Good morning, and welcome to ASX's Financial Results Briefing for the 12 month period ending 30 June 2021. Thank you for taking part in this virtual presentation. I hope you're safe and well from wherever you're joining us. My name is Dominic Stephens, Managing Director and CEO of ASX. Presenting with me is ASX's CFO, Jillian Larkins.
To begin, I'd like to acknowledge that I'm speaking on the land of the Gadigal and Birrabiracle and I pay my respects to elders past, present and emerging. Given the COVID restrictions, Jillian and I are working from our homes as are all members of our supporting ASX team. This morning, I'll begin with an overview of the results and an update on our strategic progress. Jillian will then take you through the financial detail. I'll then return with some comments around outlook, provide a brief summary and take questions.
So let's begin. As we all know, FY 'twenty one has been eventful and unusual. The trends we saw at the half year, namely a swift recovery post the initial impact of COVID-nineteen on our economy, Interest rates stabilizing at close to 0, equity market volatility and the increase in retail investors all continued in the second half. FY 'twenty one was a solid year for most of the businesses within ASX's diversified portfolio. However, as expected, We experienced the effects of the Reserve Bank's unprecedented policy settings, put in place to deal with the pandemic.
We see the current policy settings as temporary rather than permanent and look forward to these and other pandemic related changes to our lives returning to normal once vaccination levels reach targets. ASX believes in the importance of sustainable foundations. We've completed a number of programs in recent years to drive operational excellence in all that we do. This work gives us confidence about our resilience and risk management. It also creates opportunities to build new products and services on our contemporary platform.
ASX is transforming its technology with a particular focus on our equity technology stack. With the rollout of CHESS in early 2023, We will have fundamentally changed the whole platform that underpins Australia's equity market. The average age of our technology stack will be at levels last seen with the electronification of these processes back in the 1990s. The continued digitization of processes And the use of new and important technologies such as DLT will enable new efficiencies and opportunities for ASX and the market. What's exciting for ASX about having sustainable foundations and new technology is the opportunity created to make business easier for our customers.
Feedback so far is encouraging. And with a more contemporary platform, we'll be able to improve the customer experience even further. Putting in place a contemporary operating platform is the bedrock of ASX's ability to continue delivering attractive long term returns to shareholders, while also providing the financial services infrastructure of the future for the benefit of our customers and industry. I'll now take you to the financials on Slide 5. These show that ASX posted revenue of 951,500,000 an increase in operating revenue over the prior period, notwithstanding the significant effects of RBA policy settings.
This reflected growth in our listings and issuer services, trading services and equity post trade businesses. This was offset by a decline in our futures business, driven by lower bank bill and 3 year futures volumes. Total expenses were up $8,400,000 over the period to $310,300,000 in line with our guidance in February. This was driven by the continued transformation of the organization, plus rises in variable costs driven by market turnover. This leaves our EBIT 1.7 percent lower at $641,200,000 The RBA's policy settings also had a significant impact on our interest income.
With interest rates close to 0 and a decline in average margins Earned on collateral balances, interest income dropped 44 percent from 83,800,000 to 46,700,000 This leaves underlying NPAT 6.4 percent lower at $480,900,000 and statutory NPAT lower by 3.6%. The smallest statutory drop is due to a significant item in our FY 'twenty accounts. Underlying EPS of $2.484 a share was 6.4% lower. With our policy of paying out 90% of underlying earnings, this means total dividends for FY 2021 will be $222.036 per share fully franked. Now to look at the RBA policy settings in detail.
These settings include cash rates set at an all time low, quantitative easing, yield curve control and the establishment of a term funding facility. These policies and programs have meant that absolute rates have fallen, margins on liquid assets have fallen, and the volatility of short term rates has fallen. This impact on impacted on 2 revenue areas in our business. If we take out these effects, I'm pleased with the way the business has performed. With our revenues growing strongly off what was a high base in FY 2020.
In trying to understand the effect of RBA's policy settings And the opportunities that a normalization might bring, we've set out on Slide 6 our revenues since FY 'fourteen indexed to 100 in that year. Our revenues are split into 3 parts: the revenue purely from short end futures contracts, OIS bills and 3 year bond contracts, interest revenue on capital and margins and all other revenue, which is the thicker line. There are 2 key takeaways from this chart. Firstly, revenue from our businesses affected by these policy settings has fallen significantly from peak to trough. Interest income has fallen 53% and short end futures have fallen 35%.
Secondly and importantly, the rest of ASX's revenues have accelerated over the past 2 years and are up 19% since FY 'nineteen. Looking ahead, it's encouraging that commentators see a high chance of an unwinding of yield curve control in the medium term. This likelihood, Together with this continued strong performance of our other businesses and the ability to leverage the good foundational work over the last 5 years gives me confidence in the future. I'll now address some of the market drivers of our results on Slide 8. Aside from the issues just discussed, The drivers of the business have been positive.
In FY 'twenty one, we saw our best year for primary capital raisings ever. Importantly, with revenue amortized over 3 to 5 years, this year's effort plus the strong numbers from FY 'twenty We'll bolster our revenues over the next few years. To give an idea of the value added to the business in FY 'twenty one, If we looked at the old cash accounting basis of revenue recognition, FY 'twenty one was 26% ahead of FY 'twenty and in fact, 38% higher than FY 'nineteen. If I now look to cash market trading at the top right, Although FY 'twenty one became in marginally lower than FY 'twenty, this was still a pleasing result given the record trading volume in March 2020. FY 'twenty one is still well up over 18% on FY 'nineteen.
In our Ostraclear business, We can see that debt issuance has picked up significantly over the last 2 years. This has come from government, semi government and RMBS securitizations. Bonds On issue will also help stimulate the bond futures market over the coming years. And finally, at the bottom left, the other big driver of our revenues, futures trading, has reduced due to the impacts on the short end of the rates curve as discussed. Worth noting that hidden by our overall numbers Other strengths of the 10 year bond contract, up 15% and electricity products, which are up 46%, although these are offset by the lower SPI futures volume, this year down 25%, which is consistent with the trend of lower equity index contracts globally.
While our FY 'twenty one result reflects the impact of the current policy settings, it follows an extended period of solid resilient growth. FY 'twenty one is the 9th year in a row ASX has delivered positive operating revenue growth. Looking at our EBIT performance, The strength of our diversification is evident in our ability to deliver a result that almost rivals the prior record year performance in which the COVID driven activity levels set new records. ASX pays out 90% of its operating earnings, which has seen a steady stream of frank dividends and in FY 'nineteen, a frank special dividend delivered to shareholders. This policy has led to strong after tax total returns.
I'll now move on from the numbers To an update on strategy, we think of our business in 3 layers. The foundation is the operating platform. Over the last 5 years, we've improved our sustainable foundations and in particular transformed our business through technology contemporization. With a modern flexible and resilient operating platform, we're able to expand and enhance our customer value proposition with optimized products and services. And finally, ASX looks to leverage its skills and ecosystem into the adjacent growth opportunities that we see.
I'll use these three levels to take you through some of the achievements of the past year. So to begin, ASX can trace its history back 150 years. We've maintained and grown our position by earning trust for our actions as an organization, striving to provide resilient operations and supporting the efficiency of our markets. While technology changes the way exchanges operate, these elements remain constants that we seek to sustain. Notable sustainability developments this year include the completion of our first TCFD report, Our undertaking to switch to 100 percent renewable energy in FY 'twenty three, which will reduce our carbon emissions profile by over 85%.
This will be a significant step forward as we seek to achieve net 0 for our Scope 1, 2 emissions by the end of FY 'twenty five. On the people front, I'm proud to report that we're achieving gender pay equity based on like for like roles, and as a result of our current operating model review, 45% of my direct reports are women. We've also increased our female participation workforce target from 40% to 45% by FY 'twenty five. Risk management is also critical to our ability to serve Australia's financial markets. We remain committed to focusing on and investing in cybersecurity and enhancements to clearing risk systems and processes.
Progress continues towards our goal of transforming the technology stack at ASX. This is via the upgrading Volder technology and hardware and the digitization of manual processes. We are also introducing new technologies such as DLT based systems and a big data platform. The best way to maintain our franchise is to continue to be an innovative exchange at the leading edge of technology. This imperative has become more pronounced since the pandemic and will be particularly important over the coming 10 years.
In this rapidly changing world, all technology platforms will find it hard to compete. That's why ASX has a specific strategy to reduce technology debt within the organization. Not only do these investments improve our resilience and lower our business risk, They enable greater efficiency and functionality and faster delivery of products and services into the future. As you can see on Slide 11, our stack of key equity technologies, although serving ASX well for many years, was aging. We've upgraded across all levels of the stack over the past 5 years and with the rollout of CHES and some related operational databases over the coming 12 to 18 months, This body of work will be complete.
There are a number of really important takeaways here. Firstly, this is a significant amount of work, nearing completion and is the largest program in ASX's history. Secondly, this quantum of fundamental change is not easy, And making these changes whilst running in exchange at record volume levels during a pandemic creates further challenges. Thirdly, although it's hard to put a value on it, any perusal of this chart shows the significant amount of long term risk reduction taking place. And finally, in a world dominated by digitizing, which enables businesses to move faster with more contemporary and flexible technologies, These changes create significant future optionality for the organization.
Change is not easy, especially for a company with the reach and profile of ASX. Every day, many companies have technology incidents. The easiest way to reduce the risk of them in the short term anyway is to not change anything. In the long term, however, this is a false choice because it creates even more risk. ASX holds itself to a high standard.
While we've been undertaking significant change, we've also focused on our resilience. We're sorry for the equity trading outage late last year and regret the disruption it caused. However, we're also Proud of our performance to reduce incidents across ASX by close to 90% over the past 5 years. Our performance over time, Not our performance on a day is the best measure of long term organizational resilience. As you can see from the chart on the left, We have dramatically reduced incidents over the past 5 years.
Even in the last 12 months, this trend has continued. Our focus and the investments in upgrading hardware and software has led to a reduction in outages in our key market systems as shown by the chart on the right. Our resilience has also been enhanced by the adoption of a continuous improvement approach to incident management. In recent years, we've improved our incident management systems, processes and policies as well as adding people and skills. This means for every incident with a customer impact, we conduct a post incident review.
With the benefit of hindsight, all incidents offer learnings about how to improve. Our review of the November 2020 outage has been extensive. It involved engagement with our regulators, our technology provider, NASDAQ and our customers. We've already taken steps to strengthen our processes and practices in the area of project delivery, governance, risk management and testing. In addition, we commissioned an independent expert review in consultation with our regulators.
We expect an update from them shortly. And as I close on this part, it's important to note the interaction of these last three slides. And to be clear about ASX's long term goals, these are to reduce our risk and to improve our resilience. This doesn't mean that there will be no incidents or outages in the future because there will be. What it does mean is, is that we will continue to apply The appropriate resources, keep our technology contemporary and learn from our experiences even when they are painful to reduce the chance of future incidents.
The progress that we've made in reducing incidents and outages over the past 5 years and clear is clear and validates our approach. So if I now move up a level on the pyramid to growing our customer value, There are a number of proof points over the course of FY 'twenty one and longer term strategies that are gaining traction. So listings. Our listings business in FY 2021 had a particularly strong year, while annual listing fees were subdued due to the low level which the index began in FY 2021. And with an accounting methodology that amortizes the income from capital raisings, Listing revenues were still up 3.8% year on year.
The recovery of the index over the past 12 months and the amortization of FY 'twenty one fees over future years bodes well for this business into the immediate future. This performance has been driven by a long term strategy of building our capital markets, enabling ASX to develop a broader market in domestic companies and also attracting companies from around the world to our exchange. This year, we saw 176 new listings, plus 23 backdoor listings, an increase of 107%. There was strength across the board. We saw the highest number of mining listings since FY 'eleven, 15 healthcare listings, the highest number since FY 'seventeen, 9 new listings from New Zealand, which was a multiple of recent years.
ASX has been targeting technology listings over the past 5 years, And pleasingly, we saw 43 listings, the highest number in this area since FY 'seventeen. ASX bats above its weight globally in this area, which is good for the technology ecosystem in Australia as well as being good for ASX and investors. This is underscored by the success of the S and PASX All Technology Index, which grew its capitalization by 38% in FY 'twenty one and expanded from 45 to 79 companies. It also reflected in the success of ASX listed technology names such as Xero, Afterpay, WiseTech, which deepened Australia's position on the global technology map. This is not to say we list everything that comes our way.
In fact, ASX rejected 36 listing proposals in FY 2021, mostly for the reason of being too early stage. Maintaining high standards is just as important as growing the ecosystem. Our listing success is not confined to listed companies. Listed investment products also saw significant growth in FY 2021 with ETP from in CHESS growing 53% year on year to 98,000,000,000. There were 21 new funds admitted in the year, mainly in the global equity space.
We are proud of our performance in this area. And while the market is very buoyant at present, The more important thing is the longer term trends across this business. Now to derivatives. The derivatives team implemented a range of customer product service and process enhancements over the year. Some of these are detailed, such as changes to Austraclear that make the lives of bond dealers easier, changes to the bond futures, tick increments for the role and moving the bank bill contract to cash settlement.
However, let me focus my comments on 2 product initiatives launched during the year. Firstly, the 5 year bond futures contract. This new contract reflects an opportunity created by the 3 year bond rate being subject to yield curve control. The 5 year area of the curve is a crucially important one to swap dealers, borrowers and fixed income managers. However, Given that the 3 year bond yields are being controlled by the RBA, if I need to hedge, what instrument do I use?
We saw this issue play out in the early part of the year when the whole curve moved up violently only to see the 3 year part get dragged straight back to its YCC levels. Anyone who owned long positions in 5 year swaps or bonds and hedged with 3 year futures saw a dramatic movement against them as shown in the chart. If, however, they had hedged with 5 year futures, they would have seen minimal volatility in comparison. We believe this contract can be a valuable interest rate management tool, And the price activity of the last 6 months affirms our positive view on the long term outlook for this contract. Secondly, our electricity derivatives business is continuing to expand with volumes growing at double digit levels for a few years now.
ASX has increased its focus on this area. For example, we've introduced 5 minute caps, hedged the variability coming from a more renewables based electricity generation mix. Product innovations such as this are important for our customers as the economy moves towards greater electrification via renewables. We've also put new market making schemes together for both Australia and New Zealand. We have been working within partnership with the regulators to improve volume, market structure and transparency.
Interestingly, this initiative also is using the DataSphere platform to manage market making and regulatory data requirements. Another good example of ASX getting closer to its customers in FY 2021 is the development of the market data reporting module. This has replaced the previously intensive manual processes for subscribers of ASX real time market data products. The new online process reduces operational risk for our customers. They now track and confirm their current and historical reporting via the portal, while allowing our data business comprehensive insights on data usage trends and new product ideas.
In recent months, we expanded the portal to include data licensing functionality. This facilitates customer onboarding, enabling clients to sign up for an ASICS data license by DocuSign and submit their usage reports all in one visit to the site, thus offering straight through and seamless customer experience. The team will continue to roll this functionality out to new data usage types over the coming year, ensuring we're prioritizing the customer experience. So CHESS, work continues at pace on the CHESS replacement project. The project is transitioning from the requirements and build phase to the test, integrate and transition phase.
As we speak, the final code drop is being delivered, which includes the extra scale and scope work resulting from the consultation in FY 2021. This will be loaded onto the customer development environment in a few weeks, giving software vendors all they need to code and test their application. At the end of the year, the system will be available to these vendors in an end to end environment in preparation for a full customer test environment in April 2022. Chest replacement and our related corporate actions STP program are removing a number of manual processes from the market. For example, Corporate Actions STP, which went live in June 2021, uses online forms to reduce operational risk for issuers.
It also supports efficiency gains across the industry as the more Accurate comprehensive information is distributed faster and in the easy to process global standard ISO-two thousand and twenty two format. Chest replacement is also simplifying and digitizing a number of manual processes in the election and maintenance of dividend reinvestment plans. Currently, custodians and investors need to manage their preferences for each DRP via a variety of manual processing options, whether that be mail, e mail, fax or online portals and across multiple registries. Under the new system, Chesler will provide the ability for custodians and brokers to collect their investors' DRP preferences online and have that information automatically routed to the relevant registry. Through this new automated functionality, a process that can currently take days will be done in real time.
Finally, I'll comment on the progress being made by DLT Solutions and Simply. While our main focus with DLT is in relation to chess, There's also been good progress by the DLT Solutions team. In January this year, we launched the customer Damel Sandpit. To date, we've had over 20 different firms log on and get to know the DAML smart contracting language. Next month, we'll launch our DLT cloud environment, which will be using the same blockchain technology that Ches will be using.
We will first open up a development environment then have a production capability by the end of the year to support a number of our customers who we expect to go live. 1 of these customers is KPMG, which is creating and operating the New South Wales Government Building Assurance solution. At its core, the distributed ledger based application We'll deliver a trustworthy index for buildings based on the source and quality of the materials and contractors used in construction. This will enable interested parties to distinguish between compliant resilient buildings and non compliant problematic buildings. We also have other customers with applications in corporate governance and equity back office process improvement.
I also note that Damel and DLT is being used by the Hong Kong Stock Exchange for the Shanghai Hong Kong Stock Connect, and Broadridge has gone live with the same technology in the U. S, dealing multibillion dollar transactions on a treasury repo use case. Broadridge, in fact, is also working on a solution for off market transfers down here in Australia. And on simply, we've had a positive 6 months. Interoperability is now a matter of when rather than if, with the New South Wales government leading the charge to phase introduction of this in the New Year.
Three banks are connected, and we expect the final major, which is currently testing to be connected in the next few months. With 1 banking partner, we are processing standalone mortgage discharges expected to begin doing this with the 2nd bank in the coming months. We have confidence in our value proposition to win market share given our modern platform, integrated experience and competitive pricing. With that, I'll hand over to Jill to take you through the financials in more detail. So thank you, Jill.
Over to you.
Thanks, Tom. As we have stated, our results for 2021 show the full year impact on our business of operating in a low yield environment. Income derived from our derivatives business, coupled with lower interest Earned on our own cash balances contributed to a drop in statutory profit for the year. This was not unexpected. However, the business was delighted to see the continuation of solid equity trading, the rise in commodity volumes and a strong number of initial listings for the year, all of which partially cushion the impact of the low yield environment.
Turning to the financials and starting with the top line. Total operating revenue for the full year increased 1.4% on FY 'twenty. This reflects the continuation of the first half thematic of Solid performance by our Listings and Issuer Services business, cash market trading and equity post trade businesses offsetting the decrease in derivatives And OTC clearing revenues. Of note, too, is the 2% revenue increase in second half 'twenty one from the first half, primarily through further growth in Information Services, a strong second half for listings and the change in rebates payable in our post trade business. Total expenses for the group increased by 8.4 percent to $310,300,000 due to costs associated with higher volume activity, business initiatives And depreciation and amortization increasing for the first time in a few halves with the completion of major projects such as our secondary data center.
Moving through the table, the interest income line shows a significant decline from the previous year by 44.3%. This fall was through the decreased earnings rates with lower revenue from this income stream, leading to a decrease in statutory profit after tax of 3.6%. This translated into the same decrease in EPS with the board declaring a dividend of $111.2 per share for the half. Now to the revenue results of our key business lines. This slide depicts the 4 business lines ASX This operated over the last few years.
With the recent review of the operating model and realignment under newly appointed group executives occurring over the next 6 months, We expect to show the repointing of the revenue lines at the first half 'twenty two results. For this financial year, however, it remains the same as prior years. The growth in listings and issuer services is a direct result of the focus on enhancing ASX as a place to list and raise capital. The year saw an increase in foreign companies on our board as well as an increase in initial capital raised. The strong equity Trading value from 2020 came down slightly in 'twenty one.
However, it was still higher than the long term average daily cash market trading volume prior to COVID. These conditions have continued to assist all our equity trading offerings across the sub business areas of Issuer Services, Cash Market Trading And Equity Post Trade Services. This activity and the strong increase in demand for index and benchmark information in our Trading Services business Partially defraced, the 10.4% decrease in the derivatives business and allows for a 1.4% increase in revenue overall. Our listings and issuer services revenue is 8.9% higher than last year. The majority of this increase is by recognizing this year's amortized income from FY 'twenty secondary listing fees and the ongoing growth in our Issuer Services business, which saw an increase of 23.6% against last year.
Our annual listing fee revenue was down 2.7% because of the lower number of build companies and lower market capitalization from the prior year. Initial capital raised increased by 50.5%, Ablely assisted by the large increase in listings to 176 entities compared to 83 in the prior year. The revenue increase is not reflected in full year due to the 5 year revenue amortization policy we follow for initial listings. The reverse to this has occurred with secondary capital revenue. Raisings were lower by 11.8% this year due to the elevated prior period comparatives.
However, the amortized share of last year's activity contributed to the increase of 14.3% in revenue for FY 'twenty one. Issuer services increased by 23.6 percent due to the heightened equities activity and the items attached to this, including holding adjustments, Transfers and conversions. Moving now to the Derivatives and OTC Markets business. Our derivatives and OTC Markets business has continued to experience a decline in futures volume since March 2020 when we entered a period of low interest rates. Futures volumes are down 15% due to the low activity in the short end interest rate market.
However, this was offset by a higher average fee through the increase in commodity volumes, up 60% on PCP. This contributed to a decrease in future revenue with the value being cleared through the OTC clearing service continuing to come down from first half 'twenty, reflecting a decrease in OTC revenue. Combined, this led to an overall 11.8% decrease in total derivatives and OTC Markets revenue compared to FY 'twenty. Equity options revenue has decreased by 37.3 percent from FY 'twenty. Equity Options volumes continue to decline with single stock options volume down 13.7% on the same period last year and index options down 45.9%.
In addition, a one off rebate scheme, the options liquidity growth program introduced in the Q3 of the year further reduced revenue in this line. Our Astraclear business provides settlement, depository and registry services. FY 'twenty one saw higher registry and transaction activity with the overall revenue coming in 4.4% more than last year. Total holdings of debt securities remain high at 2,700,000,000,000, up 13.1% on last year. It is of note that the results of this business also include the performance of our investment in Simply.
Our Trading Services business result reflects the strength of the underlying business drivers in a year of further market volatility. Although cash market trading revenue came in 5% below last year, with FY 'twenty being our highest trading year on record, This was still strong enough to partially offset the lower average on market fee due to smaller contributions from the auction and center point products. Information Services saw a strong year, contributing a 10.5% revenue increase from FY 'twenty, assisted by a rise in market data royalties through higher trading activity by retail brokers. Technical Services saw a marginal increase With revenue coming in at 0.9% more than FY 'twenty. This was due in part to growth in hosting and connections with the number of cabinets up 12.9% and ARC connections up 8.5% on FY 'twenty.
This was negated slightly by a decrease in futures connections with futures gateways down 17.1% induced by changes to PTRM and to the bond roll tick sizes introduced in the first half of the year. Finally, moving on to our 4th business, Equity Post Trade Services. The Equity Post Trade Service business showed strong growth of 12.8 percent in total revenue, mainly due to the change in applicable revenue sharing rebates for FY 'twenty one because of the heightened volumes in 2.5 'twenty. This was most notable in the cash market clearing revenue business being up 8.6 percent to $71,000,000 despite a decrease of 3.6% The value of on market trades centrally cleared. Revenue from cash market settlement increased by 17.2 percent to 72,700,000 due to growth in transfers and conversions.
As previously stated, there was no rebate applicable for the clearing business for this year. However, dollars 4,500,000 is payable from the settlement business compared to $6,100,000 in the prior year. Total expense growth for FY 'twenty one has a similar composition to previous years, with an overall increase in FY 'twenty one of 8.4%. The uplift was mainly through the increase in employees. The average full time equivalent headcount increased to 742 compared to €709,000,000 in FY 'twenty.
Costs associated with ASX's technology program, including cybersecurity, As seen in the equipment cost line coming in at 20% more than FY 'twenty. As predicted in the first half, the heightened trading activity continued into 21, resulting in the variable cost line 32.1% more than last year. The depreciation and Amortization increase of 6% rose in the second half through projects such as the completion of our secondary data center. All these factors combined led to an overall increase in total expenses of 8.4% for FY 'twenty one. This slide reflects the full year expense growth composition for the last 4 years.
It shows the spend required to bolster the technology, risk and governance Foundations of the exchange. The highest cumulative growth over this time has been in headcount. However, The last 2 years recognized the growth of variable costs connected with market related activity, the heightened equipment charges that have increased through the upgrade of operation and service capabilities at And increasing software licenses and costs associated with cybersecurity. The expense guidance for FY 'twenty two It's 5% to 7%, which includes costs associated with our program of improvement following the equity market outage in November 2020. Total net interest income decreased 44.3 percent to $46,700,000 for FY 'twenty one.
The near term expectation is that rates will remain low. It is clear from the results that portfolio returns have declined as maturing investments have been replaced with lower yielding investments. This is evident in the decrease from first half to second half across both group net interest income and net interest earned on collateral balances. The average earnings spread on participant balances has moved from 37 bps to 13 bps, which, when combined with the reduction in the futures client charge from 65 bps to 45 bps in the middle of FY 'twenty, contributed to a decrease in overall net interest on collateral balances of 33.6 percent, although the increase in average collateral balance to $12,200,000,000 has definitely negated some of this impact. ASX's balance sheet is Strong and positioned conservatively with a standard of pause long term rating of AA- and a nominal amount of debt for working capital purposes.
Of note, Amounts owing to participants were down $462,400,000 reflecting a decrease in open positions, held in interest rate and equity index futures. Of note, too, has been the growth in the software balance, which is mainly attributable to the increase in capital expenditure in FY 'twenty one. Our investment in capital expenditure in FY 'twenty one was $109,800,000 inclusive of chest replacement, ASICS trade and other key projects. Chest replacement is the largest project. Through the replanning exercise carried out late last year, our technology work program was reprioritized and expanded to fit the demand for increased volumes, functionality and testing.
This extended the capital expenditure associated with the chest replacement project over a further 2 years from the original go live date of April 'twenty one. We are forecasting our entire CapEx spend for FY 'twenty two To be at similar levels to this year and have set guidance in the $105,000,000 to $115,000,000 range. Underlying earnings for the second half was similar to the first half with a strong trading and capital markets activity through the last 6 months, not enough to combat the lower futures revenue and investment spread income. This led to underlying profit after tax decreasing by 6.4% and to an underlying EPS decrease of the same amount. The board has determined a second half 'twenty one fully franked dividend of $111.2 per share, contributing to an overall payout of $0.236 per share for the year.
This represents a decrease of 6.4% on FY 'twenty. The dividend can be fully funded from retained earnings and represents a payout ratio of 90% of underlying NPAT, in line with our dividend policy guidance. In summary, the FY 'twenty one result reflects the strength of ASX's diversified business. While conditions were mixed, we continue to deliver resilient earnings and invest in technology that positions us for long term sustainability. This will benefit our people, customers and shareholders and the future of Australia's financial markets generally.
With that, I will hand back to Don. Thank you.
Okay. Thank you, Jill. So before we move to questions, I'd like to update you on our outlook, including some structural changes in progress at ASX. As you've heard today, ASX is moving into a more technology based future. In reading ourselves for this, we are refreshing our operating model to ensure our structure best reflects business priorities, supports growth, aligns with our customers and enhances accountability and delivery.
As you can see on the slide, we've retained 4 business units, but align some activities within them more logically. Each divisional head will report directly to me, enhancing accountability at the leadership level. The new structure better reflects the 4 core services we provide to the markets: our listings business, focused on pre trade capital markets of both companies and issuers of products. Our securities and payments business focused on the administration and servicing of securities and the payments related to those services or other payments such as simply. The markets business focused on all of our trading activities from equities to derivatives, including debt, commodities, electricity and finally, a pure technology and data business, focused on the technical and information services we provide to our customers.
In simple terms, what this means is Our Issuer Services and Ostraclear businesses have moved into securities and payments, and cash market trading has moved into the markets business. Another important part of the new structure is the creation of an expanded customer function. This aims to improve the end to end experience for customers by bringing together our customer facing operations, communications, marketing, digital and program delivery activities. This program is not just downsizing exercise, it's about making sure we're best set up to serve the needs of our customers and deliver a significant program of work. So now to our outlook.
The outlook for our business looks encouraging. Combined with our increasing operational momentum Arising from building from Stramp's building stronger foundations in recent years, I expect it to be another busy year ahead. However, We're in our 9th week of working from home in Sydney, where the majority of the ASICS team is located. The health and well-being of our people is our priority. And at all levels of the organization, we're working to keep our people connected and supported through this challenging period.
Equities trading is likely to remain robust given the ongoing uncertainty due to COVID, both here and around the world because of global economic and geopolitical issues. The listings pipeline currently looks well supported as we continue to see interest from New Zealand companies considering this on the ASX and the buoyant mining sector. The outlook for interest rate derivatives is evolving and will be driven by the timing of the unwinding of the RBA's current policies. We've already seen the term funding facility close on 30 June 2021. QE purchases have been slowed, and as mentioned, the expectation is that YCC will unwind at some point.
Energy derivative volumes will continue to be supported by the transition to renewable energy. And Ostraclear's holdings and transaction volumes should be supported by bond issuance associated with fiscal stimulus, funding and mortgage growth. Operationally, chest replacement is moving to the End to end industry wide testing on its way to go live in April 2023. And in a step down from FY 'twenty one, FY 'twenty two expense growth is expected to be between 5% and 7%. And while capital expenditure guidance for FY 'twenty two is $105,000,000 to $115,000,000 aligned with the completion of chest replacement, we expect outer years capital expenditure to moderate.
So in summary, you can see the points there. I think they're reasonably straightforward, and I think we've covered them sufficiently during today's presentations. So with that, I'd like now to move to Q and A where Jill and I can answer your questions. So with that, I'll hand back to the moderator. Thank you.
Thank you. Your first question comes from Sathath Parameswaran with JPMorgan. Please go ahead.
Good morning, Dom and Jill. Just a couple of questions from me if I can. Firstly, just on the Thanks guidance that you've given 5% to 7%, that certainly had dropped from the last couple of years. I was just hoping you could perhaps flesh out our Thinking about the outlook from here on, I mean, I noticed that obviously there's been quite a lot of CapEx spend the last couple of years, and I think DLT still hasn't started being Amitai, so I was just hoping to get a reading on whether we've seen the peak in expense growth or whether There might be some bumps along the way. I'll
take
that one. I might give that one to you.
Yes, done. Well, certainly, there's no doubt that when we go live with our CHE system, our new one in 'twenty three, April 'twenty three, that certainly D and A will start hitting our expense Come out of the balance sheet, we'll hit the expense line. We obviously have our own 5 year plans. We're already looking out that way. And I think our view is by sharing with you our total expense next year, 5% to 7%, certainly before we do get that sort of chest.
But we feel we believe we're looking at expense growth in outer years of going back to similar levels prior to FY 'nineteen. As you can see from our expense slide, it really has gone up in 'twenty and 'twenty one, and we do think we're coming back to a more normalized expense rate that you've seen in the past. So I hope that helps you, Sid.
I'd just add to that, Sid. Just in sort of like you're talking to sort of like the medium term or whatever, if you look at the Expense growth, you saw sort of like the more pronounced expense growth sort of into sort of like FY 'eighteen and 'nineteen and it of being moderating and then as you point out, it's moderated quite a bit this year sort of thing. So I think I feel like we're getting through the sort of like the hump of that. And then if you look To CapEx, CapEx is the has risen. And I was looking at some old numbers the other day looking back with similar sort of rises around the time when we did the ALC back in 2011.
And that now is sort of like gone sideways. And as I've said in my comments, I think that then starts to come down after that. So I think that the OpEx sort of like rise came earlier and is tailing away now. And I think the CapEx rise, We're at our sort of peak and then we tail away from here, if that's helpful.
Yes, that's helpful. Thank you for that. If I could just ask a question just on simply you flagged that there is some momentum there just in terms of getting banks Connected, etcetera. You haven't commented on CapEx or further investments that you're going to make On a go forward basis, could you just perhaps just flesh out whether there's need for significantly more CapEx on or investments on Fingli
I think so there's 2 things there. One is, I guess, that over the last 3 years because we've been sort of a little bit hamstrung by the speed of the take up by the banks Because of just the busy nature of the market over the last 3 years, the investment has probably been stretched out over that period. And so now, we're actually we hope over the course of the next year, we've got Those connections happening, we will hopefully start to see some revenue as we actually particularly as we get to sort of like the back end of the year with interoperability being enabled. And I think sort of like the relationships that we have with Some of the banks there in looking for better integration and perhaps lower costs means that we can sort of drive those revenues from there. So I guess the revenue playing off against cost, it will depend on how quickly those revenues come in going into FY 'twenty two and FY 'twenty three.
The other thing I'd say about it, Sid, it's been interesting sort of Over the last number of years, I mean, when we started this journey, we were looking at the incumbents, which had a valuation of something like 600,000,000 net now is a listed entity that has a market cap of something like 5 times that. And so I think this is a really interesting space. I think that we actually we've got through a whole bunch of the regulatory issues, re interoperability and others Such that actually we can now hit the market with what we think is a better product, a lower price point and an ability to sort of like move faster with much more modern technology. So I think it's been sort of like a longer road because I don't think we could have predicted the Everything from Hain to AUSTRAC to all of the things that have sort of like slowed that connection process, but having got through that Over the course of the next few months and then into an interoperability environment, I think sort of the back end of 'twenty two and 'twenty three should be where We see the business start to really come into its own.
So just to be clear, I mean, it sounds like not a large CapEx spend or investment spend. You're saying that roughly revenues will start coming mean, offsetting whatever extreme investments you made, is that the right takeaway?
No, I don't think for FY 'twenty two. I think still I think FY 'twenty 3, I think you'll see more revenue coming in. Anything you want to add to that, Jill, on the numbers?
No, I was nodding because it is Sort of it is a small number, Sid. And so that's why we don't have it out there. So certainly in FY 'twenty three, we expect to see revenue coming through, Okay.
Okay. That's very clear. Thank you for that. And just the last question, just are there any changes in average fees in any of your That we should be considering on a go forward basis. I mean, I know that for us anyway, one of your line items Because trade, just the lack of the rebate surprised us.
So I was just wondering if there's any changes that you'd like to flag on fees in any of the different segments.
Maybe I'll toe that one, Dom. Certainly, no, at this present time, we don't see that. But things can change as we all saw through COVID. Certainly, we had that moment. We froze our fees through the back end of COVID.
We're now out of that. Shame to say that and when we're all still feel we're in COVID, but I think you understand what I'm saying. And so we there's nothing to actually call out at the moment that you should be reflecting.
Okay. Thank you.
Thanks, Sue.
Thank you. Your next question comes from Andy Chuuk with Macquarie. Please go ahead.
Good morning, Bum and Jill. First question is just on CapEx. So you commented that CapEx is expected to moderate in the outer years. Can you provide some color on the quantum of that moderation and what the longer term expectations for CapEx is? Thanks.
We probably we don't sort of give forward sort of guidance out past a year on that. I think what I would say, if I looked out over 5 years or whatever, I would Say that the underlying CapEx or the BAU CapEx of the organization is going down. I think Slide 11 shows you that If you look at the what needed to be done to what has been done from FY 'sixteen to say FY 'twenty two, 'twenty three, You can see that there's not a burning need to be doing an enormous fixes there sort of like into the future. So you can say that's sort of A little bit off the table. There's some work to do on the derivative side, but I see that as being less.
And the important thing is there is, I think, With some of that work, it's actually building on stuff that we've done in the equity market as far as sort of equity databases or Perhaps, OstraClear, when we replatform that, it would be replatformed onto a sort of like a chess look alike. So that would then be sort of like cost saving as opposed to sort of doing that from scratch. And so the only thing I then would say into the outlook, and I think this is a theme through the whole The last 5 years has been about a lot of that foundational change. And I think the next 5 years, although there are things to do, the next 5 years could be more about customer products and Services to then build on that foundational change. And so I don't know exactly what those things will be in the outer years, But those things will be less foundation, will be more much more focused on revenue generation if that sort of like helps you.
But If we just take that to the side and say what's the underlying run rate, we've gone up this hill of the last couple of years of The biggest replacement things we'll do, which is the whole sort of equity, not just chess, but all the things that sit around chess and the equity market. And then I think we're going into a period and if you look in the history of ASX, actually, CapEx has gone sideways for I think CapEx was I think was something like $50,000,000 in 2011, it was $50,000,000 in 2017. So, yes, I'm not saying it's going back to those levels, but I'm saying that we've got a big spend and then I think it moderates from there just how far back. I think Sort of I don't think we'll be sort of like putting that out in results now as to where we'd be in 'twenty three and 'twenty four. But hopefully that gives you a little bit of the thinking.
And maybe I can add to that, Dom. I think our view is, as Dom has said, dollars 50,000,000 is probably too low, especially if we're talking about so many years back. That's certainly what we're seeing today would be definitely on the high side. So yes, we can't give you a forward forecast, but you can take out of that what you will.
Great. That's very helpful. Thanks. The next question is on the expense guidance of 5% to 7% growth to next year. You just confirm how much of that growth relates to the improvement cost from the outage and whether those are one off or recurring?
Shall I
do that one, Dom? I can do that. Certainly, there were costs associated with the market outage This year. And to be honest with reparation work that we see that we need to do in FY 'twenty two, That will be basically the same amount. And so when you look at that 5% to 7%, that does include Any extra expenses for the trade outage last year?
Sure. And is that a 1 year impact? Or is there more to come in the outer years?
I think it's pretty much a 1 year impact. I think
so too.
Yes.
There might be like it's better.
Can I help you further? So when you see that expense percentage growth, 8.4%, If you go into the administration line, you'll see there extra increase in expense, and that really was the extra work that we had to do on the back end of that outage.
Great. That's good color. Just one last one for me. Just with the cash holding statements expected to go digital at the end of this year, How should we think about the impact to earnings?
That was just the e statements.
Sorry, I'll repeat it. So with the CHF holding statements expected to go digital at the end of this year, how should we think about the impact to earnings? Thank you.
I think what I'll maybe Jill, you can follow-up. The issue around digitizing the CHEST statements a lot Comes down to actually the gathering of the email addresses and obviously with privacy concerns about emails And how they can be used and people have to sign off for specific purpose or whatever, which means that that's not an easy process. So I think that will even though the digitization of that thing will start, I think it will take some time for that to get traction for actually people to Send their emails to ASX or their brokers, in fact, them to send it to their brokers, their brokers are sent to ASX to enable ASX to then do that. So I would say Probably across this financial year, it would be across FY 'twenty two, I don't think there would be a significant impact. Jill?
No, I completely agree. It's all about uptake, and I think our view is not everyone's going to do that overnight. And so slowly, as people become accustomed and we can bring them on, Then we'll be able to see the impact on revenue. So right now, I think there'll be a slow buildup.
Okay. Thanks. That's all from me guys.
Thank you.
Thank you. Your next question comes from Ed Hanink with CLSA. Please go ahead.
Thanks for taking my questions. Just firstly, going back to fees, can you just clarify what Annual fees coming through this year are expected to come through and will be any catch up from any fees that were frozen during the COVID period? And then secondly, can you just go back and run through the rebates for us a little bit around levels, especially in settlements? If you think of the volume to come back, will they come back in 'twenty two?
Okay. So we'll start with the fees. We're not Recovering what we froze. And so that was lost in time as far as I'm concerned. And so now we just come back to Normal event of how we look at our fees, which is a nominal CPI increase, obviously, in our listing space.
And then we certainly review our Trading services business each year, comparing with the market and competitive forces. So I actually think we're back to normal, if that helps you with how we've looked at fees in the past. With regards to the rebates, different for clearing and settlement. Obviously, clearing was well, put it this way, our total market trader value was down from the highs of last year. So what that meant is that from a rebate perspective, there wasn't a rebate because we actually have a share scheme that shares 50% of the growth.
And so that's why it was nil for clearing this year. Settlement different. Certainly, the number of transactions and the level of activity, as you've just called out, Ed, It meant that there was somewhat of a rebate even though it was less than last year because last year was so high. Going forward, That's interesting. I don't know whether, Don, whether you want to take that because it's more about the outlook on trading.
Yes. No, I think that's right. I think you covered it well, Jill, in the whereas last year, there was a big jump up and big growth In clearing, which is very much related to cash market trading, and so the big jump up last year created a rebate. This year, there was no growth. In fact, it went slightly back.
There's no growth in clearing. There was sort of there's been 2 jumps in settlement, settlement Again, larger this year than last year, although not as large. And so the rebate was smaller. So there's still there was a rebate effect in there, but certainly not back to effectively 0 in the case of clearing. Then ongoing, I think we're already at quite Sort of raised levels, I guess, in the market, but it just feels to me with all going on in the world that the equity market will continue to remain sort of buoyant in its volatility.
And I guess the other and the secondary thing, which probably has pushed settlement a bit harder is the fact that actually there's been a significant amount of retail participation in the market, which means More of sort of stock moving around in and out of HINs into our accounts and back and forth from issuer to in sponsored register that sort of thing. So that if that continues that will hold up that market.
Thank you. Your next question comes from Andrei Stadnik with Morgan Stanley. Please go ahead.
Good morning, John. Good morning, Jill. I wanted to ask 2 questions. First question, can you talk a little bit about what the Full test of the chest replacement planned for April next year, what that test will involve?
April next year. So just to give you a bit of a run up into that. So at the moment, the sort of the last Software into what's called the customer development environment, which is the customers have been in there for 1 to 2 years So they're testing their software. They've been testing software against a bunch of releases as it builds to a full system. What they're going to get is the last Such that they'll have a full system and everything they need, and that's in the next few weeks.
Then That will again put into an end to end environment as opposed to a sort of development environment in November. And that will be for software vendors to work their connectivity and their interaction with the chest replacement Software, but in a full end to end environment with the full blockchain and full application. And that obviously has Testing to go through. So there's testing going on now. Then there's in the development environment, there is testing then going on.
And when we get into The what we call the ITE 1, when we actually go into April, that means Like basically everyone in a full environment and that should be effectively What is a full sort of enterprise grade software that people can go can basically access and do everything they want to do. As far as then testing and you'll note From there is actually a year to go before actually we get to live. So beyond that point, there is a huge run of Accreditation, transition of data, sort of testing with of the functionality, testing with transition data, trying to as best get something that Sort of almost like mimic a parallel run with what is already there. And so when we extended out the time period for this project. A lot of that was actually giving more time to this testing piece.
And then we go Dress rehearsals in the early part of next year and all the full connectivity and effectively we go live from there in April.
Thank you, Dom. If I can ask a second question also Around the chest replacement. I think in the recent interview you mentioned that when it does go live in April 2023, you still expect 99.0 percent of participants to be communicating using an updated Message and standard and 10% coming into the full blockchain connection. Can you talk a little bit about About that, like the 10% seems a bit low. And do you need more participants in Connect through the full blockchain connection in order to unlock potential for further future revenue growth.
Yes, I think I'm not sure where you got that stat from. But yes, there are I think what I would say is on day 1, there are A number of people who are going live with the full effectively connecting to the node. I think that but I think there's also A number of people who are looking to actually bring that in over time. And so what I'd say to that is that The major sort of expense really and pain of all this is actually the changeover. And so Actually, I think a lot of people would to the point of saying, we just want to actually get this done.
We're changing from chest messaging. We're changing to ISO messaging. That's good because basically that's what we do for other things. And that makes that easy. And then from that point, We can actually once we've bettered that down, we can start thinking going forward.
And I think at the last half, I sort of talked to this in the fact that there is A big thing to move people onto the system, but once they're onto that, and I think what I'd say is the early adopters will get the advantage of they will sort of hit the ground running on that. And I would think that the benefits that they can sort of glean out of that will allow Then it will allow them to move forward and I would imagine others to look at that and think this is a technology and a benefit that we also need to have. I talked to Broadridge running a similar, Obviously, a lot lower volume into sort of instance of this Technology and Blockchain Ledger in the U. S. And certainly over there, the early adopters of that are saying that this We should be able to save a whole bunch of money for them and actually make their processes more efficient.
But I think as I said with this, this is A generational change in technology and probably when chess first went in, it took a while for people to work out how they can make that more efficient And probably were quite manual in the way they used it. And 5 or 10 years later, they became a lot more electronified. And I think this is just taking to the next stage.
Thank you, Dom. Thanks.
Thank you. Your next question comes from Kieran Chidney with Jarden. Please go ahead.
Hi, Don. Hi, Jason.
Hi, Kieran. I have
questions around some of the revenue line items. I mean, maybe just starting on futures, the average fee per contract moved even higher in the second half 'twenty one. I'm just wondering sort of whether or not that's sort of more driven by participant mix shifts that are ongoing or whether or not There's been some sort of contract mix shift and sort of growth in some of those new contracts at different price levels.
Do you want me to have a go or Yes. What I would say is I think you're sort of on track. I think there's 2 things. I think There's a little bit less sort of like trader inside that, a bit more end user inside that. And the Second thing I would say is that whilst you have the interest rate business see lower volumes, You've seen the electricity or commodity business, which works off different numbers like the average contract value is Yes, as far as like dollars per contract, as far as revenue for us goes is quite different and that grew something like 45%.
So I think that probably had a bit of an effect on it as well. Have I got that right, Jill? Or
Absolutely on point. Yes.
Okay.
Okay. As I mentioned,
Some more of that trading activity come back with your control dropping out. We should sort of from a mix point of view, from a participant point of view, I should say, you'd expect that That's safe per contract to start to reduce in outer years?
That's right. The P might come down, but the Q will go up. How about that?
Yes. Yes. And then on sort of information services, some very good growth there in second half '21 as well. Just wondering, is that purely all underlying growth in sort of service volumes? Or have there been fee changes We should be aware of it in some of that segments as well.
So yes, So we were talking about fees before. We did do a freeze on trading service fee increase in the first half, you might recall. And that was something we talked about in the first half. We did increase in the second half, so at the start of the year. However, when you look at the percentages of increase, certainly sales growth is still high, but it was certainly aided by the increase And prices in that second half?
I think
Yes, I think I'd sort of like it's been interesting and I guess it's sort of like the buoyancy of the markets over the last couple of been sort of a little bit of a turnaround in the number of terminals out there that sort of noticeable change in trend. And the other thing is I think I had a slide up there in what we're doing in trying to get closer to customers And that sort of goes to the fact that these services were delivered through the terminals. And as you would know from where you work, It's less about terminals these days and more about direct feed sort of thing. And so I think the big change that's happening here is actually ASX has gone from having a sort of like So the secondary relationship with the customer there to a primary relationship with the customer and I think and I've talked about this at previous Communications around, it allows us a better understanding of what the customer is doing. So providing better products and understanding what they're looking for, But also understanding and even the customer understanding that do they have a license for what they're actually using the data for effectively or have they actually I factored that in.
So I think there's also a little bit of catch up in there as well.
Okay. And just wanted to circle back on an earlier question Just holding statement sort of mailing revenues, can you sort of give us a rough feel for What the contribution of that was within the issue of services line this period? And beyond Sort of 'twenty two, obviously, you said don't expect too much of a change this year, but I'm just wondering how quickly So that revenue in your eyes tells off sort of over the medium term?
I think one of the important things here, maybe just to sit back and think about is actually what that is. And sort of people sort of look at the service as sort of like an envelope, It's actually in a lot of ways, it's not. It's actually for retail people, it is an independent almost like custodian or safekeeping like service that actually you're providing to them such that they know what they're being told by their broker is correct. It's sort of it's effectively the source of truth. So I think what we're thinking about is really it's not so much about The physical delivery piece, which is the letter, it's about the service that's involved there, which is actually a very valuable service around Actually being able to be assured if you're a retail shareholder actually that you get a CHIS holding statement because you can prove that what you think you own, that you do own and you get that from an independent source.
So I think we think about that in the future as to how the pricing of the arrangement looks.
Right. And just a final question, Jill, just on sort of the D and A change sort of coming down the pipe Around DLP from 'twenty three, can you give us sort of a feeling for sort of what period you're looking to amortize that over and how we should start thinking about the potential quantum of the step up?
Yes, sure. So certainly, we look at a 10 year amortization timeframe. So that will really hit coming into the 2024 Period, obviously, because there will only be a certain amount of months in the year 'twenty three. And as I said before, I think you can back solve out of that Sort of long range expense profile that I've given you pre FY 2018, and hopefully that will help.
All right. Thank you.
Sorry, I can also add, because we all very much Focus on shares. But as Dom has already explained, we do have a slew of other projects. We might have 10 to 15 going at any time. So they're being run, but also old systems are still popping off. So as much as we'll obviously have a 10 year Or a 1 year of the 10 year impact in that 1st year, other systems will come off too.
So there is a dynamic That underplays. It's not the full amount that will be coming through. Now I think I've just complicated that for you. So I would still go with that long run expense line. I think that's the best way to run it.
Thanks.
Thank you. Your next question comes from Nigel Peoria with Citi. Please go ahead.
Good morning, Dom. Good morning, Jill. Just, Tom, you've given sort of a bit more detail about things like DLT Solutions, market data reporting, Electricity derivatives, etcetera, but still what's sort of pretty unclear is sort of the quantum that these things are likely to contribute to revenue and when. Is there any more color that you can give on that at this stage?
Yes, thanks, Nigel. I think with the DLT I think with these things, certainly with DLT Solutions, there's some examples there. But I think it's as I we might have this conversation even sort of 6 months to a year ago, Nigel, on this call that Yes, I think these things are going to take time because there's just so much focus on chess over the next short while. The interesting one from what you said, I think is electricity has been that's an interesting space, firstly. Secondly, it's been growing quite strongly.
And I'll take that on notice that like it's starting to become not insignificant sort of line in the P and L. As far as the market data thing you talk about, I guess that's just parts of improving our service Improving how we're interacting with customers and that process of being much more on top of exactly what Customers are using and even them knowing what they're using and what they should and shouldn't be licensed for, that is actually going to yield Over a couple of years, probably not insignificant revenue for that area. But As far as breaking down into all of those little pieces, that's I don't know, Jill, I think we I don't think we're going to sort of like break out all those bits and pieces. We've already sort of got sort of the 10 areas, whether We actually changed that, I'm not sure.
I'm sorry, I missed that. I thought that was about our investments.
No, I think we're talking about Nigel. We're talking about the expenses sorry, the revenues out of things like electricity, DLT solutions, market Data, those sort of things. And just like and I think Nigel makes a good point that there are a bunch of things happening. I think the more sort of like Things like simply DLT Solutions, they're more out into the future. Market data is your point is happening now.
Electricity is happening now. And The only other point I made, Jill, sorry if you missed it on the call, was that electricity having grown 40 odd percent this year, 30% Last year is actually that's becoming a not insignificant line. So I take the point.
Sorry, I sounded sloppy there. I just couldn't hear the last bit. If I go through the range of them, we're waiting for that moment to pop when it becomes material Because we have to line it up against our other revenue items as well. And certainly, our commodities business, I mean, it's quite a strong Piece of the portfolio now. So there will be a moment when we are able to disclose, right?
Not right now, but certainly we're very happy The volume that's coming through and the acumen that we've actually got on the team right now, so that's a real green shoot for us. It's not a green shoot, it's there now. For the other ones, it's interesting. DataSphere was certainly making money now on we actually have commercial we're definitely commercializing the data. We have customers, but to Dom's point, it's just not material enough to talk to.
But we're pleased with that. Actually, it's really interesting. What we've built in DataSphere is actually helping even more so internal requirements to gather our data for other stakeholders' interest. It's actually turned out to be twofold, just a really good thing to do. As it becomes material, we'll be able to talk about it.
DLT initiatives, you've seen that last slide of Dom's. Once again, really happy about the fact that we've got these Very notable parties working with us. 1 in particular, you'll see their investment in grow this year, and that's So we're going to be using and helping being helped with that DLT technology. But once again, that is a new thing that's just come on. So I think, Nigel, as much as once again we can't tell you what that revenue outlook is, we certainly can see the activity and we've got some very sound names attached Those investments.
So hopefully, that answers it, Nigel.
Yes. If I can just maybe just delve just on a couple of things.
Just on, I mean, electricity derivatives,
you say it's starting to become Distributors, you say it's starting to become important. I mean, against the sort of re sort of once the interest rate Situation normalizes and sort of interest rate futures go back to normal. Do you still think it will be material in that context?
Yes. Well, you can look at it that way. What you're saying is a material in the portfolio, true, but also from a derisko display perspective, it could become larger than some other things that we've Directly talked about. So if we look at our equity options and things like that. So I think that's more the play, Nigel.
Okay. And is there much revenue for you from the sort of things that are happening in the dam or sand pit? There seems to be quite a lot of interesting things happening, but I'm just not clear whether that gives you much of a revenue boost.
In which things? I missed it, sorry, on the call.
Sorry, the Daimler sandpit, so all those sort of things that Broadridge are doing
in July?
Yes. I think so. I think when they come to because a lot of that is actually bringing people in and it's sort of like open source software sort of thing. And so that actually It gets people, get ideas running. The example with KPMG, example with Grow, example with some of the other ones that are listed there.
Then I think what happens is if you want to actually roll that out into sort of an enterprise production thing, you'll then want a full license And actually then you go to that stage and you want conductivity, you want hosting and those things that's where that comes in. So at a sort of like A build stage or a POX stage going to a build stage and all that, not so much, but going to the next After those things come online, that's when revenues will come from that. And I think it's a sort of it's also that The ecosystem and actually just having and I think one of the great benefits of the ILC ecosystem is it brings a whole of people together, then they can do more. And it would be great to actually For the DLT to actually encourage more perhaps fund managers, super funds, Other people who perhaps aren't in our data center or don't interact so much directly with ASX to actually have a more direct interaction because then they can interact with everyone else sort of thing. Because I think this is all about sort of the collaborative technology of what these things are.
The ALC is like a physical piece of collaborative technology. DLT is more a sort of like a virtual collaborative technology.
Okay. That's clear. Thank you. And then just maybe just delving into a slightly more detailed thing. Just on the True balance is, I mean, we've talked about this before too, but I mean, have you got any more insight into what's driving the size of those at the moment?
I think Nigel, it's sort of obviously, it's a reflection of volatility and there's actually a lot going on in this space and it's sort of almost Driven globally around what is the right levels for margins. And a lot of it comes from the fact that if you go back to March 'twenty sort of margins globally, not just ASX and in fact Probably more and other exchanges went up very quickly and there's a prosificality argument to that and as to where they can come back down to. So I would say the interesting point I think in the long term is that I think that margins probably are going to have and this is sort of like a global initiative probably going to have higher floors on them as we go into the future. If that's helpful too.
Okay. Yes, that's good. Okay, thank you. Thank you for that.
Thanks, Nigel.
Thank you. Your next question comes from Ashley Dalziel with Goldman Sachs. Please go ahead.
Thanks. Good morning. I just wanted to pick up on a couple of pieces of the Expense outlook, you seem to be suggesting reasonably kind of steady expense growth around where you've guided at 'twenty two Kind of beyond 'twenty two. I just want to sort of square that up with when we do see that D and A step up in FY 'twenty four, What you're saying on total expense growth seems to sort of suggest you need to keep your core OpEx growth At very low levels, at least in that 24 year kind of sub inflation almost. So I just wanted to confirm that my take on all of that is correct.
Jill, do
you want to?
Yes. I wouldn't say very low levels. We have built up the foundation. So I mean, through this growth that we've had is, as you all of you know on the call over the last 3 years, that has made the base larger. So you look at this moment in time, looking at our initiatives that we're progressing with And looking at the DNA that will come through when Chesco is live, I think we feel that, that range is suitable Also from a shareholder perspective as well.
So that would be my answer.
Okay. Thank you.
Maybe I'll add to it sorry, maybe I'll also add to it. Remember, over the last 3 years, our largest cost base are people. And so with that coming off, and that was really that was why there was such a dramatic increase in expense. So with that now trailing off, we now got that in City Space. It really does help that outer year growth rate.
That's probably a better way to say it.
Okay. Thank you, Matt. Second question, just around information and tech services. You're usually good enough to give us a bit of a 1 year forward view as to sort of where you see revenue growth for those businesses. I mean, think in 'twenty one, you had expected a level of normalization, and we've seen that for at least 1 of the 2.
But how are you sort of budgeting for revenue growth in those two areas?
I don't think we'll share with you our budget. However, I think certainly, I think we sort of gave it a heads up that it would normalize, It has, but through ups and downs through that portfolio. But I think it would be coming back to that More normalized level, which I think we've said in the past about 3 to 5. And I
think I'll just add to that This year, with tech services, I mean, it's also another sort of maybe secondary effect of The less trading means less participant perhaps less participation in all markets, perhaps a few less gateways, A few years less need for technical services around that. So again, like with all of these things, I see this is being washed through in the next sort of like year or 2 But hopefully, they can sort of come back to where they were. So tech services this year was a little bit actually affected in a negative sense from what its usual run rate is as opposed to the data business was probably the other way around.
And I think I mean, I'll just raise the obvious point. That's where we can obviously Put on new rates each year unlike the rest of the business. So that certainly helps that.
Thanks.
Thank you. Your next question comes from Simon Fitzgerald ENP. Please go ahead.
Hi, there. Thank you for taking my questions. Just the first one, as you do approach the chest replacement, I was just curious to know whether you had any sort of thoughts about what the pricing architecture might look like and how different it might be from the sort of regular chess Outcomes at the moment and whether some of these efficiency gains might be passed on the participants?
Probably as far as pricing architecture, I think we have put out connectivity pricing to the market. So maybe that's something better as far as taken offline. There's also some benefits for the market there in the fact that Those fees have been waived in the 1st couple of years to actually get people help people sort of like get over to using that if they want to use that service.
Okay. That's good. That's the only question I'll have for you. Thank you very much.
Thank you.
There are no further questions at this time. I'll now hand back to Mr. Stephens.
Thank you very much. So I think we're sort of up at 12 o'clock, so good time to finish. Thanks everyone for joining us this morning and good luck and speak to you all soon. Thank you.