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We would like to invite you to our 2022 Annual General Meeting to be held at 10.00am on Thursday, 10 November 2022.
We would like to invite you to our 2022 Annual General Meeting to be held at 10.00am on Thursday, 10 November 2022 at our Yarra Falls office, 452 Johnston St Abbotsford VIC 3067.
The Annual General Meeting will be held on Thursday, 10 November 2022 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/CPU2022 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 2022 Annual General Meeting to be held at 10.00 am (Melbourne time) on Thursday 10 November 2022.
I am delighted that, after two years of pandemic-related restrictions, we are once again able to invite you to attend this year's AGM in person, at our newly refurbished 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 own online meeting platform that we launched last year.
The resolutions to be considered at the AGM include the standard director re-elections, and this year Tiffany Fuller is standing for re-election.
The resolutions also include the adoption of the remuneration report, which you can read from pages 45 to 66 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. We are also putting forward a special resolution this year to approve a new constitution for the company. This document was last updated in 2012 and, given changes to regulations and market practice since then, your Board believed it was an appropriate time to align it to current best governance practices.
Details of the resolutions are included in this Notice of Meeting. Your Board recommends that you vote in favour of all resolutions.
FY22 continued to be a challenging year in a volatile and uncertain environment. Nevertheless, we continued to support our people, deliver for our customers and grow our business. The pandemic still poses challenges, but our people have again excelled under difficult circumstances.
While we are yet to return to pre-pandemic numbers, Computershare's financial results for FY22 were very pleasing.
Management revenues increased by over 12% and Management EBIT increased 19%, with eight months' contribution from the Corporate Trust acquisition in the US. Strong cost controls and growth in client fee income offset weaker transaction revenues, and we were able to manage the impact of inflation as we began to benefit from higher than anticipated interest rate rises in some of our key markets in the last quarter.
Issuer Services and Employee Share Plans continue to win market share. Transaction-based revenues in Corporate Actions and Employee Share Plan trading were impacted by market volatility in the second half, and the expected recoveries in Bankruptcy and Class Actions are yet to come through.
Mortgage Services in the US delivered a disappointing result, although the medium-term outlook is more positive.
The well-timed Computershare Corporate Trust (CCT) acquisition in the US continues to exceed expectations. We are making good progress integrating the business and delivering the expected synergy benefits. The business delivered $90m of EBITDA for the year, with $80m of that in the second half.
Computershare's free cash flow and balance sheet were standouts. We generated over $320m of free cash flow with over 60% EBITDA to cash conversion. Debt leverage has improved to 1.64x where post acquisition leverage as at December 2021 was 2.02x. This balance sheet flexibility will enable us to continue to strengthen and scale our global growth businesses, fund the integration plan for CCT and reward shareholders.
We continue to use our strong liquidity to support our shareholders, increasing our final dividend to 30 cents per share, an increase of 30% on the prior year.
It's in Computershare's DNA to put our people and sustainability first. Our Board considers Environment, Social and Governance
(ESG) matters regularly given their importance not only to our people, but also the communities in which we operate. We are committed to playing a role in the global transition to a Net Zero emissions economy, which we aim to achieve by 2042. We are also excited to have recently launched the next stage of our multi-year diversity and inclusion (D&I) strategy, and all senior employees now have ESG metrics embedded into their targets. This year we have published a standalone ESG Report, which discloses our plans, progress and performance in relation to these important topics and is available on our website.
In August 2022, we provided earnings guidance for FY23. In constant currency, we expect Management EPS to be up around 55%. This equates to around 90 cents per share.
Margin income is the big driver. We are guiding to around $520 million of margin income in FY23. This includes the benefit of both recent interest rate rises and the global market's expectation of future interest rate rises, as well as the impact of our hedging strategies, where we are looking to deliver a smoother earnings profile over time.
The other side of higher interest rates is higher inflation. We are not immune to inflationary pressure and, while we will maintain our disciplined focus on cost control, we expect cost growth of around 5% on a proforma basis in FY23, while the interest expense associated with servicing our debt will also materially increase. With a strong financial position, we will continue to invest in our businesses and assess complementary acquisition opportunities while maintaining a conservative capital structure and rewarding our shareholders.
I have been honoured to serve as Chairman since 2015, and it has been a privilege to work with the Board, Stuart Irving as CEO, and his executive team during this time. The timing is now right for a smooth transition to our new Chairman, Dr Paul Reynolds, to guide Computershare through this next phase.
I'd like to thank all shareholders for your support and for being able to serve you as a Director and a Chairman.
Thank you to our employees for their hard work, determination and ingenuity. Despite another challenging year, our teams found new ways to collaborate in a hybrid workplace and keep consistently delivering for our clients and customers.
Thank you to my fellow directors for their invaluable support and for the experience, insight and expertise they bring to the Group. I have valued your counsel greatly over the years and will miss being part of this diverse group.
Finally, I would like to thank Stuart Irving, our CEO and President, for the exemplary leadership he has provided and his commitment to protecting our Company. His dedication is appreciated, as is the great contribution he continues to make to Computershare's performance and our distinctive purple culture.
Simon Jones
Chairman
* This guidance was provided subject to the assumptions, detailed financial data and the important notice on slide 64 regarding forward looking statements of Computershare's FY22 results presentation available at www.asx.com.au.
All references to Management Results in the Chairman's Report are in constant currency unless otherwise stated.
Computershare is proposing to replace its constitution at the AGM. You can view the current and new constitutions below.
Computershare's 2022 Annual General Meeting will be a hybrid meeting at 10.00am on Thursday, 10 November.
From 10.00am on Thursday, 10 November 2022 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, Simon Jones, provides details of Computershare's overall progress throughout FY22.
Computershare is proposing to replace its constitution at the AGM. You can view the current and new constitutions here.
We're pleased to present our first standalone ESG report, giving you an overview of our journey and increasing our disclosure.