ASX -13.23%: was smashed after outlining a materially higher cost and investment profile into FY27, with the market reacting negatively to rising compliance, technology and remediation spending following the ASIC inquiry.
- FY26 revenue to April: $1.03bn, +12.5% y/y
- FY27 capex guidance: $180–200m (prev. $160–180m)
- FY28 capex guidance: $170–190m
Management said expense growth will be driven by technology modernisation, the expanded Accelerate Program and investments tied to ASIC-related remediation and customer growth initiatives – these are all known costs to the market but were baked in lower. The company also lowered the bottom end of its medium-term ROE target range to 12–14%, while flagging dividends will likely sit at the bottom end of the payout range over at least the next two distributions.
The update reinforces the growing cost burden facing ASX as it attempts to modernise legacy systems while responding to heightened regulatory scrutiny. The market had given the ASX the benefit of the doubt as a defensive compounder, however today’s move shows the market is becoming less willing to pay a premium while costs continue to rise at a rapid rate.
MM is neutral toward ASX
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