Ferret's Stock to Watch: COMPUTERSHARE LIMITED 07:49, Friday, 3 September 2004
A COMPANY DESCRIBED AS A CORPORATE ADOLESCENT ABOUT TO TAKE OFF
Sydney - Friday - September 3: (RWE) ***********************************
OVERVIEW ********
Computershare's stunning performance in the last financial year set analysts and journalist praising the the company to the skies.
Business commentator Alan Kohler went completely overboard about the company's virtues and prospects.
It's not always wise to go troppo over a company in this economic climate but there are good reasons for his conclusions.
He quoted Warren Buffett's belief that you don't come across many great companies in your lifetime, especially while they are still corporate adolescents about to take off.
A little over a year ago Computershare was in crisis when the company's share price slumped below $1.50 after profits fell sharply.
Today it seems to be a different ball game after no nonsense chief executive Chris Morris brought in top line company operator Tom Honan recruited from Nike to do a lot of restructuring.
Kohler suggests that Morris knows the business backwards and forwards but couldn't make money out of it but Honan could.
A more balanced belief is that both combined well to start generating real money.
Whatever happened, the result has been astonishing judging from the profit figures released by Computershare about two weeks ago.
The company reported growth in total revenues of 26 per cent to $894.7 million, in earnings per share (pre-goodwill) of 61 per cent to 19.02c and in net operating cash flows of 79 per cent to $136.1 million.
Normalised EBITDA rose 37 per cent to $183.4 million. Bottom line net profit rose 392 per cent to $79.9 million.
Directors say the results have delivered substantial improvement across all metrics within the business including earnings per share, revenues, cash generation and other balance sheet measures.
The positive results posted for the financial year reflect a continued improvement in market conditions, particularly in the Asia Pacific region, and a significantly improved profit from North America whose contribution to the company's EBITDA line has improved from 27 per cent in 2003 to 39 per cent in 2004.
CEO Mr Chris Morris said, "I am delighted that the prudent strategies we set in place enabled us to extract the full advantage of the upswing in the Asia/Pacific region.
"This combined with a significant improvement in profitability in North America, has enabled us to deliver value to our shareholders through the increase in earnings per share," Mr Morris declared.
SHARE PRICE MOVEMENTS *********************
Shares of Computershare rose 8c to $3.70 yesterday. It's not far off the rolling high for the year of $3.76 while has been $2.61. Dividend is 8c to yield a meagre 2.61 per cent. The company raised its final payout to 5c a share which is payable on September 24.
The company's shareholding is pretty much an open book.
Driving force Chris Morris holdings 10.19 per cent, private US investor General Atlantic 9.74, Schroder 7.44 per cent, Anthony Wales, one of the company's original executives 5.99 per cent and Penelope Maclagan just under 3 per cent.
According to some analysts they are holding a pretty hot stock.
Computershare has already spread worlwide and is pushing into the select multi national group that is found where business is big.
The company is already number one in the share registry business all countries except the US.
It has recently done an impressive deal in winning the News Corp contract which will add to its penetration into the US market.
Earlier this year Computershare acquired Georgeson Communications of the US, a proxy solicitation and shareholders management firm.
On Wednesday Computershare chief executive Morris stood up to take the Prime Minister's Landcare award in Canberra.
It produced the ingenious idea of of asking shareholders of listed companies to switch from paper to electrons,
Computershare and eTree are paying $2 a switch with the funds going to plant trees.
BACKGROUND **********
Computershare website claims to be the world's largest -- and only global -- share registry, and a leading provider of financial market services and technology to the global securities industry.
Experienced professionals, over 5,000 strong, operate on five continents, providing services and solutions to listed companies, investors, employees, exchanges and other financial institutions.
Together, Computershare manages more than 60 million shareholder accounts for over 7,000 corporations around the world.
Single-source services and solutions share registry management / transfer agency services employee share and option plans print and digital document services strategic investor relations and market intelligence cross border-listing solutions depositary instruments global share plans.
The company offers proven solutions designed and delivered by people in your core market; trusted experts who embrace your business goals as their own.
By combining extensive local knowledge with vast international expertise, the company believes it delivers efficient, cross-border capabilities with unparalleled service.
Experts at handling large global accounts, we've managed the full range of transactions and services for thousands of clients worldwide.
The advantage of this experience is evident in how customers' needs are managed on your terms, in your market, anywhere in the world.
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)