Computershare Reports Decrease in Net Profit but Projects Earnings Growth in 2022
Stuart Condie, a reporter for Bloomberg, highlights Computershare’s increased dividend and reaffirmed annual earnings outlook, despite a decrease in net profit.
Computershare, a global financial services company, has reported a decrease in net profit for the fiscal year, dropping from $177.05 million to $105.2 million. Despite this decline, the company’s management remains optimistic, projecting a 7.5% growth in earnings per share (EPS) over the full fiscal year, estimated to be around $1.16. This comes after a 6.7% increase in revenue, reaching $1.61 billion.
The higher interest rates, implemented by central banks to combat inflation, have positively impacted Computershare’s performance. As a result, the company has announced an increase in its dividend, boosting it from 30 Australian cents per share to 40 Australian cents per share compared to the previous year. Additionally, the company’s management earnings per share for the six months through December rose from $0.451 to $0.548, although analyst forecasts had expected the figure to be $0.57.
Margin income has also seen substantial growth for Computershare, contributing to the company’s positive outlook. Management expects a further 7.5% increase in EPS for the full fiscal year, projecting an approximately $1.16 figure. In particular, the second half of the fiscal year is expected to perform even better, with a projected EPS increase of 11% compared to the first half.
While net profit on a statutory basis experienced a 41% decline, reaching $105.2 million, it increased by 11% to $229.4 million on a continuing operations basis. Despite this discrepancy, Computershare’s revenue growth remained steady, with a reported 6.7% increase to $1.61 billion.
Overall, Computershare’s performance in the fiscal year has faced some challenges, resulting in a decrease in net profit. However, the company’s management remains confident in its ability to achieve earnings growth, prompted by higher interest rates and positive revenue growth.
Analyst comment
Positive news. The market is expected to experience growth in the coming year due to higher interest rates and positive revenue growth. Despite a decrease in net profit, Computershare’s management remains optimistic and projects a 7.5% growth in earnings per share. The increase in dividend and margin income further support a positive outlook.
