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Summarised consolidated annual results, ordinary and special dividend declarations for year ended 31 December 2019
JSE Limited
(Incorporated in the Republic of South Africa)
Registration number 2005/022939/06
Sharecode: JSE
ISIN : ZAE000079711
LEI: 213800MZ1VUQEBWRFO39
("JSE" or "the Group")
SUMMARISED CONSOLIDATED ANNUAL FINANCIAL RESULTS
AND ORDINARY AND SPECIAL CASH DIVIDEND DECLARATIONS
FOR THE YEAR ENDED 31 DECEMBER 2019
Group Group %
2019 2018 change
Revenue (R billion) R2.19 R2.20 -1%
Expenses (R billion) R1.54 R1.35 14%
Earnings before interest and tax (R million) R687 R932 -26%
Net profit after tax (R million) R695 R904 -23%
Net cash flow from operations R880 R913 -4%
Earnings per share (cents) for continuing operations 820.5 1 056.5 -22%
Total earnings per share (cents) 814.8 1 055.7 -23%
Total headline earnings per share (cents) 814.6 1 055.4 -23%
Ordinary dividend per share (cents) - declared 690 655 5%
Special dividend per share (cents) - declared 150 185 -19%
FINANCIAL PERFORMANCE
The JSE, along with other global markets, has experienced a difficult operating environment, which has impacted
performance. Despite this constrained operating environment in 2019:
- The Group continues to be strongly cash generative, with net cash from operations of R880 million
(2018: R913 million). Cash generated decreased by 4% compared to the decline in earnings of 23%.
The decline in earnings is largely attributable to a planned increase in staff costs off an abnormally
low base, costs associated with the implementation of the new Integrated Trading and Clearing
(ITaC) system, and once-off costs
- The strong cash balance as well as the cash generated from operations has enabled the JSE to progressively grow the
ordinary dividend. Accordingly, the Board has declared an ordinary dividend of 690 cents per share, an increase
of 5% over the 2018 ordinary dividend of 655 cents per share. The Board has also declared a special cash
dividend of 150 cents per share (2018: 185 cents per share), thereby maintaining the total dividend pay-out
at R730 million (2018: 730 million)
- The diversification of the JSE's revenue streams ensured that the decline in revenue was limited to 1%, at
R2.19 billion (2018: R2.20 billion) owing to a mixed performance across asset classes
- The JSE provided its trading members with an aggregate discount of 12% in Equity Market trading fees in 2019,
following the introduction of the tiered billing model in August 2018. The change in billing model has lowered the
cost to clients by R31 million on a pro-rata basis, and has enabled the exchange to remain competitive
- Together, the deep liquidity pools at the JSE, competitive and responsive relative pricing, robust technology,
and globally connected trading and post-trade services, have ensured that the Group retained a 99.32% share of
the Equity Market by value traded
- The JSE achieved the multi-year R170 million in cost savings (base year 2016) to which management committed in 2017
- Operating expenses increased off a low base, by 14% to R1.54 billion (2018: R1.35 billion), largely in four areas:
- technology costs and related depreciation increased following the implementation of the ITaC system in April 2019;
- the JSE recruited additional personnel to reach planned headcount levels (compared with the low base headcount
throughout 2018) to ensure the JSE is appropriately resourced to deliver on its key business initiatives;
- the cost base includes once-off expenditures of R37 million relating to the JSE's executive leadership transition; and
- expenses of R6 million relating to the proposed acquisition of Link Market Services South Africa Proprietary Limited (Link SA)
- As a result of the relative increase in operating costs, Group earnings before interest and tax (EBIT)
decreased by 26% to R687 million (2018: R932 million) and net profit after tax (NPAT) declined by 23% to
R695 million (2018: R904 million)
- Similarly, basic earnings per share (earnings per share (EPS) for continuing operations) decreased by 22%, to 820.5 cents
(2018: 1 056.5 cents) and headline earnings per share (HEPS) decreased by 23% to 814.6 cents (2018: 1 055.4) respectively
- The JSE remains in a healthy position with regard to cash and capital
DECLARATION OF ORDINARY AND SPECIAL DIVIDEND
The Board has declared an ordinary and a special cash dividend for the year ended 31 December 2019,
as follows:
Dividend Annual gross amount Withholding tax % Net amount
Ordinary 690 cents 20% 552 cents
Special 150 cents 20% 120 cents
The JSE's practice has been to return distributable cash to shareholders after ring-fencing cash
for regulatory capital requirements and investment (capital expenditure and inorganic opportunities). During 2019, the JSE
concluded an exercise to determine the optimal regulatory capital and has been reporting to the Prudential Authority as per the
FMA since April 2019.
The ordinary dividend of 690 cents per share for 2019 represents a progressive 5% in nominal terms although this translates into a
pay-out ratio of 87%. The Board notes this exception to the current dividend policy pay-out range and will determine in the year
ahead whether a formal change to the dividend policy is required.
The dividends have been declared from retained earnings, and the Group remains sufficiently capitalised. 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, 27 March 2020.
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:
31 December 31 December
Dividend paid in year in respect of financial year ended 2019 2018
Ordinary dividend per share 690 cents 655 cents
Special dividend per share 150 cents 185 cents
Total rand value R730 million R730 million
Declaration date Monday, 24 February 2020 Thursday, 28 February 2019
Last date to trade JSE shares cum dividend Tuesday, 24 March 2020 Monday, 18 March 2019
JSE shares commence trading ex-dividend Wednesday, 25 March 2020 Tuesday, 19 March 2019
Record date for purposes of determining the registered holders of
JSE shares to participate in the dividend at close of business on: Friday, 27 March 2020 Friday, 22 March 2019
Date of payment of dividend Monday, 30 March 2020 Monday, 25 March 2019
Share certificates may not be dematerialised or rematerialised from Wednesday, 25 March 2020 to Friday, 27 March 2020, both days
inclusive. On Monday, 30 March 2020, 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 on or about
Monday, 30 March 2020 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 or about 30 March 2020.
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 applies for the declaration of the special dividend and the finalisation date
is Tuesday, 17 March 2020.
For further information
This short-form announcement is the responsibility of the directors. It is only a summary of the information in
the full announcement and does not contain full details. Any investment decision should be based on the full
announcement, published and available at: https://senspdf.jse.co.za/documents/2020/JSE/ISSE/JSE/24022020.pdf
and on the JSE website at: www.jse.co.za.
Ernst and Young Inc, the Group's independent auditor, has audited the consolidated annual financial statements
of the JSE Limited from which this announcement has been derived, and has expressed an unmodified audit opinion
on the consolidated annual financial statements.
The auditor's report (with Key Audit Matters) issued on the Consolidated Annual Financial Statements ("AFS") and the actual
Consolidated Annual Financial Statements can be accessed at http://ir.jse.co.za/results2019
This announcement itself is not audited and therefore the audit report does not cover this announcement.
The full announcement is also available at our registered offices and the offices of the sponsor for inspection
at no charge during office hours. Copies of the full announcement may be requested by emailing: ir@jse.co.za
Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)
24 February 2020
Date: 24-02-2020 04:45:00
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