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HHG Presentation - NZX Group CEO Mark Peterson and CFO Bevan Millar

Hamilton Hindin Greene had the pleasure of hosting Mark Peterson (NZX CEO), and Bevan Millar (NZX CFO) earlier this week. In front of a small group of clients and advisers, Mark explained the renewed focus on cost control at the NZX Group, and how shareholders are going to benefit from growth in New Zealand’s capital market.

We looked back at the problems the NZX have overcome over the past few years. They have put the Ralec court case behind them (without paying damages), they have restructured the underperforming Agri Business, they have incurred the one off cost associated with introducing 19 new Exchange Traded Funds (revenues were up 22% in this business unit, indicating good traction), and they have successfully transitioned to a new CEO.

All of these short term costs have been incurred, laying a solid foundation for organic earnings growth over the next few years. We are seeing the benefit of this already with EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) up 38% over the first 5 months of this year.

Core Investment Strengths of NZXCore Investment Strengths of NZX

• Structural Monopoly

• Will benefit from rising tide of KiwiSaver balances

• Current low bank term deposit rates forcing investors into listed investments (Equity and Debt) in search of greater income

• Low PP&E (Plant Property and Equipment) so low maintenance capital requirements

The NZX also offer a reasonable gross yield of 7.5%p.a. for income investors. 

Please contact your adviser for more information regarding how the NZX might fit into your portfolio.HHG NZX Presentation

 

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