INTRODUCTION

Computershare provides integrated shareholder services to more than 7000 listed entities with over 60 million individual shareholder accounts in 10 countries around the world. The business delivers a full suite of integrated services to meet the needs of listed entities, their employees and their shareholders.

Computershare’s competitive advantages can be summarised as follows:

• All services provided by the company to issuers and shareholders are our core businesses.
• We are the only global provider of these services.
• We are the only service provider in the industry who provides a full service capability.

THE YEAR IN REVIEW

In our report to you last year we explained that revenue and earnings growth would depend on the recovery of global equity markets and in particular, improved interest rates and a higher level of corporate actions. This message was reinforced in our half-year guidance.

We also undertook to exercise vigilance in managing the cost base to ensure costs were kept in line with lower activity levels.

The past year did not provide any real recovery in either corporate actions or interest rate levels. In some areas the past year actually provided declines in these two factors. Due to continued poor market conditions, our approach over the past year has been to manage the company through the cycle and deliver the best possible result for the year.

We embarked on a three-point strategy including:

• Reduction in operating costs
• Improvement in service quality
• Improvement in the management of working capital

Against a revenue decline of 9%, we have achieved:

• Sustainable reduction in total operating costs of 10% (excluding non-recurring items)
• EBITDA (excluding non-recurring items) declined by 9%
• Improvement in service standards evidenced by minimum attrition rates that have been more than offset by new business wins and maintenance of market share
• Steady growth in our Employee Plans and Document Services businesses
• Modest improvement in the management of working capital (although more is needed).

However, the significant restructuring of our global businesses does come at a short-term cost to the NPAT line, which is affected by the non-recurring costs of redundancy and other write-offs. The underlying fundamentals of our global business remain sound. Our balance sheet continues to be strong and our businesses are more efficient and client-focused. Our businesses around the world are poised to benefit from an upturn in the market without adding significantly to the cost line.

Significant Events (excluding acquisitions)

On 11 September 2002, Computershare announced the buy back of up to 10% of ordinary shares in issue.

• The buy-back resulted in the purchase of 18,710,000 ordinary shares (3.38%) for a total cost of $38,350,708 (average price of $2.05) at the time of its completion date of 11th March 2003. Our gearing on a net debt to equity basis changed from 5% at end of FY 2002 to 13.2% as at 30 June 2003.
• During the year we announced our intention to move to new global headquarters in Abbotsford. This initiative will bring all Melbourne business units together with the centralisation of global technology development and some global processes, which will create significant cost saving and process improvement opportunities.
• On 28 August 2003, we announced a dividend of 2.5 cents per share, fully franked making a full year return of 5 cents per share, fully franked.