REPORTING SEASON: Computershare Limited (CPU)
Brought to you by CommSec
Figure 1: Computershare Limited 12 month chart
The world’s largest shareholder services company, Computershare (CPU) recorded a better than expected rise in half year profit to US$163.6m.
A rise in market activity and cost efficiencies in the tail-end of the calendar year were two drivers.
The Australian sharemarket surged by 12% over the first half while Dec was a record IPO period locally; both positives.
CPU earns close to 40% of its income in the U.S., however the surge in the greenback since stimulus tapering speculation began in May 2013 has been a negative for CPU’s revenue (earnings denominated in U.S. dollars).
Margins have improved helped by cost management programs and further synergies from its Shareowner Services purchase.
After 8 years leading CPU, President and CEO, Stuart Crosby is stepping down on 30 June 2014.
He will be succeeded by long term employee and current CIO, Stuart Irving. CPU has become a little more confident with its guidance; now expecting profit to grow by 5-10% on last year.
Going forward, signs of a more stable global and economic environment are likely to stimulate IPO and M&A activity.
A 20% franked interim dividend of $0.14/share was declared, payable to eligible shareholders on 18 March.
Investors pushed CPU shares higher following the result, taking gains since 1 January to around 1.5%.