First Impressions Profit Report: Computershare (CPU) - A slight miss in FY15 result and substantially lower FY16 guidance

Net operating cash flow down 9% to US$372.1m. When we downgraded in March to a Hold noting emerging earnings risks, we didn’t expect it to be as bad as it appears, nor for it to happen so quickly as there were still some acquisition synergies to come through and the corporate actions division was supposed to pick up a bit; FY15 USD management EPS guidance was for it to be modestly above FY14 (so a range around 0%-3% higher). The company has come in slightly below at -0.7%, which compares to our -0.3%. Outlook: CPU expects its FY16E underlying business performance to be broadly similar to FY15, but with the combined drags of: 1) higher USD, 2) lower yields, and 3) additional investments on efficiency initiatives. Taking all factors into account FY16E EPS will be “down ~7.5% yoy”. Read the summary here: (VIEW LINK)