Link Group shares jump on FY profit surge
A year of expansion has helped boost Link Group’s bottom line and shares in the funds administrator have surged to a three-month high.
Peter TruteAustralian Associated PressAugust 17, 20181:33pm
Link Group shares have rebounded after the financial data administrator reported an acquisition-fuelled 68 per cent increase in full-year net profit to $143.2 million.
Link lifted revenue for the year to June 30 by 54 per cent to $1.2 billion, while operating earnings jumped 53 per cent to $335 million – before taking out $45 million in costs linked to acquistion integrations and costs.
In 2017 Link acquired UK and Europe-focused administrative platform LAS in a $1.5 billion deal and the 2017/18 results include an eight-month contribution from the new business.
Chairman Michael Carapiet said it had been a "transformational" year for Link.
"The acquisition of LAS materially expands our footprint in Europe and has had a strong positive impact on Link Group," he said.
LAS contributed $404.9 million in revenue for the eight months, with operating earnings of $93.8 million.
Link's businesses cover management of superannuation fund client data for fund managers, corporate markets stakeholder management data and technology solutions for database, workflow and payments systems management.
Link shares plunged in May when the company warned changes to inactive superannuation accounts introduced in the federal budget might affect its funds administration business.
The stock has recovered much of that lost ground since and at 1332 AEST Link shares were up 47 cents, or 6.2 per cent, to $8.06.
Link Group managing director John McMurtrie said the expanded group is well-placed to pursue new business opportunties.
"With a global trend in increasing complexity and governance oversight facing the markets we serve, Link Group remains well placed to help our clients manage the changing regulatory landscape," he said in a statement.
In its outlook statement the group said its earnings momentum was continuing in the new financial year, while a strong balance sheet would allow it to explore "future growth opportunities.
LINK'S YEAR OF TRANSFORMATION:
* Net profit for 2017/18 up 68pct to $143.2m
* Revenue up 54pct to $1.2b
* Final dividend 13.5 cents, fully franked