Computershare Registers Share-price Tumble
The Age
Friday November 8, 2002
Computershare scrip toppled 16 per cent yesterday after the global share registry said first-half earnings would be about 25 per cent down on the previous year.
After the news was unveiled at the annual meeting, the stock fell, to finish 36 cents weaker at $1.94, on turnover of almost five million shares.
Managing director Chris Morris and chief financial officer Tom Honan said after the meeting that cost-cutting and an expected pick-up in market activity would produce a better second half.
They predicted full-year earnings would come in at roughly the same level as last year.
``The important thing to recognise is we expect to deliver the same (earnings before interest, tax, depreciation and amortisation) number in fiscal '03 as we did in fiscal '02 - so we see a significant recovery in the second half," Mr Honan said.
In the year to June 30, 2002, Computershare's EBITDA came in at $147.56 million, while net profit climbed 84 per cent to $71.29 million.
Mr Morris said he did not consider the news to be a profit warning because it was the first time the company had given any indication of the strength of full-year earnings. He blamed flat market conditions, low interest rates and a decline in corporate activity for the expected slug to earnings but said the results for October had been encouraging.
``The Dow (Jones Industrial Average) had a good month, they've cut (US) interest rates again . . . if the market's strong, then we get more dealing income out of employee share plans," Mr Morris said.
Shareholders raised few concerns at what some expected to be a hostile AGM, and all directors up for election or re-election were voted in.
The Australian Shareholders' Association opposed Sandy Murdoch's re-election as chairman due to his ``large workload" as chairman of four other companies. However, a majority voted that he retain the position.
The board said that as of the end of October, 8.7 million shares, or 1.58 per cent of the company's capital, had been acquired for $19.5 million in a continuing share buyback.
Mr Morris said the board remained committed to the buyback.
The company also announced it would deliver share registry services to Foster's Group, amid speculation it had undercut its main domestic rival, ASX Perpetual Registrars, by up to 50 per cent to win the deal.
``I've seen the speculation but I can assure you, we don't take on business at a loss," Mr Morris said. ``Obviously we feel that we probably have a lower operating cost than our competitors in every market because we have a much bigger base to build over."
© 2002 The Age