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JSE LIMITED - Summarised Consolidated Annual Results, ordinary and special dividend declarations for year ended 31 December 2018

Release Date: 28/02/2019 15:03
Code(s): JSE     PDF:  
 
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Summarised Consolidated Annual Results, ordinary and special dividend declarations for year ended 31 December 2018

JSE Limited 
(Incorporated in the Republic of South Africa)
(Registration number: 2005/022939/06)
Share code: JSE ISIN: ZAE000079711
("JSE" or "the Group")

SUMMARISED CONSOLIDATED ANNUAL FINANCIAL RESULTS AND ORDINARY AND SPECIAL CASH DIVIDEND DECLARATIONS
FOR THE YEAR ENDED 31 DECEMBER 2018

The JSE is a self-regulatory, multi-asset class stock exchange operating as a market place for the trading of financial products for 131 years. The
JSE offers deep liquidity across a wide range of tradeable products, as well as post-trade, technology and information services.

The JSE is uniquely positioned:

- as a critical product and service provider to South Africa's financial market (which is globally recognised as a centre of excellence); and
- as an interface between those who provide capital, those who need capital to fund their businesses and those who rely on returns for short-,
  medium- or long-term purposes, whether that interface is of a regulatory, service provision or influencing nature.

This announcement covers the summarised consolidated annual financial results of the Group based on International Financial Reporting
Standards for the year ended 31 December 2018.

The preparation of these annual results has been supervised by the chief financial officer, Aarti Takoordeen CA(SA), in terms of section 29(1)(e)
of the Companies Act 2008, as amended (the Companies Act). This report is extracted from the audited information, but is not itself
audited. The directors take full responsibility for the preparation of this report and warrant that the financial information has been correctly
extracted from the underlying audited annual financial statements.

FINANCIAL HIGHLIGHTS

                                                                                                                                    Group
                                                                                                                      2018               2017*            % change
Revenue (R billion) (including other income)**                                                                        2.28                2.27                  1%
Earnings before interest and tax (R million)**                                                                         932                 909                  3%
Net profit after tax (R million)                                                                                       904                 836                  8%
ROE (%)                                                                                                                23%                 23%                flat
Basic earnings per share (cents)**                                                                                 1 056.5             1 006.0                  5%
Headline earnings per share (cents)**                                                                              1 056.2               996.5                  6%
Ordinary dividend per share (cents) - declared                                                                         655                 605                  8%
Special dividend per share (cents) - declared                                                                          185                 NIL                   -

*  Following a review of the strategic fit to the Group, the Board decided to discontinue the Nautilus business within the Group. 
   Refer to note 6 and 13 in the Summarised Consolidated Annual Financial Statements.
** From continuing operations.

OVERVIEW OF RESULTS
In a year that was not without its macroeconomic challenges, we are pleased to report group earnings growth of 8% to R904 million 
(compared to a 9% decline in 2017 to R836 million). 

These results demonstrate the resilience of our multi-asset class business model, achieving a 1% increase in revenue to R2.28 billion
(compared to a 5% decline in 2017 to R2.27 billion) and a 1% contraction in operating costs to R1.35 billion (compared to a 4%
contraction in 2017 to R1.36 billion).

We remained focused on building better markets and providing value to clients by amongst others, launching the Government Bonds electronic trading platform
(ETP) and implementing the new tiered billing model in July 2018.

REVENUE
The year was characterised by inter-quarter disparity in market activity which impacted most of our asset classes in the following ways:

Primary Markets:
- Revenue declined by 15% to R155 million (2017: R181 million) due to significantly lower additional capital raising activity. Although the
  number of IPOs for the year was lower (with 12 IPOs versus the 21 IPOs in 2017) the capital raised was higher.
Capital Markets:
- Equity Market revenue was 2% lower at R499 million (2017: R507 million). This follows flat billable value traded for the full year although 
  central order book activity improved in the last quarter following an increase in colocation service activity. Colocation activity contributed
  37% to value traded (2017: 31%). The implementation of the tiered billing model resulted in an aggregate discount to clients of approximately 
  R21 million or 12% year-on-year.
- As the main index continued to lose appeal as an effective hedge in current market conditions, Equity Derivatives value traded declined by
  3%. Coupled with the 11% decline in the value of the main index Equity Derivatives revenue declined by 16% to R143 million (2017: R170 million).
- Currency Derivatives Market revenue was flat at R48 million (2017: R48 million) and can be attributed to a 9% increase in the number of contracts
  traded, offset by a dilution in the effective price.
- Record physical deliveries contributed to a 15% increase in Commodity Derivatives revenue to R78 million (2017: R68 million).
- Interest Rate Market revenue grew 12% to R56 million (2017: R50 million) as bond nominal value reached a record high, up 11% on the back
  of global uncertainty and foreign sales of emerging market assets. However, expectation of lower volatility in the local interest rate market
  decreased trading of Interest Rate Derivative contracts, with total contracts traded flat year-on-year. Revenue from the Bond ETP contributed R3 million.
Post-Trade Services:
- BDA revenue increased by 3% to R303 million (2017: R293 million) following a similar increase in the number of transactions. This reflects smaller
  transaction sizes.
- Clearing and Settlement revenue increased by 5% to R404 million (2017: R384 million), benefitting from increased central order book activity
  and smaller transaction sizes.
Information Services:
- Revenue remained almost flat at R267 million (2017: R272 million). Normalised for a prior year overstatement, revenue increased in Market Data and Indices
  by 5% and 8% respectively.

Other income increased to R82 million (2017: R52 million). Revenue growth was positively impacted by a forex gain of R26 million
(2017: R9 million forex loss) on foreign denominated assets. The JSE holds USD12 million in cash (2017: USD8 million).

OPERATING EXPENDITURE
The JSE continued its strong control of costs. As such, our operating costs decreased for the second consecutive year to R1.35 billion (2017: R1.36 billion):
- Personnel costs are 7% lower at R506 million (2017: R544 million) due to reduced headcount;
- Technology cost are 5% lower at R241 million (2017: R253 million) as a result of cost optimisation initiatives on software licences, and
  hardware maintenance and support;
- Depreciation and amortisation was almost flat at R110 million (2017: R109 million). This can be attributed to the annualised impact of project functionality that has been
  implemented offset by fully depreciated assets; and
- General expenses increased 9% to R492 million (2017: R452 million) as corporate resources were prioritised towards strengthening
  operational resilience and revenue enhancing initiatives.

The overall reduction in the cost base allowed the JSE to absorb the impact of the tiered billing model without impacting profitability.

Group earnings before interest and tax (EBIT) improved by 3% to R932 million (2017: R909 million).

Group earnings after tax increased by 8%, bolstered by:
- the effective tax rate declining to 26% (2017: 27%) with the inclusion of a prior year tax credit of R26 million;
- a higher share of profit received from associate (Strate) of R56 million (2017: R35 million), as a result of their revenue growth and the absence
  of prior year one-off costs; and
- a lower loss from the discontinued operation at R1 million (2017: R24 million).

Basic earnings per share (EPS) and headline earnings per share (HEPS) for continuing operations increased by 5% and 6%, respectively, to 1 056.5 cents
and 1 056.2 cents.

CASHFLOW AND INVESTMENT
The Group continues to be highly cash generative with net cash from operations of R913 million (2017: R977 million). Cash and cash equivalents
on hand at 31 December was R2.6 billion (2017: R2.4 billion).

We reduced capital expenditure to R174 million (2017: R187 million). However, we were able to harness additional capacity within business, as
the ITaC project reached the final stages (with go-live planned for 8 April 2019), allowing us to accelerate business-as-usual expenditure to enable
faster delivery of strategic growth initiatives.

All currently planned investments and 2019 capital requirements can be funded from the Group's own resources.

REGULATION
The group is now required by regulation to hold sufficient capital to cover relevant risks and unexpected losses for its exchange and central 
counterparty activities. The JSE meets these capital requirements and holds additional levels of capital to finance future growth opportunities. 

STRATEGIC HIGHLIGHTS AND FUTURE FOCUS
As we deliver, we are focused on building better markets. In 2018 we were very pleased to have launched the Government Bonds electronic trading platform (ETP)
after extensive collaboration with National Treasury and the Primary Dealers, on 29 August 2018. 

A tiered billing model for the Cash Equities Market was introduced with effect from 30 July 2018. This decision followed extensive formal consultation with 
members, several rounds of internal reviews and global benchmarking exercises. Each of these steps resulting in more favourable pricing for the market as a whole. 

In addition, we launched a number of other new products including: enhanced Cash Equities auction functionality; an AGM and electronic voting service in collaboration 
with one of our enterprise development suppliers, as part of our expanding issuer services business; ESG index futures contract; new racks in JSE Colocation centre;
listed Project Bonds Framework; established a new JSE International Access Point at Telehouse in London; and launched a green bond segment, with 
two new issuers: City of Cape Town and GrowthPoint.

Our 2022 strategy articulates our vision which is to be the best global platform in emerging markets. 

The key elements underpinning our 2022 strategy are to:
- Put our clients at the centre of what we do;
- Operate, to global standards, South Africa's most trusted, stable, robust and competitive market infrastructure;
- Grow sustainably across the value chain;
- Invest in and retain world-class talent; and
- Lead by example on the national agenda. 

Our 2022 strategy will continue to drive performance and shape our future. We are clear about our 2019 priorities and hence the issues 
that we need to tackle to improve our operational resilience and to achieve our 2022 strategy and to grow this business sustainably. 

To this end, our focus for 2019 will be to:
- Implement our ITaC project 1b and 1c,  on 8 April 2019. This will provide clients with robust trading and clearing technology in our 
  equity derivatives and currency markets and introduce more sophisticated trading and risk management functionality, enabling us to reduce 
  the cost of transacting in those markets over time; 
- deliver meaningful new operating revenue through business lines not currently a substantial part of the JSE income;
- maintain strong cost controls and deliver on committed cost savings by end-2019;
- embed the Agile, client-led culture embodied in the JSE Way; and
- lead by example on the national agenda and pursue the visible transformation of the business.

PROSPECTS
Our choices for 2019 commit us to the delivery of ITaC on 8 April 2019 and recognise that this gives us the opportunity to lift our heads and direct
more of our corporate resources to new and innovative initiatives that both strengthen our operating platform and grow in a manner anticipated 
in our 2022 vision.

The JSE is a largely fixed-cost business. Therefore, we will maintain our focus on costs, while making the necessary capital investments in areas 
that will enhance the Group's sustainability and diversify revenue. Our revenues are variable and largely driven by activity on the various markets 
that we operate. For this reason, we make no projections regarding the Group's financial performance in 2019.

DECLARATION OF ORDINARY AND SPECIAL DIVIDEND
The Board has decided to declare an ordinary and special cash dividend for the year ended 31 December 2018, as follows:

Dividend                                                        Annual gross amount        Withholding tax %           Net amount

Ordinary                                                        655 cents                  20                          524 cents
Special                                                         185 cents                  20                          148 cents

This is consistent with our dividend policy in terms of which we aim to grow nominal value of the ordinary dividend. In addition, now that the 
quantum of the capital requirements per the Financial Markets Act have been established and are in effect, surplus cash can be released. 

The dividends have been declared from retained earnings. A dividend withholding tax of 20% will be applicable to all shareholders who are not
exempt. The dividends are payable to shareholders recorded in the register of members of the JSE at the close of business on Friday, 22 March 2019.

In compliance with the Companies Act, the directors confirm that the JSE will satisfy the solvency and liquidity test immediately
after completion of the dividend distribution. In compliance with the requirements of Strate, the following salient dates for the payment of the
ordinary and special dividend are applicable:

Dividend paid in year in respect of financial year ended                     31 December 2018                   31 December 2017

Ordinary dividend per share                                                  655 cents                          605 cents
Special dividend per share                                                   185 cents                          Nil
Total Rand value                                                             R730 million                       R526 million
Declaration date                                                             Thursday, 28 February 2019         Wednesday, 21 February 2018
Last date to trade JSE shares cum dividend                                   Monday, 18 March 2019              Monday, 19 March 2018
JSE shares commence trading ex-dividend                                      Tuesday, 19 March 2019             Tuesday, 20 March 2018
Record date for purposes of determining the registered holders of JSE
shares to participate in the dividend at close of business on                Friday, 22 March 2019              Friday, 23 March 2018
Date of payment of dividend                                                  Monday, 25 March 2019              Monday, 26 March 2018

Share certificates may not be dematerialised or rematerialised from Tuesday, 19 March 2019 to Friday, 22 March 2019, both days inclusive.

On Monday, 25 March 2019 the dividend will be electronically transferred to the bank accounts of certificated shareholders who use this facility.
In respect of those who do not use this facility, cheques dated Monday, 25 March 2019 will be posted on or about that date. The accounts of those
shareholders who have dematerialised their shares (which are held at their central securities depository participant or broker) will be credited on
Monday,25 March 2019.

The issued share capital of the JSE as at the declaration date was 86 877 600 ordinary shares.

The tax number of the JSE is 9313008840. 

South African Reserve Bank approval has been obtained for the declaration of the special dividend.

CHANGES TO THE BOARD DURING THE PERIOD UNDER REVIEW
During 2018, and as previously announced, the following changes were made to the Board:
- At the annual general meeting held on 17 May 2018: Mr Anton Botha, Mr Andile Mazwai and Ms Nomavuso Mnxasana, independent
  non-executive directors, retired;
- Mr Nigel Payne stepped down from the Board as a non-executive director with effect from 3 August 2018, following his appointment as
  chairman of Strate (Pty) Limited;
- Mr Ben Kruger joined as a non-executive director, effective 1 June 2018, and serves on the Group Human Resources Committee and Group
  Risk Management Committee;
- Ms Fatima Daniels joined as an independent non-executive director, effective 1 October 2018, and serves on the Group Audit Committee,
  Group Human Resources Committee and Group Self-regulatory Organisation (SRO) Oversight Committee;
- Ms Faith Khanyile joined as an independent non-executive director, effective 1 November 2018, and serves on the Group Audit Committee
  and Group SRO Oversight Committee; and
- Ms Zarina Bassa joined as an independent non-executive director, effective 1 November 2018. She serves as the chairman of the Group SRO
  Oversight Committee and is a member of the Group Risk Management Committee.

We believe the Board is well diversified with an appropriate mix of skilled and experienced individuals. The new appointments specifically
enhance our expertise in financial services, regulatory oversight, banking and global business.

The following changes were made to the executive committee:

- Mr Hendrik Kotze was appointed as Chief Information Officer with effect from 1 December 2018.

NOTICE OF ANNUAL GENERAL MEETING (AGM)
Notice is hereby given that the fourteenth AGM of shareholders of the JSE will be held at the JSE on Wednesday, 22 May 2019 at 16:00, to
transact the business as stated in the AGM notice forming part of the annual financial statements. The AGM notice includes the proxy form.

Only persons physically present at the meeting or represented by a valid proxy will be entitled to cast a vote on any matter put to a vote of
shareholders.

Forms of proxy should be lodged with The Meeting Specialist by 16:00 on Monday, 20 May 2019, for administrative purposes. Any proxy form not
received by this time must be handed to the chairperson of the AGM immediately prior to the AGM.

SALIENT DATES FOR 2019 AGM
Record date to determine which shareholders are entitled to receive the notice of AGM                                       Friday, 15 March 2019
Publication of 2018 intergrated annual report and posting of annual general meeting                                         Monday, 25 March 2019
Last day to trade in order to be eligible to attend and vote at the annual general meeting                                   Tuesday, 14 May 2019
Record date to determine which shareholders are entitled to attend and vote at the AGM                                        Friday, 17 May 2019
Forms of proxy for the annual general meeting to be lodged by 16:00                                                          Tuesday, 20 May 2019

APPRECIATION
2018 was a demanding year for the JSE. As we tackle 2019, we would like to thank all our colleagues at the JSE for their hard work and
dedication. We look forward to the next stage of our journey as we embed the agile, client-led culture, embodied in the JSE Way.

We extend our thanks to all our stakeholders for their interaction with the JSE team, and look forward to continuing our collaboration in the year
ahead.

APPROVAL OF FINANCIAL STATEMENTS
The consolidated and separate audited annual financial statements of the JSE Limited, as identified in the first paragraph, were approved by the
Board of directors on 28 February 2019 and signed by:

N Nyembezi                                                                N Newton-King
Chairman                                                                  Chief Executive Officer

CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
For the year ended 31 December 2018

                                                                                                                                           Group
                                                                                                                       
                                                                                                                                      2018         2017*
                                                                                                                       Notes         R'000         R'000

Continuing operations
Revenue                                                                                                                    9     2 198 479     2 215 269   
Other income                                                                                                                        82 288        52 359   
Personnel expenses                                                                                                        10     (505 901)     (544 087)   
Other expenses                                                                                                            11     (842 496)     (814 598)   
Profit from operating activities                                                                                                   932 370       908 943   
Finance income                                                                                                                   2 824 795     3 245 626   
Finance costs                                                                                                                  (2 585 574)   (3 012 846)   
Net finance income                                                                                                                 239 221       232 780   
Share of profit from associate (net of income tax)                                                                                  55 910        34 644   
Profit before income tax                                                                                                         1 227 501     1 176 367   
Income tax expense                                                                                                        12     (323 219)     (316 370)   
Profit for the year from continuing operations                                                                                     904 282       859 997   
Discontinued operations                                                                                                                                    
Loss after tax for the year from discontinuing operations                                                                 13         (700)      (24 489)   
Profit for the year                                                                                                                903 582       835 508   
Other comprehensive income                                                                                                                                 
Items that are or may be reclassified to profit or loss                                                                                                    
Net change in financial instruments at fair value                                                                                        -        23 028   
Net change in  financial instruments at fair value recycled to profit or loss                                                            -      (12 249)   
Change in financial instruments at fair value through other comprehensive income that will not be
reclassified to profit and loss (net of tax)                                                                                      (11 280)             -   
Change in financial instruments at fair value through other comprehensive income that may be                                                               
reclassified to profit and loss in subsequent periods (net of tax)                                                                    (89)             -   
Other comprehensive income for the year, net of income tax                                                                        (11 369)        10 779   
Total comprehensive income for the year                                                                                            892 213       846 287   
Earnings per share for continuing operations                                                                                                               
Basic earnings per share (cents)                                                                                        14.1       1 056.5       1 006.0   
Diluted earnings per share (cents)                                                                                      14.2       1 048.1         999.1   
Other earnings for continuing operations                                                                                                                   
Headline earnings per share (cents)                                                                                     14.3       1 056.2         996.5   
Diluted headline earnings per share (cents)                                                                             14.4       1 048.0         989.6   


*Comparative figures have been restated due to the discontinued operations referenced in note 13.

CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
As at 31 December 2018

                                                                                                                                   Group
                                                                                                                
                                                                                                                              2018         2017
                                                                                                                Notes        R'000        R'000

Assets
Non-current assets                                                                                                       1 403 265    1 315 826   
Property and equipment                                                                                                     219 631      186 730   
Intangible assets                                                                                                  15      518 473      486 808   
Investment in associate                                                                                                    269 898      232 822   
Other investments                                                                                                          303 473      316 400   
Loan to the JSE Empowerment Fund Trust                                                                                      25 136       25 154   
Deferred taxation                                                                                                           66 654       67 912   
Current assets                                                                                                          40 521 485   37 372 143   
Trade and other receivables                                                                                                490 303      495 105   
Income tax receivable                                                                                                       29 997          622   
JSE Clear Derivatives Default Fund collateral deposits                                                                     500 000      500 000   
Margin deposits                                                                                                         36 766 624   33 933 761   
Collateral deposits                                                                                                        160 625       65 191   
Cash and cash equivalents                                                                                                2 573 936    2 377 464   
Total assets                                                                                                            41 924 750   38 687 969   
Equity and liabilities                                                                                                                            
Total equity                                                                                                             3 968 441    3 626 381   
Stated capital                                                                                                            (18 378)       11 614   
Reserves                                                                                                                   511 739      513 272   
Retained earnings                                                                                                        3 475 080    3 101 495   
Non-current liabilities                                                                                                    133 055      139 444   
Employee benefits                                                                                                            1 960        9 844   
Due to Safex members                                                                                                             -        1 347   
Deferred taxation                                                                                                           22 296       16 087   
Operating lease liability                                                                                                  106 840      104 084   
Deferred income                                                                                                              1 959        8 082   
Current liabilities                                                                                                     37 823 254   34 922 144   
Trade and other payables                                                                                                   375 430      395 514   
Income tax payable                                                                                                              25        9 294   
Employee benefits                                                                                                          120 550      118 384   
JSE Clear Derivatives Default Fund collateral contribution                                                                 400 000      400 000   
Margin deposits                                                                                                         36 766 624   33 933 761   
Collateral deposits                                                                                                        160 625       65 191   
Total equity and liabilities                                                                                            41 924 750   38 687 969   


CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
For the year ended 31 December 2018

                                                                                                       Share-based
                                                                                 Stated*                  payments      Total    Retained       Total
                                                                                 capital        NDR        reserve   reserves    earnings      equity
Group                                                                              R'000      R'000          R'000      R'000       R'000       R'000

Balance at 1 January 2017                                                         26 693    415 924         59 776    475 700   2 767 138   3 269 531   
Profit for the year from continuing operations                                         -          -              -          -     859 997     859 997   
Other comprehensive income                                                             -     10 779              -     10 779           -      10 779   
Total comprehensive income for the year                                                -     10 779              -     10 779     859 997     870 776   
Loss for the year from discontinued operations                                         -          -              -          -    (24 489)    (24 489)   
LTIS 2010 Allocation 4 - shares vested                                            15 565          -       (15 565)   (15 565)           -           -   
LTIS 2010 Allocation 5 - shares vested                                            20 065          -       (20 065)   (20 065)           -           -   
Distribution from the JSE Debt Guarantee                                                                                                                
Fund Trust1                                                                            -    (4 484)              -    (4 484)       4 484           -   
Dividends paid to owners                                                               -          -              -          -   (486 456)   (486 456)   
Equity-settled share-based payment                                                     -          -         47 728     47 728           -      47 728   
Transfer of profit to investor protection fund                                         -     19 179              -     19 179    (19 179)           -   
Treasury shares                                                                 (50 490)          -              -          -           -    (50 490)   
Treasury shares - share issue costs                                                (219)          -              -          -           -       (219)   
Total contributions by and distributions to owners
of the Company recognised directly in equity                                    (15 079)     14 695         12 098     26 793   (525 640)   (513 926)   
Balance at 31 December 2017                                                       11 614    441 398         71 874    513 272   3 101 495   3 626 381   
Profit for the year from continuing operations                                         -          -              -          -     904 282     904 282   
Other comprehensive income                                                             -   (11 369)              -   (11 369)           -    (11 369)   
Total comprehensive income for the year                                                -   (11 369)              -   (11 369)     904 282     892 913   
Loss for the year from discontinued operations                                         -          -              -          -       (700)       (700)   
LTIS 2010 Allocation 5 - shares vested                                            17 070          -       (17 070)   (17 070)           -           -   
LTIS 2010 Allocation 6 - shares vested                                             9 819          -        (9 819)    (9 819)           -           -   
Distribution from the JSE Debt Guarantee                                                                                                                
Fund Trust(1)                                                                          -    (4 427)              -    (4 427)       4 427           -   
Dividends paid to owners                                                               -          -              -          -   (524 999)   (524 999)   
Equity-settled share-based payment                                                     -          -         31 727     31 727           -      31 727   
Transfer of profit to investor protection fund                                         -      9 425              -      9 425     (9 425)           -   
Treasury shares                                                                 (56 494)          -              -          -           -    (56 494)   
Treasury shares - share issue costs                                                (387)          -              -          -           -       (387)   
Total contributions by and distributions to owners                                                                                                      
of the Company recognised directly in equity                                    (29 992)      4 998          4 838      9 836   (530 697)   (550 853)   
Balance at 31 December 2018                                                    (18 378)*    435 027         76 712    511 739   3 475 080   3 968 441   


(1)JSE Debt Guarantee Fund Trust Deed makes specific provision for the utilisation of excess funds for the purpose of reducing the risk of claims being made against the
   Trust. To this effect, R4.4m (December 2017: R4.5m) before intercompany adjustments was transferred to the JSE Limited to defray market regulatory expenditure.
*Debit balance due to own shares held as part of the Long-Term Incentive Schemes.

CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2018



                                                                                                                                                            Group

                                                                                                                                                      2018          2017
                                                                                                                                                     R'000         R'000

Cash flows from operating activities                                                                                                                                       
Cash generated by operations                                                                                                                     1 045 193       998 367   
Finance income                                                                                                                                   2 800 775     3 326 655   
Finance costs                                                                                                                                  (2 587 269)   (3 053 521)   
Dividends received                                                                                                                                   5 110         3 696   
Taxation paid                                                                                                                                    (350 597)     (298 673)   
Net cash generated by operating activities                                                                                                         913 212       976 524  
Cash flows from investing activities                                                                                                                                       
Proceeds on sale of other investments                                                                                                               24 522        30 296   
Acquisition of other investments                                                                                                                  (22 906)      (30 197)   
Dividends from associate                                                                                                                            18 834        24 972   
Proceeds from disposal of property and equipment                                                                                                       226           150   
Leasehold improvements                                                                                                                               (552)       (1 683)   
Acquisition of intangible assets                                                                                                                  (83 007)     (115 958)   
Acquisition of property and equipment                                                                                                             (90 647)      (64 259)   
Net cash used in investing activities                                                                                                            (153 530)     (156 679)   
Cash flows from financing activities                                                                                                                                       
Acquisition of treasury shares                                                                                                                    (56 881)      (50 709)   
Dividends paid                                                                                                                                   (524 999)     (486 456)   
Net cash used in financing activities                                                                                                            (581 880)     (537 165)   
Net increase in cash and cash equivalents                                                                                                          177 802       282 680   
Cash and cash equivalents at 1 January                                                                                                           2 377 464     2 094 784   
Effect of exchange rate fluctuations on cash held                                                                                                   18 670             -   
Cash and cash equivalents at 31 December 2018                                                                                                    2 573 936     2 377 464   


SELECTED NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 31 December 2018

1.   Reporting entity
     JSE Limited (the "JSE" or the "Company") is a company domiciled in South Africa. The registration number is 2005/022939/06. The JSE
     is licensed as an exchange in terms of the Financial Markets Act 2012 ("FMA"). The JSE has the following main lines of business: Capital
     Markets, Post-Trade Services and Information Services. The address of the Company's registered office is One Exchange Square, 2 Gwen
     Lane, Sandown. The consolidated financial statements of the Company as at and for the year ended 31 December 2018 comprise the
     Company and its subsidiaries and controlled structured entities (collectively referred to as the "Group" and individually as "Group entities")
     and reflect the Group's interest in associates.

     When reference is made to the "Group" in the accounting policies, it should be interpreted as referring to the Company, where the context
     requires, unless otherwise noted.

2.   Basis of preparation
     Statement of compliance

     The Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS),
     specifically referring to IAS 34, the SAICA financial reporting guides as issued by the Accounting Practice Committee, the Financial 
     Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements and the requirements of the 
     Companies Act 2008 ("Companies Act").

3.   Changes in accounting policies
     All accounting policies applied by the Group in these summarised consolidated financial statements are in terms of IFRS and are the same as
     those applied by the Group in the prior year and in its consolidated financial statements as at and for the year ended 31 December 2018.

4.   Comparative figures
     Unless otherwise indicated, comparative figures refer to the 12 months ended December 2017.

5.   Use of estimates and judgements
     The preparation of financial statements are in conformity with IFRS and requires management to make judgements, estimates
     and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
     The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable
     under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that
     are not readily apparent from other sources. Actual results may differ from these estimates.

     Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
     which the estimates are revised and in any future periods affected.

6.   Discontinued operations
     The Board has decided to discontinue the Nautilus business within the Group. The results of this business are classified as a
     discontinued operation.

     All income and expense items are excluded from the individual statement of the comprehensive income line items and a single amount
     representing the post-tax profit or loss of discontinued operations is disclosed. Prior year figures relating to income and expenses have
     been restated.

     Refer to note 13 for details regarding the discontinued operations.

7.   Financial risk management
     The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements
     as at and for the year ended 31 December 2018.

8.   Operating segment
     An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses,
     including revenues and expenses that relate to transactions with any of the Group's other components. Costs, assets and liabilities, in the
     JSE are managed holistically across the Exchange and variances against budget are closely monitored. Information technology and other
     corporate overheads are not generally allocated to a particular segment.

                                                                                                                    Group

                                                                                                              2018           2017
                                                                                                             R'000          R'000

9. Operating segments and revenue
   Revenue comprises:
   Capital markets
     Bond ETP (Electronic Trading Platform)                                                                  3 380              -
     Colocation fees                                                                                        16 016         20 068
     Commodity derivatives fees                                                                             78 420         68 365
     Company service fees*                                                                                  10 294              -
     Currency derivatives fees                                                                              47 931         47 943
     Equity derivatives fees                                                                               142 930        169 769
     Equity market fees                                                                                    498 616        506 692
     Interest rate market fees**                                                                            52 917         50 076
     Primary market fees                                                                                   154 522        181 005
   Post-trade services
     Clearing and settlement fees                                                                          403 564        383 794
     Back-office services (BDA)                                                                            303 012        292 911
     Funds under management***                                                                              79 365         81 960
   Information services
     Index fees                                                                                             33 288         50 021
     Market data fees                                                                                      233 811        221 702

   Total revenue excluding Strate ad valorem fees - cash equities and bonds                              2 058 065      2 074 306
   Strate ad valorem fees - cash equities                                                                  126 733        128 132
   Strate ad valorem fees - bonds**                                                                         13 681         12 831

                                                                                                         2 198 479      2 215 269
   *   Company Services is now a core business line. As such, it is reccorded in revenue. Prior year numbers are classified as other income.
   **  Disclosed separately due to new billing process. Comparative figures have been restated.
   *** Comparative figures have been restated due to the discontinued operations referenced in note 13.


10.Personnel expenses
   Remuneration paid                                                                                       474 386        498 830

   Gross amount paid                                                                                       485 784        516 384
   Less: Capitalised to intangible assets                                                                 (11 398)       (17 554)

   Long-term incentive schemes                                                                              31 515         45 257

                                                                                                           505 901        544 087


11.Other expenses
   Other expenses                                                                                          601 796        561 793
   Technology costs                                                                                        240 700        252 805

                                                                                                           842 496        814 598

12.Income tax expense
   The Group's consolidated effective tax rate for the year ended 31 December 2018 was 26% (2017: 27%).

13.Discontinued operations
   Following a review of their strategic fit to the Group, the Board decided to wind up Nautilus MAP RF (Pty) Limited and Nautilus MAP
   Operations (Pty) Limited. These subsidiaries have been classified as discontinued operations in terms of IFRS 5 Non-current Assets Held-
   For-Sale and Discontinued Operations.

                                                                                                                             2018       2017
                                                                                                                            R'000      R'000

Statement of comprehensive income                                                                                                              
Revenue                                                                                                                    21 745     13 777   
Investment income                                                                                                             404        171   
Total income                                                                                                               22 149     13 948   
Operating expenses                                                                                                       (22 849)   (38 411)   
Loss before taxation                                                                                                        (700)   (24 463)   
Taxation                                                                                                                        -       (26)   
Loss after taxation                                                                                                         (700)  (24 489)*   
Earnings per share for discontinued operations
Basic earnings per share (cents)                                                                                            (0.8)     (28.6)
Diluted earnings per share (cents)                                                                                          (0.8)     (28.4) 
Headline earnings per share for discontinued operations
Reconciliation of headline earnings:
Loss for the year                                                                                                           (700)   (24 489)
Adjustments for goodwill impairment                                                                                             -     24 564
Headline earnings                                                                                                           (700)         75
Headline earnings and diluted earnings per share (cents)                                                                    (0.8)       0.09
Statement of cash flows                                                                                                                        
Net cash flow from operating activities                                                                                    28 374     21 756   
Net cash flow from financing activities                                                                                  (21 146)   (18 705)   
Increase in cash and cash equivalent                                                                                        7 228      3 051   
Cash and cash equivalent at the beginning of the year                                                                       2 844          -   
Cash and cash equivalent at the end of the year                                                                            10 072      3 051   

*Total non-current assets (goodwill) relating to this business were impaired in the prior year.

                                                                                                                               Group

                                                                                                                       2018            2017*
                                                                                                                      R'000            R'000

14. Earnings and headline earnings per share
    14.1  Basic earnings per share for continuing operations
          Profit for the year attributable to ordinary shareholders                                                 904 282          859 997

          Weighted average number of ordinary shares:
          Issued ordinary shares at 1 January                                                                    86 877 600       86 877 600
          Effect of own shares held (JSE LTIS Schemes)                                                          (1 283 102)      (1 394 954)

          Weighted average number of ordinary shares at 31 December                                              85 594 498       85 482 646

          Basic earnings per share (cents)                                                                          1 056.5          1 006.0

    14.2  Diluted earnings per share for continuing operations
          Profit for the year attributable to ordinary shareholders                                                 904 282          859 997

          Weighted average number of ordinary shares (diluted):
          Weighted average number of ordinary shares at 31 December (basic)                                      85 594 498       85 482 646
          Effect of LTIS Share Scheme                                                                               681 891          598 795

          Weighted average number of ordinary shares (diluted)                                                   86 276 389       86 081 441

          Diluted earnings per share (cents)                                                                        1 048.1            999.1

          The average market value of the Company's shares for the purposes of calculating the dilutive effect
          of share options was based on quoted market prices for the year.

    14.3  Headline earnings per share
          Reconciliation of headline earnings:
          Profit for the year attributable to ordinary shareholders                                                 904 282          859 997
          Adjustments are made to the following:
          - Gross amount                                                                                              (114)            4 140

          Profit or loss on disposal of property and equipment                                                        (158)            (105)
          Share of investment in associate - system impairment                                                            -            4 216
          - Taxation effect on profit or loss on disposal of property and equipment                                      44               29

          Net realised gain on disposal of financial instruments (no taxation effect)                                     -         (12 249)
         
          Headline earnings                                                                                         904 168          851 888
          Headline earnings per share (cents)                                                                       1 056.2            996.5
          Headline earnings per share for discontinued operations                                                     (0.8)             0.09
          
          Total headline earnings per share (cents)                                                                 1 055.4           996.59

    14.4  Diluted headline earnings per share
          Diluted headline earnings per share (cents)                                                               1 048.0            989.6
          Diluted headline earnings per share for discontinued operations                                             (0.8)             0.09

          Total diluted headline earnings per share (cents)                                                         1 047.2           989.69


*Comparative figures have been restated due to the discontinued operations referenced in note 13.
                   
15. Intangible assets
    Included in the intangible assets of R518m (2017: R487m), is software under development of R319m (2017: R283m), mainly in respect of the
    Integrated Trading and Clearing System.

16. Share-based payments
   (i)   Vesting of Allocation 5 Tranche 2 shares during the period under review
           The fifth award ("Allocation 5") under LTIS 2010 was granted in May 2014 with the following vesting profile:

           Tranche 2: 50% of the total award, vested on 1 June 2018 (Exercise date on 6 August due to vesting date falling within closed period).

           In respect of Tranche 2, the Board assessed performance over the four-year vesting term against pre-set financial and strategic
           targets and determined that 95% of these Tranche 2 shares should vest for those participants still in the employ of the JSE on
           1 June 2018. The remainder of the Tranche 2 (being 8 785 shares) were forfeited by participants. Details relating to the vesting is
           included in the Remuneration report.

           As at 31 December 2018, details of Tranche 2 were as follows:

           Tranche 2 - fully vested

           Original number of Tranche 2 shares awarded in May 2014                                                                        211 435
           Forfeited by leavers to date                                                                                                  (35 735)
           Tranche 2 shares forfeited for missing performance targets                                                                     (8 785)
           Accelerated for good leavers to date                                                                                          (55 100)
           Tranche 2 shares vested on 1 June 2018                                                                                       (111 815)

           Tranche 2 shares outstanding                                                                                                         -

   (ii)   Vesting of Allocation 6 Tranche 1 shares during the period under review
           The sixth award ("Allocation 6") under LTIS 2010 was granted in June 2015 with the following vesting profile:

           Tranche 1: 50% of the total award, vested on 31 May 2018 (Exercise date on 6 August due to vesting date falling within closed period).

           Tranche 2: 50% of the total award, vesting on 30 April 2019.

           In respect of Tranche 1, the Board assessed performance over the four-year vesting term against the pre-set financial and strategic
           targets and determined that 59.36% of these Tranche 1 shares vested for those participants still in the employ of the JSE on 31 May
           2018.

           As at 31 December 2018, details of Tranche 1 were as follows:

           Tranche 1 - fully vested

           Original number of Tranche 1 shares awarded in June 2015                                                                       151 170
           Forfeited by leavers to date                                                                                                  (19 560)
           Tranche 1 shares forfeited for missing performance targets                                                                    (53 486)
           Accelerated for good leavers to date                                                                                          (30 565)
           Tranche 1 shares vested on 31 May 2018                                                                                        (47 559)

           Tranche 1 shares outstanding                                                                                                         -

           The profit or loss charge for the period, calculated using the Black-Scholes valuation methodology, in respect of allocations granted
           under LTIS 2010 is as follows:

                                                                                                                      2018                 2017

           Allocation 4 (granted in May 2013)                                                                            -                R2.6m
           Allocation 5 (granted in May 2014)                                                                        R6.3m                R9.9m
           Allocation 6 (granted in June 2015)                                                                       R2.2m                R5.5m
           Allocation 7 (granted in October 2016)                                                                    R9.5m               R13.4m
           Allocation 8 (granted in March 2017)                                                                      R6.1m                R7.6m

                                                                                                                     R24.1m              R39.0m

       Allocation 1 under LTIS 2018
       The first award ("Allocation 1") under LTIS 2018 was granted in September 2018 with the following vesting profile:

       Senior members

       Share price at grant date (rands per share)                                                                                      156.37
       Total number of shares granted                                                                                                  203 650
       Dividend yield (%)                                                                                                                    3
       Grant date                                                                                                            18 September 2018

       Vesting profile:

       50% of the shares awarded vest on 31 August 2021 (Tranche 1)                                                                    101 825
       50% of the shares awarded vest on 31 August 2022 (Tranche 2)                                                                    101 825

       Executive Committee
       Share price at grant date (rands per share)                                                                                      153.75
       Total number of shares granted                                                                                                  175 820
       Dividend yield (%)                                                                                                                    3
       Grant date                                                                                                            18 September 2018

       Vesting profile:

       50% of the shares awarded vest on 31 August 2021 (Tranche 1)                                                                     87 910
       50% of the shares awarded vest on 31 August 2022 (Tranche 2)                                                                     87 910


       The profit or loss charge for the period, calculated using the Black-Scholes valuation methodology, in respect of allocations granted
       under LTIS 2018 is as follows:

                                                                                                                      2018               2017

       Allocation 1 (granted in September 2018)                                                                      R4.6m                  -

                                                                                                                     R4.6m                  -

17. Contingent liabilities and commitments
    17.1 Commitments
                                                                                                                                Group

                                                                                                                        2018              2017
                                                                                                                       R'000             R'000

     17.1.1 These payments relate to operating lease agreements in respect of buildings
            from which the JSE conducts its business.
            Total future minimum lease payments under a non-cancellable operating lease:
            Not later than one year                                                                                   56 991            52 651
            Between one and five years                                                                               356 955           331 168
            Later than five years                                                                                     58 140           140 918

                                                                                                                     472 086           524 737

Note: The disclosure on the face of the statement of financial position represents the accrual from
      the straight-lining of the rental income.
     17.1.2 The JSE sub-leases areas of the building in which it operates.
            Total future minimum lease receipts
            Not later than one year                                                                                      252               589
            Between one and five years                                                                                    81               333

                                                                                                                         333               922

18. Fair value estimation
    Financial instruments measured in the statement of financial position at fair value require disclosure. The following is the fair value
    measurement hierarchy:
    - Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
    - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (that is, as prices) or
      indirectly (that is, derived from prices) (level 2).
    - Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

    The following table presents the Group's assets and liabilities that are measured at fair value.

                                                                                       Level 1           Level 2            Level 3     Total balance
                                                                                         R'000             R'000              R'000             R'000

    2018
    Assets
    Other investments
    - Equity securities                                                                124 418           161 051                  -          285 469
    - Debt investments                                                                       -            18 003                  -           18 003

    Total assets                                                                       124 418           179 054                  -          303 472

    2017
    Assets
    Other investments
    - Equity securities                                                                146 294           154 450                  -          300 744
    - Debt investments                                                                       -            15 655                  -           15 655

    Total assets                                                                       146 294           170 105                  -          316 399

    The fair value of financial instruments traded in active markets is based on quoted market prices, which represent actual and regularly
    occurring market transactions between market participants at the reporting date. A market is regarded as active if quoted prices
    are readily and regularly available from an exchange, dealer, broker or industry group pricing market transactions on an arm's length
    basis and transactions occur regularly. The quoted market price used for financial assets held by the Group is the current bid price.
    These instruments are included in level 1. Instruments included in level 1 comprise primarily FTSE 100 equity investments classified as
    fair value through OCI.

    The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined
    by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as
    little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
    included in level 2. The investment in debt instruments is classified as level 2.
    If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
    For all other financial assets and liabilities, the carrying value approximates the fair value.

19. Events after reporting date
    There have been no changes to the directors' interests in the ordinary share capital of the Group and no material events that would
    require adjustment or disclosure in the annual financial statements have occurred between 31 December 2018 and the date of this report.

20. Audit opinion
    Ernst & Young Inc, the Group's independent auditor, has audited the consolidated annual financial statements of the JSE Limited from
    which the summarised consolidated results contained in this report have been derived, and has expressed an unmodified audit opinion on
    the consolidated annual financial statements. The summarised consolidated financial results comprise the statements of financial position
    at 31 December 2018 and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and
    selected explanatory notes. A copy of the auditor's report is available for inspection at the JSE's registered office.
    
    The auditor's report does not necessarily report on all of the information contained in the summarised consolidated annual results and
    ordinary and special cash dividend declaration. Shareholders are therefore advised to obtain a copy of the auditor's report together 
    with the accompanying financial information from the JSE's registered office.
    
    JSE Limited: One Exchange Square, 2 Gwen Lane, Sandown, South Africa
    (Private Bag X991174, Sandton, 2146, South Africa)
    Tel: +27 11 520 7000
    Fax +27 11 520 8584

    The Meeting Specialist Proprietary Limited: One Exchange Square, 2 Gwen Lane, Sandown, Johannesburg, 2196 
    PO Box 62043, Marshalltown, 2107 or proxy forms can be sent to: proxy@tmsmeetings.co.za

    Sponsor: 
    RAND MERCHANT BANK (A division of FirstRand Bank Limited)
    
    28 February 2019

Date: 28/02/2019 03:03:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
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