One of the best performers on the ASX 200 on Wednesday has been the Computershare Limited (ASX: CPU) share price.
In morning trade the stock transfer company's shares were up as much as 6% to $18.84 following the release of its half year results.
What happened in the first half?
During the six months to December 31, Computershare recorded management EBITDA of US$335.4 million on revenue of US$1,146.5 million. This was an increase of 14.3% and 1.7%, respectively, on the prior corresponding period.
On the bottom line, management earnings per share came in 15.5% higher than the prior corresponding period at 35.4 U.S. cents. This allowed the board to declare a 21 U.S. cents per share interim dividend, up 10.5% on the same period last year.
The company's CEO, Stuart Irving, appeared to be rightfully pleased with the company's performance during the first half.
He said: "Computershare is performing to plan with Management EPS increasing by 15.5% in constant currency terms. The improvement was primarily driven by ongoing profitable growth in Register Maintenance, margin income gains and a reduced tax rate. These results demonstrate the strength of Computershare's business during a period of heightened market volatility and global uncertainty."
Mr Irving also revealed that the execution of its strategic priorities has continued to deliver returns.
He added: "We are investing in our growth engines and building scale in Mortgage Services. Despite the slowdown in US mortgage originations, particularly in Q2, UPB increased to over US$92 billion. We also saw good growth in capital light sub servicing work with new client wins. In the UK, we delivered revenue growth aided by new originations and project fees."
In addition to this, the company's work on its cost out programs has been a big positive. Total costs fell US$25 million during the period.
Outlook.
Following the strong first half performance management has upgraded its full year earnings guidance.
It now expects to deliver ~12.5% growth in management EPS in FY 2019, compared to previous guidance for ~10% growth.
Looking beyond FY 2019, the company's executives appear very positive on its outlook.
Mr Irving said: "With our growth, profitability and capital management strategies serving us well, and the optionality inherent in Computershare continuing to convert into profitability, our commitment to deliver multi year earnings growth is intact."
Should you invest?
Based on its guidance for management earnings per share growth in the region of 12.5% and current exchange rates, I estimate that Computershare's shares are changing hands at 19x full year earnings.
Given its strong performance and management's positive multi-year outlook, I think this is a fair price to pay for its shares.
As a result, I think it could be a good option along with fellow tech shares Bravura Solutions Ltd (ASX: BVS) and Xero Limited (ASX: XRO).
