JSE : Summarised consolidated annual results, ordinary and special dividend declarations for year ended 31 December 2019

JSE Limited

(Incorporated in the Republic of South Africa) Registration number 2005/022939/06 Sharecode: JSE

ISIN : ZAE000079711

LEI: 213800MZ1VUQEBWRFO39 ("JSE" or "the Group")

SUMMARISED CONSOLIDATED ANNUAL FINANCIAL RESULTS

AND ORDINARY AND SPECIAL CASH DIVIDEND DECLARATIONS

FOR THE YEAR ENDED 31 DECEMBER 2019

	Group		Group	%
Revenue (R billion)	2019		2018	change
R2.19		R2.20	-1%
Expenses (R billion)	R1.54		R1.35	14%
Earnings before interest and tax (R million)	R687		R932	-26%
Net profit after tax (R million)	R695		R904	-23%
Net cash flow from operations	R880	1	R913	-4%
Earnings per share (cents) for continuing operations	820.5	056.5	-22%
Total earnings per share (cents)	814.8	1	055.7	-23%
Total headline earnings per share (cents)	814.6	1	055.4	-23%
Ordinary dividend per share (cents) - declared	690		655	5%
Special dividend per share (cents) - declared	150		185	-19%

FINANCIAL PERFORMANCE

The JSE, along with other global markets, has experienced a difficult operating environment, which has impacted performance. Despite this constrained operating environment in 2019:

• The Group continues to be strongly cash generative, with net cash from operations of R880 million (2018: R913 million). Cash generated decreased by 4% compared to the decline in earnings of 23%.
  The decline in earnings is largely attributable to a planned increase in staff costs off an abnormally low base, costs associated with the implementation of the new Integrated Trading and Clearing
  (ITaC) system, and once-off costs
• The strong cash balance as well as the cash generated from operations has enabled the JSE to progressively grow the ordinary dividend. Accordingly, the Board has declared an ordinary dividend of 690 cents per share, an increase
  of 5% over the 2018 ordinary dividend of 655 cents per share. The Board has also declared a special cash dividend of 150 cents per share (2018: 185 cents per share), thereby maintaining the total dividend pay-out at R730 million (2018: 730 million)
• The diversification of the JSE's revenue streams ensured that the decline in revenue was limited to 1%, at R2.19 billion (2018: R2.20 billion) owing to a mixed performance across asset classes
• The JSE provided its trading members with an aggregate discount of 12% in Equity Market trading fees in 2019, following the introduction of the tiered billing model in August 2018. The change in billing model has lowered the cost to clients by R31 million on a pro-rata basis, and has enabled the exchange to remain competitive
• Together, the deep liquidity pools at the JSE, competitive and responsive relative pricing, robust technology, and globally connected trading and post-trade services, have ensured that the Group retained a 99.32% share of the Equity Market by value traded
• The JSE achieved the multi-year R170 million in cost savings (base year 2016) to which management committed in 2017
• Operating expenses increased off a low base, by 14% to R1.54 billion (2018: R1.35 billion), largely in four areas:
• • technology costs and related depreciation increased following the implementation of the ITaC system in April 2019;
  • the JSE recruited additional personnel to reach planned headcount levels (compared with the low base headcount throughout 2018) to ensure the JSE is appropriately resourced to deliver on its key business initiatives;
  • the cost base includes once-off expenditures of R37 million relating to the JSE's executive leadership transition; and
  • expenses of R6 million relating to the proposed acquisition of Link Market Services South Africa Proprietary Limited (Link SA)
• As a result of the relative increase in operating costs, Group earnings before interest and tax (EBIT) decreased by 26% to R687 million (2018: R932 million) and net profit after tax (NPAT) declined by 23% to

R695 million (2018: R904 million)

• Similarly, basic earnings per share (earnings per share (EPS) for continuing operations) decreased by 22%, to 820.5 cents (2018: 1 056.5 cents) and headline earnings per share (HEPS) decreased by 23% to 814.6 cents (2018: 1 055.4) respectively
• The JSE remains in a healthy position with regard to cash and capital

DECLARATION OF ORDINARY AND SPECIAL DIVIDEND		December 2019,
The Board has declared an ordinary and a special cash dividend for the year ended 31
as follows:
Dividend	Annual gross amount	Withholding tax %	Net amount
Ordinary	690	cents	20%	552	cents
Special	150	cents	20%	120	cents

The JSE's practice has been to return distributable cash to shareholders after ring-fencing cash

for regulatory capital requirements and investment (capital expenditure and inorganic opportunities). During 2019, the JSE concluded an exercise to determine the optimal regulatory capital and has been reporting to the Prudential Authority as per the FMA since April 2019.

The ordinary dividend of 690 cents per share for 2019 represents a progressive 5% in nominal terms although this translates into a pay-out ratio of 87%. The Board notes this exception to the current dividend policy pay-out range and will determine in the year ahead whether a formal change to the dividend policy is required.

The dividends have been declared from retained earnings, and the Group remains sufficiently capitalised. A dividend withholding tax of 20% will be applicable to all shareholders who are not exempt. The dividends are payable to shareholders recorded in the register of members of the JSE at the close of business on Friday, 27 March 2020.

In compliance with the Companies Act, the directors confirm that the JSE will satisfy the solvency and liquidity test immediately after completion of the dividend distribution. In compliance with the requirements of Strate, the following salient dates for the payment of the ordinary and special dividend are applicable:

Dividend paid in year in respect of financial year ended			31 December		31 December
				2019		2018
Ordinary dividend per share			690	cents		655 cents
Special dividend per share			150	cents		185 cents
Total rand value		R730 million	R730 million
Declaration date	Monday, 24	February	2020	Thursday, 28 February 2019
Last date to trade JSE shares cum dividend	Tuesday,	24	March	2020	Monday, 18 March 2019
JSE shares commence trading ex-dividend	Wednesday,	25	March	2020	Tuesday, 19	March 2019
Record date for purposes of determining the registered holders of	Friday,	27	March	2020	Friday, 22	March 2019
JSE shares to participate in the dividend at close of business on:
Date of payment of dividend	Monday,	30	March	2020	Monday, 25	March 2019
Share certificates may not be dematerialised or rematerialised from Wednesday, 25 March	2020	to Friday, 27 March 2020, both days
inclusive. On Monday, 30 March 2020, the dividend will be electronically transferred	to	the bank accounts of certificated
shareholders who use this facility. In respect of those who do not use this facility, cheques	dated on or about

Monday, 30 March 2020 will be posted on or about that date. The accounts of those shareholders who have dematerialised their shares (which are held at their central securities depository participant or broker) will be credited on or about 30 March 2020. The issued share capital of the JSE as at the declaration date was 86 877 600 ordinary shares. The tax number of the JSE

is 9313008840. South African Reserve Bank approval applies for the declaration of the special dividend and the finalisation date

is Tuesday, 17 March 2020.

For further information

This short-form announcement is the responsibility of the directors. It is only a summary of the information in the full announcement and does not contain full details. Any investment decision should be based on the full announcement, published and available at: https://senspdf.jse.co.za/documents/2020/JSE/ISSE/JSE/24022020.pdf and on the JSE website at: www.jse.co.za.

Ernst and Young Inc, the Group's independent auditor, has audited the consolidated annual financial statements of the JSE Limited from which this announcement has been derived, and has expressed an unmodified audit opinion on the consolidated annual financial statements.

The auditor's report (with Key Audit Matters) issued on the Consolidated Annual Financial Statements ("AFS") and the actual Consolidated Annual Financial Statements can be accessed at http://ir.jse.co.za/results2019

This announcement itself is not audited and therefore the audit report does not cover this announcement.

The full announcement is also available at our registered offices and the offices of the sponsor for inspection at no charge during office hours. Copies of the full announcement may be requested by emailing: [e-mail]

Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)

24 February 2020