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ASX Ltd reports strong profit growth and special dividend

James Mickleboro
Stock market, ASX, investing

The ASX Ltd (ASX: ASX) share price dropped lower on Thursday following the release of the stock exchange operator’s full year results.

The ASX Ltd share price ended the day 3% lower at $85.18.

How did ASX Ltd perform in FY 2019?

For the 12 months ended June 30, ASX Ltd reported a 5% increase in operating revenue to $863.8 million. This was driven by a rise in listings and issuer services due to higher initial capital raisings, stronger derivatives and OTC Markets, growth in trading services, and a lift in equity post-trade services.

And although the company reported a slightly greater than expected rise in operating expenses to $214.8 million, ASX Ltd reported a 10.5% increase in statutory profit after tax to $492 million and record earnings per share of 254.1 cents.

The ASX Ltd board declared a final dividend of 114.3 cents per share, bringing its full year ordinary dividend to 228.7 cents per share. This was an increase of 5.7% year on year.

Shareholders will also be rewarded with a special dividend of 129.1 cents per share after the company elected to return the majority of the proceeds from the sale of IRESS Ltd (ASX: IRE) to them.

The company’s managing director and CEO, Dominic Stevens, was pleased with the company’s performance and particularly its core businesses.

He said: “The 2019 financial year (FY19) has delivered a number of pleasing outcomes for ASX and our stakeholders. The strong performance of our core businesses underpinned double-digit statutory profit growth, while we have continued to invest in the operation and integrity of our systems and pursued growth opportunities that aim to make business easier for our customers.”

No formal guidance has been provided for FY 2020, but the release reveals that the “early weeks of FY20 have seen a continuation of strong volumes in futures and equities.”

Overall, this appears to be a solid result from ASX Ltd and had the market not been sold off, I suspect its shares could easily have pushed higher on Thursday.

The same could be said for Telstra Corporation Ltd (ASX: TLS). Its shares dropped 2% on Thursday despite delivering a result which was in line with guidance and market expectations.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019