Insights

Computershare (ASX:CPU) share price on watch after better than expected half year result

The Computershare Ltd (ASX:CPU) share price will be on watch today after releasing a better than expected half year result…
The post Computershare (ASX:CPU) share price on watch after better than expected half year result appeared first on The Motley Fool Australia. –

Young woman in yellow striped top with laptop raises arm in victory

The Computershare Ltd (ASX: CPU) share price will be on watch today following the after-hours release of its half year results on Tuesday.

How did Computershare perform in the first half?

Computershare had a very difficult six months due to the impact that record low interest rates had on its margin income.

For the six months ended 31 December, the company reported a 3.2% decline in management revenue to $1.1 billion and a 52.4% tumble in margin income to $55.2 million.

This ultimately led to the company’s management net profit after tax falling 25% to $117.8 million and its earnings per share falling 24.8% to 21.8 cents per share.

Despite this sizeable decline in earnings, the Computershare board has maintained its fully franked interim dividend at 23 cents per share.

How does this compare to expectations?

Although this was a weak result in comparison to the prior corresponding period, it was actually ahead of management’s guidance. This bodes well for the Computershare share price today.

It was also ahead of what analysts at Morgans were expecting. They were forecasting a 33% decline in management net profit after tax to $106 million. The broker also pencilled in a 15 cents per share dividend.

Outlook

The company is expecting a stronger second half performance, with management earnings per share forecast to come in at 30 cents for the half.

This is expected to lead to full year management earnings per share of 51.8 cents in constant currency, which will be down 8% year on year.

Computershare’s CEO, Stuart Irving, commented: “I am pleased to report Computershare’s operating business is performing ahead of plan. Although record low interest rates have impacted margin income, earnings for the half are ahead of guidance. Our operating performance supports a positive 2H outlook.”

“The 1H operating performance supports upgrading full-year earnings guidance. We now expect EBIT (excluding margin income) to be up around 14% for FY21 (previous guidance was around 10%). Management EPS is expected to be down around 8% (previously down around 11%) with margin income revenues expected to be approximately $105m this year,” he added.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Computershare (ASX:CPU) share price on watch after better than expected half year result appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!