ETrade Australia Ltd. announced its unaudited financial results for the second half of 2000 on Friday, and said its gross brokerage revenue dropped a huge 43 percent from the previous half. This was primarily due to a combination of a 21 percent decrease in trading volumes on the Australian Stock Exchange and a 25 percent drop in brokerage fees.
Although overall sales grew 8.4 percent to A$7.99 million (US$4.22 million), it wasn't enough to stop the company falling short of a profit, instead making a pre-abnormal loss of A$7.93 million.
ETrade also recorded an abnormal "non-cash marketing" expense of A$18.14 million, which represents the value of shares issued to ANZ as part of a three-year alliance between the companies. As part of the deal, ANZ has the opportunity to attain up to 40 percent equity in ETrade while in return ETrade is able to access ANZ's four-million-strong customer base in Australia and New Zealand. Since October, the alliance has accounted for 23 percent of all trades, and should the trend continue through to the end of March, ANZ will be issued with further shares.
Although ETrade introduced "Visitor Trade" during the period, it also managed to increase the number of customer accounts by 33 percent, giving the company an account base of 73,000.
Michael Deleray, group chief executive officer of ETrade Australia, was happy with the results. "We are extremely pleased with our customer growth and the diversification and expansion of our revenue streams and product offerings. These will start to generate additional revenues during the current quarter, despite the fact that retail trading volumes are below expectations," he said. "This expansion of the business, coupled with our outstanding alliance with ANZ Bank, positions the company well for future growth."
ETrade's cash position at the end of the December half was A$16.2 million, Deleray said.
Story courtesy The Industry Standard Australia: http://www.thestandard.com.au