Share registry group, Computershare, was another company to surprise on the upside in its earnings update yesterday, with news of a 20% rise which is now expected for the December half.
That was well above market expectations and confirms that the company, which is the world’s largest share registry business, has benefited from the very strong rebound on global markets since midway through 2009.
The shares jumped 9% at one stage to a day’s high of $12.66, before easing a touch to end up 8.2% (or 94c a share) at $12.40.
In a short statement yesterday morning the company said that "preliminary numbers" indicated the 20% increase, although it also warned that this was based on significant transactions that may not repeat in the second half.
Computershare said it would review its full-year outlook prior to releasing the interim results.
"Whilst the results for the first half are encouraging, a number of significant transactions took place over the period that may not repeat in the second half," Computershare said.
CAn update on the company’s expectations for management earnings per share for the full year will be provided when the first half results are released."
Computershare plans to release its first-half results on February 10.
At the annual general meeting in last November, CEO Stuart Crosby told shareholders he was confident the 2009/10 profit would exceed the previous year.
Basic earnings per share fell 8.2% to 46.02 cents per share in the 12 months to June 30, 2009.
yesterday the company told the media that it was the surge in IPOs, especially in Hong Kong, that helped produce the upgrade.
The IPOs are of mainland Chinese companies floating shares in the very active Hong Kong market to raise new capital and to provide a trading medium for offshore investors.
Now the expectation is that eps will top those figures quite easily, thanks to rise in new floats on major markets and greater trading levels, compared to the December half of 2008 when market slumped sharply.
What is interesting about this forecast is that Computershare was on everyone’s list of companies to be hurt by the stronger Australian dollar in the December half year.
Clearly that has been a factor, but the surge in revenue from increased IPO and trading activities has been greater than the impact of the dollar.
And still in financial services, debt collector, Collection House also upgraded its half year guidance yesterday, forecasting interim profit to jump 55% or more to $5.3 million.
That’s a much smaller figure than we have been talking about with Flight Centre and Computershare, but it is indicative of the improved outlook (although debt collectors make money from gathering unpaid debts, which rise during economic slowdowns!).
Managing director and chief executive Tony Aveling said in a statement that first half profit could climb 61.8% to $5.5 million for the six months to December 31, 2009.
The receivables management company cut its bank debt during the first half in an environment of rising unemployment and households under pressure.
"Despite this and the withdrawal of government stimulatory measures, we were still able to maintain revenues while keeping a tight rein on expenses and reducing funding costs," Mr Aveling said on Tuesday.
Shareholders could look forward to a higher interim dividend, he said.
Shares in the company leapt 30% on the news to 93.5 cents, a two year high for the stock.
They ended up 12 cents, or 16.7%, at 84 cents.
Collection House expects to deliver interim before-tax profit of between $6.7 million and $6.9 million, up to 27.7% higher than in the previous corresponding period.
Revenue is expected to remain flat at around $52-$53 million and earnings before interest and tax would rise to between $9 million and $9.2 million, an increase of at least 15% on the prior corresponding half.
Collection House will report its interim 2010 result on February 25.
