The Link Administration Holdings Ltd (ASX: LNK) share price is tumbling today after the company handed in its full-year results. In early afternoon trade, Link shares are down more than 8%.
What did Link report?
Link Administration delivered another messy result following the loss of a number of contracts in 2019.
Revenue finished down 3.1% to $1.23 billion, with a 42% contribution from Europe and the Non-Performing Loans business.
Recurring revenue fell just 1% as management was able to extend the company’s contract with HESTA, boding well for other major administration contract wins from the industry super sector.
Link was able to create technology to support unexpected early super release payments in just four weeks and processed $16 billion in payments thus far. It also supported 147 ASX-listed capital raisings totalling $17.8 billion in new equity.
Despite this, operating earnings fell 17% to $294 million and net profit to $114 million due to an impairment related to the Corporate Markets division. This resulted in a lower than expected dividend, 3.5 cents per share, as the company seeks to avoid a discounted capital raising.
The PEXA property settlement platform was the biggest highlight, with transaction volumes increasing 37% and 75% of all Australian property transactions occurring online.
This supported revenue growth of 50% to $156 million and a tenfold increase in operating profit to $53 million; a trend not expected to slow anytime with millions restricted from travel for the foreseeable future.
My take: Messy result, dividend disappoints but PEXA remains a key growth engine.