NEWS/E`Trade AU. v. 15.02.2000 - Strong buy!!! - 500 Beiträge pro Seite

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The Age / MEDIA

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E*Trade shares surge as interim loss unveiled

By JANE SCHULZE
Tuesday 15 February 2000

Shares in the online broking business E*Trade jumped 12.9per cent yesterday to $3.50 after the company announced an interim loss before abnormal items of $6.1million.

However, the loss swelled to $48.2million after the company accounted for shares issued to ANZ during the half worth $42.1million as an abnormal item.

The companies formed an online share trading and information alliance in June in which ANZ gained 10 per cent of E*Trade.

E*Trade recorded operating revenues of $7.4million in the six months to December, up 90 per cent on the previous six months.

It said its gross revenue in January was 30 per cent above that in December, giving it annualised gross revenue of more than $25million. The company also said that in the three months to 31January it produced an operating profit of more than $500,000 before marketing expenses.

The company`s chief executive, Mr Kerry Roxburgh, said E*Trade expected to break even by June.

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Aus Syndney Morning Heraldyv. 15.02.2000
- BIZ.COM



Etrade soars 57c after loss
By MORGAN MELLISH

Online broker Etrade hopes to break even by the middle of the year after yesterday announcing a $48.3 million first-half loss.

The company`s revenue - the number many investors look at in the Internet sector - rose 90 per cent to $7.4 million, up from $3.9 million in the previous period.

Investors were impressed by the revenue jump, pushing the shares up 57c to $3.67 before they eased back to close up 40c, or 12 per cent, at $3.50.

Etrade peaked at $11.55 last April.

The company`s loss for the six months to December 31 - which compares with a loss of $3.2 million previously - was mostly caused by a $42.2 million non-cash abnormal loss relating to the 10 per cent placement made to ANZ last August.

The bank paid no money for the 6 million shares but instead promised to market Etrade to its customers.

The loss before the abnormal was $6.1 million.

E-trade chief executive, Mr Kerry Roxburgh, said the company should break even by June.

"We are budgeting for revenue growth to continue strongly and as that happens marketing expenses will decline as a proportion of the overall revenue and cost base," Mr Roxburgh said.

"Etrade is in a very strong financial position ... we expect the strong growth to continue."

Etrade - along with the rest of the online broking sector - is facing increased competition from new entrants such as National Australia Bank and US broker Charles Schwab, which has partnered Mr Kerry Packer`s existing broker, ShareTrade.

Some industry observers expect the proliferation of online brokers will lead to a shake-out but Etrade general manager marketing, Mr Bill Wileman, said he was confident there was not going to be a debilitating price war.


"We knew all the banks would enter the industry and we also knew Schwab would come," Mr Wileman said.

"Long term, there`s still room for rates to go down but I don`t think there will be a big shake-out.

"Most of the promotional efforts are now focused on other things such as features and benefits that are unique to them."


Online broking is still growing fast with about 15 per cent of share trades now being done online. This is forecast to jump to 30 per cent over the next three years.

On January 4, Etrade had 34,000 customers. It will release its latest customer figures within the next few weeks.


Among its competitors, HSBC InvestDirect has about 17,000 customers, more than half of which trade online. TD Waterhouse (formerly Green Line) has about 70,000 customers, about 18,000 of whom trade online, while market leader, Commonwealth Securities, has about 105,000 online customers out of its total clientele of 425,000.


Etrade also announced that Ms Judy Balint, who represented US based Etrade Group, has resigned from the board. Ms Balint has been replaced by Mr Jarrett Lilien, deputy chief international officer of international operations of Etrade Group Inc.

Etrade holds the licence to use the US system in Australia