Computershare had ‘social obligation’ not to cut staff during pandemic, CEO tells investors
Shareholder registry business Computershare backed its staff despite the double digit damage to revenue.
Australian share registry company Computershare backed its staff during the depths of the coronavirus pandemic, refusing to cut jobs because the technology company had “a social obligation” in times like these.
Chief executive Stuart Irving outlined how despite double digit declines in revenues, staff had not been cut nor forced to take leave.
ASX-listed Computershare on Tuesday night posted a net profit of $232.7m for the 12 months through to June, compared with a $415.7m profit in the year prior.
Mr Irving told an investor briefing that despite the financial hit, looking after Computershare’s 12,000 employees “was our number one priority”.
“It was a frightening time for many. We looked after them by preserving jobs and not slashing headcount or demanding large scale furlough or government grants,” Mr Irving told investors.
“We provided flexibility, so our staff could become home carers and educators. At difficult times like these as a corporate we have a social obligation to our employees and the wider community. This may have a modest impacted on short-term earnings but I guarantee we will get a better return over time for having done the right thing”.
Mr Irving said unlike many other companies Computershare did not require its staff to take leave.
“While we encouraged employees to take annual leave in the fourth quarter, we took the view that we would not force leave – so it could be used as an additional safety net for employees should there be second waves of COVID infection. This accrual cost us 1.5 cent of (earnings per share). But again, it allowed us to keep people employed,” he said.
Computershare, which ranks among the world’s biggest administrators of share registries, maintained its dividend in the face of the extreme economic headwinds caused by the coronavirus pandemic, with its 55 per cent payout ratio retained.
“We can afford it. It doesn’t jeopardise our investment plans,” Mr Irving said.
“We have continued to deliver high levels of service to our customers, most often remotely. We have maintained our sharp focus on execution and getting the job done. Projects need to carry on, I have expectations they will be completed as do our clients and we have done so. We are also continuing to execute on our own long-term growth strategies.”
Flagging the prospect of operating profit growth in 2021, Mr Irving said all of its business lines saw improved performance over the last two months of the 2020 financial year.
“I am pleased to report that our operating business has proven its resilience, continuing to perform during the last few months of the financial year despite the deepening impact of COVID-19 and the associated volatility it’s brought to our markets,” he said.
Computershare is targeting positive operating profit growth for 2021, with earnings before interest and tax (excluding margin income) to be up around 10 per cent.
Shares closed down 3.3 per cent at $13.22.
-Additional reporting Cliona O’Dowd
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