The ASX-listed financial services admin provider Link, which is still in sights of at least one putative bidder, has told the market it expects to perform slightly better than expected ahead of reporting its December half-year results in February.
In a trading update on Thursday, Link forecast its total revenue will be $597 million for the half, up from the $594 million guidance provided in the last trading update in December.
The above expectations revenue was driven in part by “another record month of transaction volumes” for the group’s property settlements platform, PEXA.
Link group chief executive Vivek Bhatia said PEXA continued to build on its strong business model.
“Pleasingly, the business continued to perform well through December 2020. Revenue was above expectations and, together with continued control of operating expenses, resulted in a higher than forecast Operating EBIT for the first half.”
Operating earnings before interest and tax (EBIT) has been upgraded from $77 million to $79 million while Link’s operating net profit after tax adjusted amortisation (NPATA) was lifted from $57 million to $65 million.
PEXA is a leading Aussie electronic property payments platform and a potentially lucrative target. Link has an indirect interest via its 44.2% stake in PEXA’s owner, Torrens Group Holdings.
Pacific Equity Partners, Carlyle Group and their affiliates are still in the bacground looking to see what happens at Link. They want PEXA.
An approach by a US group, SS&C Holdings disappeared earlier this month without explanation. Their offer was at $5.65 a share. PEP and Carlyle offered $5.40 a share but the Link board has rejected that price as inadequate.
The problem is the PEXA holding and what Link plans to do with it. A spin off of Pexa has already failed now sharks at Macquarie and KKR are claimed to be looking it over.
Link shares edged up 1.4% to $4.81, a long way from the two bid prices which usually means investors are not expecting a renewal of interest any time soon.
Link Group will announce its first half results on February 25.
