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Highlights

  • For 1HFY23, CPU reported a net profit of AUD 177.1 million on revenues of AUD 1,504.9 million.
  • In 1HFY23, the company delivered well on three key financial metrics--net margin, EBITDA margin and ROE.
  • Its ROE grew from 4.5% in 1HFY21 to 8.30% in 1HFY23.

ASX-listed company Computershare Limited (ASX: CPU), founded in 1978 and renowned for its high-integrity data management, has been consistently witnessing return on equity (ROE) growth and margin expansion. Recent acquisitions of the company have helped post revenue as well as net profit growth.

For the six months ended 31 December 2022, the share registry company with over 14,000 employees worldwide, reported a net profit of AUD 177.1 million on revenues of AUD 1,504.9 million. While its revenue jumped by 30.1% over the previous corresponding period, its net profit surged by 92.3%.

CPU's revenue growth in 1HFY23 was driven by the acquisition of Computershare Corporate Trust (CCT) and higher margin income as market interest rates increased during 1HFY23.

In 1HFY23, the company delivered well on three key financial metrics--net margin, EBITDA margin and ROE. All these three metrics witnessed growth, as shown in CPU's historical financials below. While its ROE grew from 4.5% in 1HFY21 to 8.30% in 1HFY23, its net margin expanded from 6.6% to 11.8% in the same time frame.

Also, the company is optimistic about its performance in the second half of the current fiscal as it is witnessing continuous growth in governance services and Employee Plans. CPU has reaffirmed its earnings guidance, with management earnings per share (EPS) expected to rise by around 90% in FY23 and margin income expected to be around USD 800mn in FY23 and nearly USD 860 million in FY24.

Meanwhile, the company expects to make USD 40-50 million gross savings over the next four years through its ongoing stage 4 cost out programme. One of its key focus is to grow recurring fee revenue.    

CPU Stock Price Performance

CPU shares closed nearly flat at AUD 22.340 on Friday, 26 May 2023. In the last one month, the technology stock has fallen by 1.15% and on a YTD basis, it is down 14.73%. On 24 March 2023, the stock hit a 52-week low of AUD 20.270, and its 52-week high of 28.340 was seen on 10 November 2022.

CPU Daily Technical Chart, Image Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, is 26 May 2023. The reference data in this report has been partly sourced from REFINITIV.