SHARE registry company Computershare has long enjoyed a nice little earner from interest on money held in trust. It sits on funds from floats and other market issues as long as it can – to the tune of $89 million for the latest half year.
Unfortunately for Computershare, Woolworths may have called time on this ”margin income” ploy. Woolies apparently told Computershare when negotiating its recent bond issue that the interest on investors’ funds should be remitted to the investors.
And although Computershare boss Stuart Crosby depicted the Woolies negotiation as a ”one-off” at the half-year analyst briefing, BusinessDay hears that ANZ insisted on the same deal for its latest note issue.
The ramifications may be material. Revenue last year was $1.6 billion, of which $172 million related to interest earnings on money held on trust. On that revenue, Computershare generated earnings before interest and tax (EBIT) of $368 million and earnings before interest tax depreciation (EBITDA) of $494 million.
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.