Link (ASX:LNK) share price rises despite earnings fall

The Link (ASX:LNK) share price is on the rise today after the financial services company released its half-year results. We take a look.

Gretchen Kennedy

Gretchen grew up in a small Connecticut town where she learned to read The Wall Street Journal as part of the grade six enrichment program. She moved to Australia in 2002, earned a Master of Arts (Professional Writing) and went on to spend eight years writing on Wall Street. In June 2018, Gretchen returned to Australia and has since developed a keen interest in all things ASX. In December 2020, she started writing for the Motley Fool. Gretchen's usually writing something, reading a book or chasing her dogs around.

Published February 25, 2021 10:28 am AEDT

Link Administration Holdings Ltd (ASX: LNK) shares are on the rise today after the company released its FY2021 half-year (1H21) results this morning. At the time of writing, the Link share price has edged 2.11% higher to $4.83.

Let's take a look at what the financial services business reported.

Investor kissing piggy bank. — Image source: Getty Images

Link earnings update

The Link share price is edging higher in morning trade despite the company reporting 1H21 revenue of $597 million. This compares to $624 million in revenue for the prior corresponding period (pcp).

Operating earnings before interest, tax, depreciation and amortisation (EBITDA) dropped to $137 million in 1H21 compared to $163 million in the pcp.

Link posted a statutory net profit after tax (NPAT) of $31 million compared to NPAT of $29 million in the FY20 first half.

In positive news boosting the Link share price, earnings per share (EPS) was slightly up from 5.2 cents in 1H20 to 5.8 cents in 1H21.

The board declared a 60% franked interim dividend of 4.5 cents per share. This compares to 6.5 cents per share in the pcp.

CEO comments

Reflecting on Link's 1H21 performance, CEO and managing director Vivek Bhatia said:

Link Group has successfully navigated some challenging external conditions, demonstrating financial resilience. Our financial performance was underpinned by high levels of recurring revenue and strong free cash flows. We have clear strategic priorities that will continue to strengthen our capability to capture future opportunities…

Link Group has demonstrated financial resilience during 1H 2021, providing a strong platform from which the business can resume earnings growth in FY 2022. Our core businesses have strong market positions and clear strategic ambitions. Trading to date has been in line with expectations, with European activity remaining subdued due to the extended COVID-19 related lockdowns in key jurisdictions.

Link share price snapshot

Link provides support services that help its clients manage their equities, pensions and superannuation, investments, property and other financial assets.

Over the past year, the Link share price has fallen by around 22%. Year to date, Link shares have increased by 0.63%.

Based on the current Link share price, the company has a market capitalisation of around $2.5 billion with 535 million shares outstanding.

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