computershare's profit falls 15%, page-3

Yes going well today,and this is the reason

Robert Gottliebsen



Computershare stock rose today despite the big fall in the overall market, and for good reason. CEO Stuart Crosby is forecasting that the company will earn a steady 2008-09 profit in US dollars, but using a 65.5 cent Australian dollar means Computershare will earn about 76 Australian cents for the 2008-09 financial year – up substantially on last year. At the same time, Crosby and executive chairman Chris Morris have tapped a whole new growth industry for the remarkable global network that Computershare created.

Computershare calculates its management accounts in US dollars and then reports its results in the same currency. But Australians buy Computershare stock in Australian dollars, so when it comes to any figures related to earnings per share Australian dollars is the correct measurement currency.

In management terms, the US dollar is a better measure and the slump in stock markets has affected the earnings of most of Computershare’s conventional activities. Compared to the December 2007 half year, therefore, share registry services, corporate actions, shareholder relations management, and employee share plans are all down between five and 10 per cent in US dollars, while fund services show a decline of 13 per cent.

But the moderate profit falls in those areas have been offset by an 88 per cent rise in “communication services”. Crosby and Morris are basking in the email communication revolution between companies and their shareholders and Comptershare has extended that base into a vast array of other electronic communications. The acquisition of QM Technologies to enhance penetration was a winner. The communication services business has gone from a small operation to the group’s third largest division.

Meanwhile, Crosby and Morris have not forgotten the Comptershare lessons of the past. Companies that are in a strong financial position need to use that advantage to go further ahead of competitors. Computershare is really a technology company and must keep investing in technology to maintain its advantage. Every half year Computershare increases its investment in technology and in the 2008 December half year it totalled $82.7 million – a rise of one third on the December 2006 half year.

Computershare shareholders are benefiting from the fact that a successful global business is a wonderful hedge against the Australian dollar.