A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014.MARK BLINCH/Reuters
Canada's largest market operator saw its net income grow during the first quarter, even as volatility in oil prices kept investors on edge.
TMX Group Ltd. posted an increase in profit to $46.3-million for the three months ending March 31 from $42.6-million in the same period last year.
Earnings of 85 cents per share grew 9 per cent, beating analysts' average estimates of 75 cents.
With resource markets in the tank and a new rival in Nasdaq Inc., TMX Group has been looking for ways to energize the country's otherwise sleepy, resource-reliant capital markets.
Executives have been stressing the importance of fostering a vibrant tech sector in Canada that turns to the public markets for funding and lists on the TSX Venture Exchange, creating a pipeline of issuers to graduate to the senior exchange.
There are competitors circling TMX Group's listings, trading and market data segments. But it once again reiterated that it's ready to face these threats head on.
"We are not scrambling to defend any one business area from any one competitor," Lou Eccleston, the CEO at TMX Group, said Tuesday during a conference call with analysts."This is an evolving organization. We're pushing out not only at the edges but from the core," Lou Eccleston, the CEO at TMX Group, said Tuesday during a conference call with analysts.
So far this year, its stock has gained more than 40 per cent to $51.89, reversing the sharp sell-off it incurred at the end of 2015.
The company is improving its current suite of products and finding new ways to cut costs. Reducing its head count to 1,183, from the 1,297 it had as of last March, is one way it has achieved this. But more streamlining is coming, as TMX Group tries to be more efficient by shedding expenses.
That's because revenue growth has stalled. During the first quarter, total sales declined.
It generated $177.7-million in revenues, down from $185.3-million in the same period last year. TMX Group garnered 11-per-cent less in listing fees, with the value of financings on the Toronto Stock Exchange falling 25 per cent. But it recorded a 17-per-cent jump in sales from derivatives trading and clearing, as volumes on the Montreal Exchange rose by 27 per cent to 24.2 million contracts traded in the period.
TMX Group is in the process of launching a host of new offerings, focusing on innovation. Last June, it introduced AgriClear, an online platform for cattle buyers and sellers in Canada and the U.S. Last month, it launched a new analytics offering that it plans to add to in the coming months. And near the end of the second quarter, it plans to turn on a platform it's calling NAVex, which will enable bulk trading and automated allocation of mutual funds.