Computershare first-half revenue lifts 4%, full-year guidance increased
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The news: Financial administration company Computershare reported a 3.9% increase in first-half revenue year on year to $1.6 billion as falling interest rates created a low yield environment that the company said it has a natural hedge against.
The numbers: First-half revenue was ahead of the expected $1.5 billion, according to Visible Alpha.
Net profit meanwhile fell 2.6% in the first-half to $280.4 million, below the average forecasts of net income of $316.1 million, according to Visible Alpha.
First half management earnings per share came in at 67.9 cents per share, up 3.9% on the previous corresponding period and ahead of the expected 67.12 cents.
The company also lifted its full-year guidance for management earnings per share to $1.44, up from the previously expected $1.40 guided in August 2025. This would reflect a 6% increase year on year.
The company declared an interim dividend of 55 cents per share, up 22.2% compared to a year earlier, and ahead of consensus estimates for 34 cents per share. The record date is 18 February and the dividend will be paid out on 18 March.
The context: Computershare CEO Stuart Irving said the company flagged that the company's "natural interest rate hedge" has enabled it to generate higher revenue despite being in a low yield environment.
Irving highlighted that "interest rates fell sharply in the period, with the average US cash rates down almost 17%" compared to the previous comparable period. "The reduction in rates stimulated increased business activity levels and higher client balances," he said.
The increase to the interim dividend was done because a share buy-back was deemed tax inefficient.
What they said: "Our three business lines continue to strengthen their competitive positions, widen their moats and deploy new technologies to enhance customer value and efficiencies," Irving said.
"With new business wins, client paid fees were up around 5%. These are recurring and make up the majority of our revenues."
The source: ASX
