The Asia Pacific region comprises Australia, New Zealand and Asia, including Hong Kong and Philippines

REGIONAL SUMMARY

Market conditions in Asia Pacific were difficult during 2002/03, if a little less so than in other regions. Very low levels of corporate actions and continued lower interest rates across the region, combined with the SARS outbreak in Hong Kong and aggressive price competition in the Australian registry market, placed significant pressure on revenues. These were met with a range of restructuring and cost savings initiatives, and offset to some extent by some significant client wins.

Our Asia Pacific Document Services, Plans and Analytics businesses all achieved excellent results in a difficult climate.

A key development during the year was the establishment of a single regional infrastructure for sales and marketing, finance, human resources, and legal, risk and compliance. This provided efficiencies, but more importantly provides a strong platform from which to deploy our integrated offering across product lines and geographical boundaries. We are already winning significant new business with our integrated offerings and we look forward to continued growth from the same quarter going forward.

Another significant change initiated during the year is the consolidation of our Australian document processing operations, enabled by further deployment of ‘workflow’ paperless processing technology. New technology has also been introduced into our call centre operations. Both these measures have already provided significant quality and service level improvements as well as contributing to cost control. Further benefits will accrue during the current year as these initiatives complete.

AUSTRALIA

INVESTOR SERVICES
(OUR SHARE REGISTRY)

The Year in Review

Due to the expected continuation of poor market conditions, a series of strategies were developed to minimise the impact on the investor services business. The strategies focused on cost reduction, improvements in service standards and an increase in cross-selling our various products and services to existing clients.

The year’s results reflect the successful delivery of this strategy. Restructuring in the operational processing area of our business together with a re-alignment of business into a ‘matrix management’ model has delivered 4% improvement in sustainable savings for this financial year.

We have maintained market share in a tough competitive climate with an increase of 5% in shareholder numbers. Investor Services accounts for 63% of all listed companies including 64% of ASX 200 issuers.

During the course of the year, we won 57% of initial public offerings (38 out of 67) in competitive tenders, which equates to around 58% of the total new capital raised last year.

The re-structure of the product development, sales and marketing group is also beginning to deliver positive results across products and services with an increased take-up rate for Analytics, Plans, Document Services and electronic shareholder communication products.

In order to provide an increased level of support for staff, the learning and development teams have been centralised in Melbourne and this has resulted in marked improvements in delivery of ‘on the job training’, skills transfer, and industry specific knowledge and competencies.

Our graduate program, now in its second year, has been an outstanding success, with no graduates leaving the program. The first intake of graduates are fully integrated throughout our businesses and those in the second intake are proceeding successfully, as they are rotated throughout our main business units. The overall standard of the graduates has been extremely high.

Technology has played a pivotal role in creating efficiencies in our business and in facilitating improvements in our service levels. During the year we implemented InvestorPhone, a new telephony platform delivering better services to shareholders and other industry participants and improved management information to measure the quality of our delivery.

A further refinement to our workflow technology, that records and tracks all paper-based shareholder communications, has resulted in a more effective and timely service to these stakeholders.

Market Conditions

In line with many other countries, financial markets in Australia have been characterised by low levels of capital raising activity, although there were signs of a modest increase in levels as the year came to a close.

In this climate there has been a natural tendency for corporate Australia to reduce costs wherever they can and, as a consequence, this has put pressure on pricing. Despite this pressure we successfully held off a number of challenges to existing accounts and won significant new business. It is also encouraging to note that this was achieved while still protecting acceptable profit margins.