Computershare Ltd (ASX: CPU) shares are on the slide on Wednesday morning.
At the time of writing, the stock transfer company's shares are down 4% to $39.50.
This follows the release of its full year results after the market close.
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Computershare shares fall on results day
For the 12 months ended 30 June, Computershare reported a 4.4% increase in group revenue to US$3.1 billion, excluding the US Mortgage Services business sold in May 2024.
This growth was driven by an increase in client fee revenues, which rose more than 4% and make up the majority of the group's income.
Event and transaction revenues climbed over 13% year on year, although volumes were briefly impacted in April as some clients postponed transactions amid market volatility. Computershare noted that markets have since stabilised and expects some of these delayed events to return in FY 2026.
Margin income came in at US$759.1 million, down 2.8% on the prior year, but ahead of expectations. The company benefited from higher average client balances of around US$30 billion and a hedging strategy that helped offset the impact of falling interest rates.
As for earnings, management EBIT excluding margin income jumped 17.4% to US$411.9 million. This reflects revenue growth, disciplined cost management, and operating leverage. EBIT margins excluding margin income expanded by 150 basis points to over 17%.
The company also delivered a return on invested capital (ROIC) of more than 35%, reflecting the strength of its capital-light business model.
Dividends
In light of the above, the Computershare board declared a final dividend of 48 cents per share (unfranked). This was up 14.3% on the prior year's final dividend.
The record date for this payout is 20 August, with its payment scheduled next month on 15 September.
Management commentary
Computershare's CEO, Stuart Irving, was pleased with the year. He commented:
Computershare has delivered another year of strong earnings growth, with Management EPS up 15%. Results are in line with the earnings guidance we upgraded in February. We are executing well on the strategic plans we made to build a simpler, higher quality and capital light Computershare, that can deliver consistent results and enduring returns for shareholders.
We have streamlined the group and recycled capital to scale our exposure to long term growth trends. These growth drivers have helped us to deliver earnings growth as interest rates fall.
Outlook
Computershare revealed that it is entering "FY26 with confidence and expect to deliver another year of positive earnings growth."
Its initial guidance is for management earnings to be around 140 cents per share, which will be up 4% year on year.
Looking further ahead, management said:
With increased exposure to long-term trends, momentum in our core businesses and the benefits of a strengthened balance sheet, we are well placed to continue to deliver growth and enduring returns for shareholders.
