ASX shares tumble on higher cost guidance
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The news: Shares in ASX slumped in early trading after the bourse operator flagged an increase in technology spend and capital expenditure.
The numbers: ASX said its expenses would grow by 15% in the current financial year — the top end of the 12% to 15% guidance range provided in February. Costs were expected to increase a further 6% to 9% in fiscal 2025.
Meanwhile, capital expenditure for the current fiscal is likely to be about $135 million, near the upper end of its guidance range. Capex will push higher in FY25 to be between $160 million and $180 million, and will remain elevated until FY27, it said.
ASX shares were down more than 9% to $57.34 in early trading on the news.
The context: Chief executive Helen Lofthouse said the rising costs are primarily driven by ongoing technology-related investment spend, including software licensing, equipment costs and depreciation and amortisation.
The bourse operator said in February its first half expenses included certain regulatory and compliance costs that were one-off in nature and also reflected the recent ramp up in investment for technology modernisation projects.
On Thursday, the company said it planned to keep its dividend payout ratio between 80% to 90% of underlying net profit after tax for the medium term.
The source: ASX announcement
