operator's total legal cost will amount to between $9 million and $10 million by the end of the trial, not including the time spent by internal staff in running the litigation. NZX spent $2 million on the litigation in the 2015 financial year.

"Needless to say, it would have been in both parties' interests to settle this commercial dispute before the trial," he said in speech notes published on the NZX. "Based on our assessment of the circumstances and the information available, NZX does not believe it is probable that a loss will be incurred as a result of the counterclaim and accordingly no provision has been recognised."

The dispute is into its third week of what was meant to be a nine-week hearing at the High Court in Wellington, but that's since been extended after a slow start to proceedings.


NZX claims the former owners of the grain exchange misled it with inaccurate forecasts while the vendors' counterclaim is that the stock exchange underfunded the investment meaning it would never hit targets to trigger earnout payments.

Bennett today said the stock market operator is seeing a shift in its portfolio toward New Zealand markets and specifically annuity businesses after buying funds management business SuperLife to support the launch of more exchange traded funds, while its Apteryx administration business, now called NZX Wealth Technologies, is seen as providing options to lower costs for advisers and smaller fund managers.

NZX's agribusiness has been hit by the downturn in New Zealand and Australia's primary sectors, and Bennett said he expects the stock market operator will have less exposure to that unit in the future as its market business and funds services develop.

Chairman James Miller said shareholder returns were "front of mind" for the board and management, with the grain exchange litigation and the downturn in dairy prices weighing on the share price.

"The most important thing for us to do in the near term is to continue to focus hard on delivery so that the financial results and share price appreciation follows," Miller said. "We are confident that the building blocks that we have put in place will deliver results."

Miller reiterated NZX's guidance for earnings before interest, tax, depreciation and amortisation to be between $22.5 million and $26.5 million in 2016, depending on the number of initial public offerings, secondary capital raisings, trading volumes, and the final outcome of the grain exchange dispute.

Bennett said in three years he would expect NZX's markets segment to continue to dominate revenue at around 60 percent, most of which would come from annuity streams while trading and clearing would become more important than IPOs and capital raisings.

He sees funds management revenue rising to 25 percent from 15 percent, meaning its exposure to agriculture would decline.

NZX shares were unchanged at $1.01 and have declined 5.6 percent this year. The stock is rated an average 'hold' based on three analyst recommendations compiled by Reuters with a median target price of $1.05.