ETRADE Australia Limited
75% UNAUDITED CORE EBITDA INCREASE IN DECEMBER HALF
Completes HSBC Stockbroking Customer Migration
Sydney, 11 January 2007: ETRADE Australia Limited – ASX Code:ETR (E*TRADE) today announced based upon
unaudited management accounts to 31 December 2006, it anticipates its half-year earnings before interest, depreciation,
amortisation, non-recurring costs and taxation (“Core EBITDA”) should improve by at least 75% over the $7.88 million
recorded in the previous corresponding period.
This should translate into an unaudited increase of between 15% and 20% in net profit before tax, after deducting nonrecurring
costs incurred in the first half.
Online financial services revenue of $39.1 million in the first 6 months is up 67.8% from $23.3million for the same period
last year.
In the 6 months to 31 December 2006, the HSBC acquisition has performed in line with expectations, compared with the
estimated $6 million annualised EBITDA (including synergies and before integration costs and excluding directshares
earnings), previously announced.
“This acquisition is proving an excellent fit for E*TRADE. It has clearly cemented our position as the second largest online
broker in Australia. Since 30 June 2006, E*TRADE’s account numbers have increased by 42.5% and now exceed 350,000,
with assets under administration in excess of $19 billion,” said E*TRADE Chairman, Kerry Roxburgh.
Effective 1 July 2006, E*TRADE acquired HSBC Stockbroking (Australia) Pty Limited (HSBC Stockbroking) from HSBC
Bank Australia (HSBC).
HSBC Stockbroking provided online broking services (equities, warrants, and options) to approximately 40,000 HSBC
retail customer accounts and to 32,000 St.George Bank customer accounts under a white-labelled service that operates as
directshares. All these accounts are now serviced on the E*TRADE platform.
The integration process produced some minor anomalies requiring resolution with HSBC, St George and the relevant
account holders. All issues have been identified and are being resolved, at no financial loss to any customer and without
significant financial impact on E*TRADE.
In conjunction with this acquisition, E*TRADE and HSBC entered into a strategic alliance for the referral of HSBC retail
customers to E*TRADE for online share trading for a minimum term of five years.
Subsequently, E*TRADE and St.George finalised a wholesale online stockbroking arrangement for directshares.
E*TRADE’s Chairman, Kerry Roxburgh said, “The company is pleased with this strong first half financial performance.”
“With some minor exceptions, work on migration and integration of HSBC Stockbroking onto the E*TRADE online
platform is complete. We are delighted with the account retention rate and that HSBC Stockbroking is performing ahead of
our expectations. Throughout the account migration process we have kept our customers, HSBC, St George, the ASX and
ASIC informed of relevant issues,” said Mr Roxburgh.
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For more information, please contact:
Brett Spork, Chief Executive Officer, E*TRADE on 02 9253 5450 or 0409 409 494
Kerry Roxburgh, Chairman, E*TRADE on 0419 322 719
About E*TRADE Australia (
www.etrade.com.au)
