Depressed market his Computershare profit
Depressed corporate activities in key markets have dragged the half-year profit of Computershare down by 15.2 per cent over the same period last year.
The Melbourne-based provider of share registry and management business posted a net profit of $94.8 million in the six months to December 31. The results were largely in line with analysts' expectations.
"We have witnessed a recent up-tick in equity markets as reflected in the higher index level across the globe," said Stuart Crosby, Computershare's chief executive.
"However, we are yet to see a demonstrable improvement in corporate actions globally."
The company maintained an interim dividend of 14 cents per share but the franking credit was down from 60 per cent to 20 per cent.
Analysts from Deutsche Bank said that despite Computershare meeting its management net profit after tax, the forecast and underlying revenues trends were soft.
"Revenues of $988 million were down per cent versus Deutsche's (forecast) with weakness evident in registry and stakeholders management, " said Kieren Chidgey and Shreyas Patel of Deutsche Bank in a research note to clients.
They questioned the sustainability of margin income, which made up a big part of Computershare's profit.
Margin income represented 50 per cent of management's earnings before interest, tax, depreciation and amortisation compared with 45 per cent in financial year 2012 and 35 per cent in financial year 2011, they said.
Computershare holds $16.7 billion worth of clients' money on any given day and margin income from the temporary holding is an important revenue earner for the company.
Mr Crosby said the key part of the company's focus for the past year had been the integration of newly acquired businesses both in the US and Australia, which included Shareowner Services – its biggest acquisition to date. .