Corporate: The ASX just asked the NSX if it has enough cash flow to continue

In the aftermath of quarterly season it’s normal for the ASX to question companies about their cash flows — but this week it grilled its fellow exchange, the NSX.

The National Stock Exchange (ASX:NSX) is a listed company in its own right. Business development manager Andrew Musgrave told Stockhead last year it does not want to be a challenger to the ASX, just an alternative.

But the ASX wasn’t sure if it had enough money. It noted the NSX estimated cash outflows of $1.m next quarter.

While the NSX had $3.3m in the bank, ASX adviser Melissa Lim noted,”it is possible to conclude that if NSX were to continue to expend cash at the rate indicated by the Appendix 4C, NSX may not have sufficient cash to continue funding its operations.”

The NSX said it expected negative cash flows to continue as it expanded. It also blamed the timing of extra payments for its larger than typical figure.

But the NSX also said it was pursuing a capital raise at present and reminded the ASX it received the bulk of its customer receipts annually in the September quarter.

“The NSX believes that it will have the required support of investors as part of its current capital raising activities which will enable NSX to carry on its operations,” it said.

NSX shares were unchanged this morning at 12c.

In other ASX corporate news today:

Wellness and Beauty Solutions (ASX:WNB) revealed a major distributor contract would wrap up 10 months early. The True Solutions business, which included this contract with anti-aging skin peptide HydroPeptide, was expected to provide $6m in annualised revenue — 30 per cent of which was to come from HydroPeptide. Wellness and Beauty Solutions said it was disappointed but well positioned to marginalise the cash flow impact on the company.

Furniture retailer Nick Scali (ASX:NCK) witnessed a tough retail environment but still managed to make a half-yearly profit of $21.6m — albeit 15 per cent lower than the prior corresponding period. The company declined to give guidance as to the profitability for the full year, noting consumer confidence remained weak.

Frontier Digital Ventures (ASX:FDV) climbed 13 per cent this morning after announcing it had completed the $US4.8m ($7m) sale of Propzy. The company owns various classified sites in Asia and Latin America, and this one was a property-focused site in Vietnam. It booked a 300 per cent return on its initial $US1.2m investment.