JSE reports 10.4% profit growth as diversification strategy pays off

The JSE reported a 10.4% increase in net profit after tax to R918 million for its 2024 financial year, buoyed by a diversification strategy that offset muted equity trading amid geopolitical strains and sluggish economic growth in the first half.

JSE Group CEO Leila Fourie said, “We recorded revenue growth across most of our asset classes off the back of sustained positive market sentiment following the formation of the Government of National Unity (GNU). Our strategy to build a diversified and resilient exchange group resulted in non-trading income increasing to R1.17 billion and it now contributes 37.8% of operating income (2023: 36.8%)."

She added, “I am particularly pleased with the structural reductions in our cost base, which helped restrain total expenditure growth to 6.2%. This performance was underpinned by robust and resilient systems and operational processes and uptime of 99.97% across all our systems – above our long-term average.”

The bourse’s total income climbed 6.5% to R3.2bn, driven by gains across most asset classes following improved market sentiment tied to GNU.

The JSE declared an ordinary dividend of 828 cents per share, up from 784c in 2023, after generating R1.09bn in net cash from operations, slightly below the prior year’s R1.11bn.

Phuthuma Nhleko, the chairman of the JSE, said, "South Africa has entered a phase of cautious optimism, supported by increased consumer and business confidence, a more favourable growth outlook, and a stronger appetite for risk among international investors. This momentum presents an opportunity for us to showcase South Africa as a premier destination for capital markets activity."

Its cash pile stood at R2.8bn, including bond investments, by December 2024. Return on equity rose to 20.2% from 19.4%, while the JSE’s share price surged 30% year-on-year, outpacing headline indices and delivering a 40% total shareholder return.

Non-trading revenue, a key pillar of the exchange’s diversification push, grew to R1.17bn, making up 37.8% of operating income, up from 36.8% in 2023.

JSE Investor Services led segment growth with a 20.2% jump to R229m, followed by Primary Markets at 15.6% to R187m and Commodity Derivatives Trading at 11.6% to R89m Equity Trading revenue edged up 0.2% to R444m, while Equity Derivatives Trading slipped 1.9% to R115m. Information Services revenue rose 1.1% to R454m.

The JSE said operational uptime hit 99.97%, a record high from 2023’s 99.89%, supporting technology upgrades like the BDA system overhaul and the Colo 2.0 launch. The JSE said it was also working on a central clearing solution for its bond electronic trading platform. Costs grew 6.2%, tempered by structural reductions, the company said.

The exchange’s bond and financial derivatives revenue rose 6.6% to R139m, while clearing and settlement dipped 0.5% to R409m. Back-office services revenue increased 12.7% to R415m, though funds under management fell 8.2% to R95m. JSE Clear revenue gained 5.5% to R118m.

Looking ahead, Fourie said, “Our future prospects and long-term strategic objectives are underpinned by operational resilience, diversified revenue streams and innovative technology advances. Building a future-fit and diversified financial market infrastructure backed by innovation and modern infrastructure is the Group’s apex focal point."

The shares rose 1.45% at 2.20pm on the JSE to R25.27.

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