Computershare Limited (ASX: CPU) today released its first half-year results for FY19 to the market with revenue flat, but profit per share (EPS) up 15.5% to 35.37 cents in constant currency (USD) terms. It declared a dividend of 21 cents, franked at 30%. The market appeared to like the results, with the Computershare share price up as much as 6.4% in early trade to $18.98.
Computershare is best known for its share registry services and employee share plans, but also provides mortgage services.
Mortgage Services
Computershare’s mortgage services division which operates in the US and UK achieved revenue increases for the half, up 8.8% in constant currency terms from $265.1 million to $288.3 million. Earnings before interest, taxes, depreciation and amortisation (or EBITDA) was also up 5.7% from $56.4 million to US$59.6 million.
Employee Share Plans
Revenue for this division was up 11.2% from US$106.5 million to US$118.4 million in constant currency terms. However, EBITDA declined slightly, down 0.4% from $22.5 million to $22.4 million. However, the Equatex acquisition was a highlight for the division with $12.4 million revenue contributed since completion and expected to bring synergy benefits of $30 million in the next 33 months.
Register Maintenance and Corporate Actions
Computershare’s most profitable division delivered with revenue up 5.4% from $416 million to $438.6 million in constant currency terms. EBITDA was up 16%, from $139.6 million to $162 million.
Solid Results – Performing To Plan
“Computershare is performing to plan with Management EPS increasing by 15.5% in constant currency terms,” Computershare CEO Stuart Irving, stated.
“The improvement was primarily driven by ongoing profitable growth in Register Maintenance, margin income gains and a reduced tax rate. These results demonstrate the strength of Computershare’s business during a period of heightened market volatility and global uncertainty.”
Are Computershare Shares A Buy?
Computershare is a solidly run company that has handed down impressive results amidst volatile markets and looks set for more growth. However, it is not a stock I would look to add to my portfolio at the current price levels.
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