The JSE Ltd, the listed company that operates Africa’s largest bourse, has announced a R668m distribution to shareholders as the business remained profitable and cash generative despite a raft of delistings in recent years.
The company announced a 4% rise in profit after tax to R749m in the year to end-December, with headline earnings per share coming in at 917.7c, 4% higher than the previous year’s 878.9c. Robust cash generated from operations of R978m enabled the board to declare an ordinary dividend of 769c per share, 2% higher than the previous year.
The bourse recorded revenue growth across most of its business segments, with overall operating revenue up 5% to R2.7bn. Headline earnings per share (HEPS), a profit measure that excludes the effects of seasonality and one-off items, also increased 4% to 917.7c, up from 878.9c a share in the prior year.
“The JSE’s solid performance reflects the quality of our earnings and the resilience of our operating platforms within a challenging trading environment,” group CEO Leila Fourie said in its earnings announcement on Wednesday. “These results demonstrate the value of our investment strategy and provide momentum for future growth.”
The JSE suffered 23 delistings in 2022, particularly from small to mid-cap companies, partly due to the regulatory and cost burden that comes with being listed, as well as corporate action and consolidation. While this was counterbalanced by capital raising on the JSE’s new private placements platform, the bourse has tried to curb delistings through measures such as reducing free float requirements from 20% to 10% and proposing regulatory relief for smaller counters.
“We had 466 listings 20 yrs ago, now we have 302,” said Fourie. “But our market cap has grown from R1.8-trillion [20 years ago] to R22-trillion currently.”
Fourie said the JSE’s 2022 results performance was evidence that the group’s strategy to diversify revenue amid the deluge of delistings was beginning to bear fruit, as evidenced by non-trading revenue, which grew by 13% to R668m, compared with R590m the previous year. Non-trading revenue now accounts for 25% of the group’s total operating revenue, up from 18% four years ago.
Initiatives undertaken by the JSE during 2022 to expand its core business included the launch of a private placements platform that had 22 live deals at end-December, with more than R12bn in onboarded investor capital. The JSE also obtained a licence from the Financial Sector Conduct Authority to operate as an independent clearing house and central counterparty under JSE Clear, and launched an equity markets trading analytics solution under JSE Trade Explorer.
The bourse also unveiled much-anticipated reforms to its listing requirements to encourage more initial public offerings, launched actively managed exchange traded funds, and introduced transition and sustainability linked bonds. It also published its sustainability and climate change disclosure guidance to assist local companies with the increasing investor scrutiny of their environmental, social and governance credentials.
“We’ve announced a raft of very important changes,” said Fourie. “Our business model continues to evolve to meet the changing needs of market participants.”
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