Computershare : 1H22 Half Year Report (Appendix 4D)

For personal use only

ASX HALF-YEAR REPORT

Computershare Limited

ABN 71 005 485 825

31 December 2021

Lodged with the ASX under Listing Rule 4.2A

This information should be read in conjunction with the 30 June 2021 Annual Report.

Contents

Results for Announcement to the Market (Appendix 4D item 2)	2
Half-yearreport (ASX Listing rule 4.2A1)	9
Supplementary Appendix 4D information (Appendix 4D items 3 to 8)	31
Corporate Directory	33

This half-year report covers the consolidated entity consisting of Computershare Limited and its controlled entities. The interim financial report is presented in United States dollars (unless otherwise stated).

For personal use only

COMPUTERSHARE LIMITED AND ITS CONTROLLED ENTITIES HALF-YEAR ENDED 31 DECEMBER 2021

(Previous corresponding period half-year ended 31 December 2020)

RESULTS FOR ANNOUNCEMENT TO THE MARKET

					$000
Revenue from ordinary activities	up	5.9%	to	1,157,187
(Appendix 4D item 2.1)
Profit/(loss) after tax attributable to members	up	26.9%	to	92,056
(Appendix 4D item 2.2)
Net profit/(loss) for the period attributable to members	up	26.9%	to	92,056
(Appendix 4D item 2.3)
Dividends	Amount per security	Franked amount per security
(Appendix 4D item 2.4)
Interim dividend	AU 24 cents			AU 9.6 cents
Final dividend (prior year)	AU 23 cents			AU 13.8 cents
Record date for determining entitlements to the interim dividend (Appendix 4D item 2.5)	16 February 2022
Explanation of Revenue (Appendix 4D item 2.6)

Total revenue for the half-year increased to $1,157.2 million (2020: $1,092.4 million). The Computershare Corporate Trust (CCT) acquisition which completed on 1 November contributed $76.7 million. Excluding the impact of the acquisition, underlying operating revenues reduced by $12 million. Margin Income excluding the impact of the CCT acquisition was slightly down by $0.8 million.

Key business unit movements are as follows:

• Issuer Services sales revenue was marginally down compared to the prior reporting period. Revenue growth in Registry Maintenance and Governance Services was largely offset by lower event based revenues. Hong Kong IPO and Corporate Actions activity was impacted by the current market and regulatory environment in China, whilst a large mutual funds proxy solicitation event in US stakeholder relationship management in 1H21 did not repeat in 1H22.
• Employee Share Plans revenues increased reflecting higher transactional volumes (mainly in the EMEA region) and higher core client fees as a result of new business wins.
• Business Services experienced significantly lower levels of bankruptcy activity in 1H22 relative to 1H21. Class Actions was also down, impacted by the number and size of case wins versus the prior periods. The legacy Corporate Trust business was slightly favourable year on year.
• Mortgage Services & Property Rental Services revenues were slightly lower. In the UK, lower client project activity and finalisation of the UKAR fixed fee in 1H21 was largely offset by higher margin income in the UK Deposit Protection Service business. In the US, lower servicing fees resulted from a smaller portfolio containing a higher proportion of sub-servicing clients. This was partially offset by volume growth in fulfillment, stronger recovery collection activity and gains resulting from capital recycling mortgage servicing rights (MSR) transactions.

A stronger British pound, Canadian dollar and Australian dollar relative to the prior period increased the equivalent USD revenue contribution from those regions.

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COMPUTERSHARE LIMITED AND ITS CONTROLLED ENTITIES HALF-YEAR ENDED 31 DECEMBER 2021

(Previous corresponding period half-year ended 31 December 2020)

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Explanation of Profit/(loss) from ordinary activities after tax (Appendix 4D item 2.6)

Net statutory profit after tax attributable to members was $92.1 million, an increase of 26.9% over the corresponding period. Revenue was higher than the prior period due to growth in Employee Share Plans and additional revenue attributable to the Computershare Corporate Trust acquisition, offset largely by lower earnings from corporate actions, class actions, bankruptcy and stakeholder relationship management. The Group benefited in the current half from the disposal of the Group's investment in Milestone Group Pty Ltd, recorded as other income.

Total expenses were up $47.7 million, principally due to the two-month impact of the Computershare Corporate Trust acquisition which increased the overall cost base by $94 million in the half (this includes integration and acquisition related expenses). The underlying reduction in expenses is driven by a lower cost of sales due to the mix of sales between periods and benefits from the cost out programme, principally UK Mortgage Services. There was also a decrease in costs associated with major restructuring programmes. 1H21 costs were materially impacted by a significant doubtful receivable in class actions.

The Group's effective tax rate was slightly favourable to the prior period due to the positive impact of changes in tax rates and laws and due to profit mix with proportionately more profits arising in countries with lower tax rates.

Explanation of Net Profit/(loss) (Appendix 4D item 2.6)

Please refer above.

Explanation of Dividends (Appendix 4D item 2.6)

The Company has announced an interim dividend for the current financial year of AU 24 cents per share. This dividend is franked to 40%.

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COMPUTERSHARE LIMITED AND ITS CONTROLLED ENTITIES

INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 December 2021

Contents
Directors' report	5
Auditor's independence declaration	8
Consolidated statement of profit or loss and other comprehensive income	9
Consolidated statement of financial position	10
Consolidated statement of changes in equity	11
Consolidated cash flow statement	12
Notes to the consolidated financial statements	13
Directors' declaration	27
Statement to the Board of Directors	28
Independent auditor's review report to the members	29

This interim financial report does not include all the notes of the type normally included in the annual financial statements. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2021 and any public announcements made by Computershare Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the Australian Securities Exchange Listing Rules.

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COMPUTERSHARE LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS' REPORT

The Board of Directors of Computershare Limited (the Company) present their report in respect of the financial half-year ended 31 December 2021.

DIRECTORS

The names of the directors of the Company in office during the whole of the half-year and up to the date of this report, unless otherwise indicated, are:

Non-executive

Simon David Jones (Chairman)

Abigail Pip Cleland

Tiffany Lee Fuller

Lisa Mary Gay

Christopher John Morris (resigned effective 11 November 2021)

John Nendick (appointed effective 21 September 2021)

Paul Joseph Reynolds

Joseph Mark Velli

Executive

Stuart James Irving (President and Chief Executive Officer)

PRINCIPAL ACTIVITIES

The principal activities of the consolidated entity during the course of the half-year were the operation of Issuer Services, Employee Share Plans & Voucher Services, Communication Services, Mortgage Services & Property Rental Services, Business Services, Computershare Corporate Trust and Technology Services.

• The Issuer Services operations comprise register maintenance, corporate actions, stakeholder relationship management and corporate governance and related services.
• The Employee Share Plans & Voucher Services operations comprise the provision of administration and related services for employee share and option plans, together with Childcare Voucher administration in the UK.
• The Mortgage Services & Property Rental Services operations comprise mortgage servicing and related activities, together with tenancy deposit protection services in the UK.
• The Communication Services and Utilities operations comprise document composition and printing, intelligent mailing, inbound process automation, scanning and electronic delivery.
• The Business Services operations comprise the provision of bankruptcy and class actions administration services and the legacy corporate trust operations in Canada and the US.
• The Computershare Corporate Trust operations comprises trust and agency services in connection with the administration of debt securities in the US.
• Technology Services includes the provision of software specialising in share registry and financial services.

Computershare has a range of regulated businesses around the world, including transfer agencies, licensed dealers, corporate trusts and mortgage servicers.

REVIEW OF OPERATIONS

The Group recorded a profit before tax of $131.4 million for the half-year ended 31 December 2021 (2020: $104.3 million). Total revenue increased to $1,157.2 million (2020: $1,092.4 million) and expenses were up by $47.7 million. The group benefited favourably from the Computershare Corporate Trust (CCT) acquisition, which generated Management EBIT of $9.1 million.

Margin income was up $6.6m, of which $7.4m related to CCT. Underlying margin income was $0.8m unfavorable, largely in line with prior period.

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