Top-of-range annual earnings expected for NZX

NZX is due to report its annual result on Thursday. Photo / NZ Herald

Stock exchange operator NZX is expected to report earnings near the top of its guidance range when it releases its annual result on Thursday.

The company's most recent guide was for its operating earnings to be in the range of $32.0 million to $35.5m for calendar year 2021, which would compare with $34.4m in 2020.

Brokers Forsyth Barr said the company finished 2021 strongly, with December's monthly operating stats reporting final divisional metrics comfortably in excess of internal targets set at the start of the year for all divisions.

Forsyth Barr noted an increasing number of job listings on the NZX website and increased its assumed headcount accordingly.

"As a result, our 2021 EBITDA forecast of $35.5m now sits at the top of the company's guided range of $32.0m to $35.5m," Forsyth Barr said.

"Despite growing labour costs, we remain attracted to NZX's strong balance sheet, track record of capital management, sustainable long-term cash generation and believe management can execute on positive top-line growth in order to offset ongoing cost pressure and generate meaningful operating leverage," it said.

Total capital raised through the exchange over 2021 reached $19.8 billion versus an internal target of $10.0b and a Forsyth Barr forecast of $15.0b.

Of this, $4.7bn was primary equity issuance.

The total compared to $17.6b recorded in the prior year, driven by secondary capital issuance as a result of Covid-related balance sheet restructuring, and second only to the $22.8bn of total capital raised in 2015.

Total value traded on the exchange was reported at $52.4 billion ($53.7b in 2020) despite the heightened volatility in the prior year which saw several months of 'super-trading' resulting from Covid-19.

"This strong operating performance in the secondary markets division was supported by the Data and Insights division which reported an elevated number of terminal and licences throughout," Forsyth Barr said.

The exchange-traded funds arm - Smartshares - finished 2021 with all-time high funds under management of $6.5 billion.

Smartshares division saw continued momentum driven by strong net cash inflows and despite a slowdown in equity markets.

The divisional performance was aided by growth in Kiwisaver which saw an increase of $400m in funds under management.

The NZX, in its latest update, said it Wealth Technologies division had a record $11b of funds under administration.

The exchange said last week that it had completed the acquisition of the management rights of the ASB Superannuation Master Trust.

The acquisition - through Smartshares - represented a step-change in scale for NZX's passive funds management business.

NZX said the acquisition would add more than $1.8b in retirement savings from more than 17,500 members across more than 100 employer groups and will be funded from cash on hand and new debt facilities.

The financial impact of the acquisition would be included in NZX's 2022 operating earnings guidance, to be released alongside Thursday's result.