Nex share price climbs after profits are boosted by US rate rise hopes

 
Oliver Gill
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Chief executive Michael Spencer: Performance is strong despite tough markets

Profits at electronic broker Nex were boosted by expectations of further US interest rate hikes, the firm reported today.

Shares in the FTSE 250 firm fell in early trading before rebounding, currently up just under one per cent.

The figures

Revenue from continuing operations over the year to March increased by 18 per cent to £543m from £460m, an increase of eight per cent on a constant currency basis

Operating profit from continuing operations increased by four per cent to £145m from £139m.

Trading profit before tax increased from £110m to £114m.

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Dividends per share were 38.5p, unchanged from the previous year. Basic earnings per share for continuing operations were 23.2p.

Nex identified annual cost savings of around £25m by 2019/20. These will be used for "incremental investment for growth".

Why it's interesting

Nex also revealed today the former chief information officer of the Nasdaq will join the firm as a non-executive director.

Anna Ewing established the global technology solutions division at Nasdaq. Such experience is likely to be of assistance to Nex, which markets itself as a "financial technology company".

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She said: "This is an exciting time to be joining Nex. I believe that my previous experience at Nasdaq, CIBC and Merrill Lynch will be directly relevant to Nex as a financial technology company. I am looking forward to getting to work with the other board members".

What the company said

Chief executive Michael Spencer said: "Nex is a well-established financial technology company which... has an unprecedented opportunity to become the world's leading multi-product, global electronic transaction network for over-the-counter products and post trade services."

Our performance remains strong in a tough market environment. Nex Markets has focused on expanding its product suite to a wider client base and continues to win market share in US Treasury actives.

"Nex Optimisation continues to innovate, delivering market leading services across the transaction lifecycle that help clients solve their financial, regulatory and operational challenges," Spencer added,"

"Our priorities for 2017/18 are clear and we are excited about the future."

Through a combination of continued investment in new products, and the implementation of our transformation programme, which will focus on creating efficiencies, Nex is well positioned to deliver growth, increase divisional operating margins to at least 40 per cent and deliver value for our clients and shareholders.

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