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We would like to invite you to our 2023 Annual General Meeting to be held at 10.00am on Wednesday, 15 November 2023.
We would like to invite you to our 2023 Annual General Meeting to be held at 10.00am on Wednesday, 15 November 2023 at our Yarra Falls office, 452 Johnston St Abbotsford VIC 3067.
The Annual General Meeting will be held on Wednesday, 15 November 2023 at 10.00am Melbourne time, both virtually and in person.
Attending virtually
To attend online and vote in real time at the meeting, you can visit meetnow.global/CPU2023 on your smartphone, tablet or computer.
Online registration will open 1 hour before the start of the meeting.
For further instructions on how to participate online, view the online meeting user guide.
Attending in person
To attend in person, come to Yarra Falls, 452 Johnston Street, Abbotsford, VIC 3067.
Dear Shareholder,
We would like to invite you to our 2023 Annual General Meeting to be held at 10.00 am (Melbourne time) on Wednesday, 15 November 2023.
I am delighted we are once again able to invite you to attend this year's AGM in person, at our global headquarters at Yarra Falls in Abbotsford, Victoria. We also understand that, for many of our shareholders, the ability to attend our AGM online is very welcomed and that option will continue to be available for all shareholders using Computershare's online meeting platform.
Notes: All figures in this presentation are presented in USD millions and in constant currency, unless otherwise stated.
1 Unfranked; Total dividend per share for FY23 is AUD 70 cps (FY22 AUD 54 cps);
2 Compared to FY22 final dividend per share of AUD 30.0 cents share (cps).
The resolutions to be considered at the AGM include the standard director re-elections, and this year Joe Velli and Abi Cleland are standing for re-election.
The resolutions also include the adoption of the remuneration report, which you can read from pages 43 to 64 of our Annual Report as well as a resolution to approve a proposed equity award grant to our Chief Executive Officer Stuart Irving under our long-term incentive plan.
Details of the resolutions are included in this Notice of Meeting. Your Board recommends that you vote in favour of all resolutions.
As my first year as Chair of your company comes to a close, I can reflect that Computershare has performed well in volatile market conditions with recovery in the second half of the year supporting record earnings. Across our integrated model, recurring revenues were resilient. While event and transaction fees were impacted by lower market activity levels, higher interest rates drove record margin income and group results.
Our people have performed exceptionally well, managing the complex integration of recent major acquisitions, adapting to the opportunities and threats from a volatile macro-environment and re-shaping the way we work for a post-pandemic world.
Management revenue was up 27% to over $3.3bn. This included record Margin Income of $792m for the Group, as interest rates continued to rise. However, the frequency of interest rate rises also created an uncertain macro business environment which caused higher input costs and slowed corporate activity resulting, for example, in lower average client balances due to subdued bond issuance. Pleasingly, customer fee revenue grew across all core business lines. Transaction and event-based revenues were impacted by the volatility of interest rates, but did improve in the second half, such that first half to second half growth in Management EBIT ex MI was 70%, as market conditions improved.
The company's risk management processes were stress-tested by the US banking crisis in March 2023 and, although we took a few learnings from the experience, the Board was pleased to note that management's response was swift and effective and that our pre-existing policies provided robust protection.
We made good progress in building a more balanced, stronger Computershare with a focus on higher quality earnings from our core businesses of Issuer Services, Employee Share Plans and Corporate Trust. The sale in May of Kurtzman Carson Consultants (KCC), the Bankruptcy and Class Actions business, simplified the portfolio. We were also pleased to announce on 3 October 2023 the sale of our US Mortgage Services business and we continue to work on strategic options for the UK Mortgage Services business. We believe the core Group portfolio of businesses is driving improvement in the consistency of our earnings. To help protect Computershare from potential future downward moves in interest rates, we have locked in $1.2bn of Margin Income through an active hedging program, the majority of which will be received over the next five years.
Our Environment, Social and Governance (ESG) measures are becoming more sophisticated, as we keep striving to have a positive impact on staff, communities, and the natural environment. This isn't a 'nice to have', as is shown by the excellent Diversity and Inclusion (D&I) results in our Employee Opinion Survey which tell us we are improving and moving in a direction where D&I becomes naturally part of what we do.
The Board was delighted to share the benefits of this year's performance with shareholders through a significantly improved final dividend of 40 cents, up 33% on last year.
Management EPS is expected to increase by around 7.5% in FY24. We expect growth in core fees and further recovery in EBIT ex MI. Margin Income is expected to be higher at around $840m as higher net yields offset cyclically lower balances, although interest expense is also expected to rise reflecting higher rates. Computershare's cash flow performance continues to be particularly strong and underpins rapid de-leveraging which is expected to provide substantial balance sheet capacity for disciplined capital allocation towards complementary acquisitions that strengthen the business. Our balance sheet strength has also enabled the company to announce an AU$750 million share buyback program which is expected to further enhance returns to shareholders in FY24.
It has been my great privilege to work with the Board, CEO Stuart Irving and Computershare's fantastic, dedicated team of people who delivered time and again for customers and shareholders over the past year. I thank them all and especially you, our shareholders, for your ongoing investment in our success.
Paul Reynolds
Chairman
All references to Management Results in the Chairman's Report are in constant currency unless otherwise stated.
This guidance was provided subject to the assumptions, detailed financial data and the important notice on slide 58 regarding forward looking statements of Computershare's FY23 results presentation available at www.asx.com.au.
Our 2023 ESG Report will be available from 16 October.
We delivered a 23% return on invested capital, generated over $500m of free cash flow and increased our focus on growing our core businesses.
In FY23, revenues, inclusive of margin income, grew across all our core business lines, including Issuer Services, Employee Share Plans and our US Corporate Trust Business.
Our people have performed exceptionally well, managing the complex integration of recent major acquisitions, adapting to the opportunities and threats from a volatile macro-environment and re‑shaping the way we work for a post-pandemic world.
This year we continued to fortify Computershare and execute on our strategy to build a simpler, stronger Computershare with high-quality earnings.
In Issuer Services, Governance Services continued to grow. Registry revenues increased modestly despite a lack of IPOs, which caused a follow-on shortfall in registry work for newly listed companies.
Transaction revenues in Employee Share Plans recovered in the second half of FY23, after subdued trading in the first half, and we continue the roll out of the EquatePlus product. Data shows we can gain market share where the system is deployed.
We also had a full year's contribution from CCT, our US Corporate Trust business, which we are integrating to plan and delivering expected synergies.
With a focus on streamlining the Group, we sold our Bankruptcy and Class Actions business in May this year and we continue to assess options available to us in our Mortgage businesses.
As always, our financial success this year is not just a numbers story – it's a people story.
More than 14,000 staff who work across more than 20 countries made our success happen, guided by our core values of certainty, ingenuity and advantage. Perhaps most importantly, we took time to enjoy the ride along the way, feeding into our trademark 'purple' culture that attracts and keeps top talent.
We remain committed to doing the right thing by our staff, broader communities and the environment through ESG measures. Our Diversity and Inclusion strategy helps ensure our company is genuinely diverse and supports everyone to thrive as they are. In FY23, we developed our first five-year action plan, bringing us one step closer to our goal to achieve Net Zero by 2042. We have offset all our carbon emissions since 2020, which you can read more about in our 2022 ESG Report.
We also continued to partner with staff to invest in global and local projects that provide opportunities and champion inclusion, through our Change A Life program. You can read more about these programs on page 17, and in our annual ESG Report.
Computershare's future excites me as much now as it did when I joined the company more than 26 years ago. This is in large part because we never rest on our laurels and are always striving to be better.
In FY24 and beyond, we will continue to maintain a conservative balance sheet with acquisition firepower. We will deploy our cash flows to strengthen our operations, make attractive acquisitions in our core businesses, drive technology innovation and, importantly, reward shareholders.
Thank you to our shareholders for your support. My deepest thanks also to every member of our staff and our Board for your efforts over the past year.
Stuart Irving
CEO and President
Computershare's 2023 Annual General Meeting will be a hybrid meeting at 10.00am on Wednesday, 15 November.
At 10.00am on Wednesday, 15 November 2023 at 452 Johnston St Abbotsford VIC 3067.
You can participate online to view a live webcast, ask the Directors questions and submit your votes in real-time.
Our Chairman, Paul Reynolds, provides details of Computershare's overall progress throughout FY23.
Computershare is committed to addressing ESG issues. Our 2023 ESG Report will be available from 16 October.