Share registry company Computershare Ltd (ASX: CPU) released its FY21 results after the market closed yesterday. Here are the details.
Computershare is best known for its share registry services and employee share plans, but also provides mortgage services. It was founded in Melbourne in 1978 and has now become a global business with over 75 million customer records and 12,000 staff.
Digging into the numbers
On a statutory basis, Computershare reported total revenue of $2,334.1 million, up 2.3% on prior FY20.
However, statutory net profit after tax fell just shy of 19% to $189 million across the period. Management noted this was due to a decline in margin income resulting from record low global interest rates and the reduction in the UK Asset Resolution fixed fee.
If you exclude the impact of margin income and foreign exchange (FX) movements, management EBIT comes in at $339.1 million, a 13% increase on FY20.
Across the period, Computershare’s costs were higher, but management noted this was mainly due to integration expenses from Equatex as well as restructuring costs relating to the recently announced Wells Fargo acquisition.
A final dividend of 23 cents per share (60% franked) was declared and will be paid on 13 September 2021.
Looking forward, management is anticipating margin income of around $145 million which will lift management earnings per share (EPS) by around 2% on the pcp.
While the business continues to execute its growth strategy, management noted it expects reduced performance from cyclical and event-based businesses such as corporate actions, stakeholder relationship management, and bankruptcy.
If you strip out the impact of interest rates, it seems as if there’s some underlying growth there which is pleasing. That being said, I’d rather invest in companies which are less dependent on macro factors.
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