Computershare Aktie

Good morning, and thanks for joining us for Computershare's 1H '26 Results Conference Call. As usual, Nick Oldfield, our CFO, is with me, along with Michael Brown from our IR team.

We've released the presentation pack on our website, and I'll take you through the highlights on this call. Nick will then take you through the financials in more detail, then we'll open the lines for Q&A.

And just to remind you, we will be talking in U.S. dollars constant currency and comparing to 1H FY '25 unless we state otherwise.

Now there is a lot of detail on the results pack, but let me take you straight away to the key features of the result that matter on Slide 2. Business performance. EBIT ex MI, which really talks to the underlying business results was up 12%. And Nick will talk you through all the moving parts, but our BAU OpEx costs were contained below the rate of inflation. And excluding margin income, our margins expanded to 16%. And I think we're well on our way to the 20% EBIT ex MI margin target that we have called out.

Now the margin income result, I thought was a standout. We knew that margin income was a headwind going into this year with the prospect of rate cuts, which actually came quicker than the curves predicted last August. And I know that U.S. cash rates have been a focus for many investors, and they did fall sharply in the half. U.S. cash rates were down over 17% compared to the PCP. However, Computershare's margin income was only down 5%. So there's clearly more to this than cash rates alone, and Computershare's natural hedge worked, and I'll explain that a bit later.

Event and transactional revenues were also a highlight, up almost 13%. And we are seeing increased corporate action activity in some areas, although not firing on all cylinders across all regions yet. Employee share plan transaction volumes continue to grow, which is really a reflection of the continuing growth in the use of equity and remuneration and is really underpinned by increased issuance by companies. And finally, from a key points perspective, with a solid first half under our belts, stronger business performance and improved outlook for margin income, we are upgrading full year earnings guidance to $1.44 per share, and that's growth of 6% over the PCP.

So these are the key points to start with, but let's move to Page 3, which is really a summary of the results. Management EPS was up 3.9%, and we have delivered earnings growth and consistently high returns in a lower interest rate environment. ROIC was over 36%, and our debt leverage reduced to 0.3x. And you may remember that future buybacks are tax inefficient for Computershare at the moment. So the Board has stepped up the interim dividend to the top half of the payout ratio range. AUD 0.55 per share is a 22% increase in the interim dividend, and Nick has kindly tipped in a few of his franking credits for this one as well.

Now let's move to Slide 4. This new chart shows the long-term track record for each of our 3 key business lines and their 7-year CAGRs. The key point is that through organic growth and complementary acquisitions, all of our businesses have delivered solid revenue and EBIT growth over time. Now we've come a long way, and there are some impressive growth rates here. Employee share plans has delivered almost 10% revenue CAGR, underpinned by the issuance tailwind that we have spoken about.

Issuer Services has been a consistent high-quality performer as we leverage our strength and build out complementary product lines. Corporate Trust has delivered the fastest EBIT growth over the period, including that step-up from the Wells Fargo acquisition. And we expect to continue to deliver long-term growth across all our businesses. We will continue to strengthen our competitive positions, widen our competitive moats and deploy new technologies to enhance customer value and, of course, efficiencies.

Now just going into a little bit more detail on each of the business lines for the half. Issuer Services delivered the fastest rate of revenue growth across the group with contributions from all business lines. Registered maintenance revenues improved by over 4%, supported by new client wins across all our major markets. Corporate Actions revenues are recovering with revenue growth of over 12%. And while activity levels are still about 25% below peak 2021 levels, we have seen some strong improvement in some product lines since around November.

IPOs in Hong Kong are a highlight. There's a sharp increase in completed deals, and we have increased our market share of new listings. But here is a good example of the flow-on effect in our business. In Hong Kong, we have seen north of a 400% increase in retail participation and applications for these IPOs. These applicants become shareholders.

Now of course, we earn a corporate actions fee for the listing, but then we end up earning recurring fees for maintaining the register going forward. M&A volumes, on the other hand, are yet to fully recover, as I mentioned earlier on. The number of completed deals was down across all markets apart from Australia. But based on the deal pipelines, the outlook is a little bit more positive, but it is hard to predict which half year period it will actually land in.

Elsewhere in Issuer Services, in January '25, we completed 2 small investor-related acquisitions, which were not in the PCP. Now these businesses are small and the margins are lower as we build out scale and capability. We also touched on tokenization within Issuer Services at our AGM. Since then, we have continued to actively engage with regulators and market participants to help shape the structure of digital markets, and we see this as a long-term positive for us.

Computershare has always, at its heart, been a technology company whose key role is to support and advise issuers. We have applied our deep understanding of the rationale and benefits of existing market structures to design a tokenization model, which we call issuer-sponsored tokens or ISTs. We have been engaging with the digital task force at the SEC on this proposal. And I think it's really encouraging to see that our pro-issuer stance is being reflected in the latest communications from the task force, and we really see that as an opportunity going forward.

I mean, our goal is really to replicate the trust, compliance and protections of traditional registered ownership while enabling the benefits of digital transferability, interoperability and, of course, approaching 24/7 accessibility.

Now moving to Corporate Trust. The business is performing well. Fee revenue up over 12%. We are benefiting from increased issuance volumes across most product categories with strong volume growth in key structured products, RMBS, ABS and CMBS. As expected, higher activity levels are generating higher client balances, and we continue to strengthen our platform and capabilities as we patiently pursue acquisition targets. Employee share plans delivered another set of strong results. Revenues increased by 5%. Client wins across all markets drove higher fee revenues and transactional revenues grew. The plans book continues to grow with the increasing use of equity and employee remuneration.

In Europe, for example, issuance of units increased by over 20%. Recognizing the business has an element of sensitivity to equity markets, I do think we've built an impressive portfolio of multinational clients across diversified industry sectors. And it's really the size of that book that fuels the growth, and we see the number of units being administered increasing over time.

Now let's move to Slide 5, where we talk a little bit about Computershare's natural interest rate hedge. I do think that it's a very important part of Computershare's model. But it allows us to really unwrap why margin income is so resilient at down 5% when the U.S. cash rates for the period was down some 17%. And there are really several parts to this hedge.

First of all, and we've been saying this for a while, lower rates stimulate more activity across our business lines. And as you will see, client balances are up and higher balances can mitigate lower yields. And as a reminder, only about 1/3 of our balances are fully exposed to short-term rate movements. And there's also another part to this hedge with lower interest costs on group debt.

Now there are 2 drivers there, lower interest costs and reduced debt. All our debt is deliberately at floating rates. So we are also benefiting from the lower rates to the tune of some $14 million. Therefore, including interest rate savings, the net impact on lower rates of Computershare overall in the first half was only $8 million. That's only about 1.5% of PBT. So when we combine higher balances, the benefit of our hedge book and lower interest rate costs on a strengthening balance sheet, you can see that looking at lower cash rates alone sometimes misses the bigger picture.

Let me now turn to the outlook on Page 8. In August, we provided initial guidance for management EPS for FY '26 to be up by around 4% to $1.40 per share. This assumed a full year profit contribution from U.K. Mortgage Services, which we successfully divested and closed last week. Even without this additional contribution for the last 5 months of the year, we now expect to deliver management EPS of around $1.44 per share, up 6%. We do have momentum across our key business lines, lower interest costs and of course, the benefit of the share buyback we completed last year. But we will maintain our focus on executing our strategic plans to deliver higher quality Computershare that generates consistent results and enduring returns for shareholders.

Nick, now over to you to go through some of the numbers in more detail.

Thank you, Stuart, and good morning, everyone. So as you've heard, we delivered $0.679 per share of management EPS in the first half of FY '26. Now there's been some noise on costs overnight, so I want to start by clearing this up.

First of all, BAU OpEx was up 2.6%. We have said consistently, our objective is to manage BAU OpEx at or below inflation. This result is firmly in that target range. So what was the noise? Well, we calculate BAU OpEx as general cost increases less the cost-out benefits delivered around the group. Total cost-out benefits totaled $16.5 million. This was $6.2 million in operating synergies from Corporate Trust, whilst our ongoing Stage 5 cost-out program delivered $10.3 million in savings. The next component of cost is investment spend. This is really about the next stage of growth at Computershare. This added $25.7 million of cost. It includes $5 million for 6 months of new ownership of Ingage, CMi2i and BNY Corporate Trust Canada.

The remainder was investment in both technology and people to support ongoing product innovation and revenue growth, particularly in Issuer Services, investments to establish our corporate trust capabilities in Europe and the launch of a social value fund in our U.K. deposit protection service. This does, of course, cut both ways. In the second half FY '26, you will see the benefit of lower cost from the divestment of U.K. mortgage services.

Around 800 people have left the business as a result of that transaction. The third point is a slight delay in the benefits arising from our Stage 5 program. Estimated savings for FY '26 have been reduced by about $6 million. $3.3 million of this reflects a slight delay in the timing of benefits. The other $3 million is simply the fact that we sold the U.K. mortgage services at the end of January before the savings could flow through. More details on the cost-out programs are included on Slide 38.

And today, we announced that these cost-out benefits will also extend to FY '27. We now expect pretax cost savings from Stage 5 and corporate trust programs of $23.2 million in FY '27 and the EBIT ex MI margin will be higher again. I'd now like to touch on stranded cost. As you may recall, in August, I said that there was $40 million of stranded clark costs included in the FY '25 cost base in the Technology Services and Operations segment and that these were to be reallocated out to the business lines in FY '26. In 1H FY '26, around $19 million has been allocated, and the remainder will be allocated in the second half of FY '26.

To be clear, these costs existed in FY '25 and they exist today. They're not an increase. They are stranded simply as they represent costs we have to pay to support the business, and we've just reallocated them out to the divisions. To manage overall costs, therefore, we focus on cost savings elsewhere. And so the $16.5 million of cost out I mentioned earlier offsets these stranded costs almost one for one. Below-the-line costs were also lower. I said in August, they'd be 40% lower in FY '26, higher than FY '27 and disappear by FY '28.

I now expect them to be 30% lower in FY '26. This is what we achieved in the first half and second half of FY '26 will be similarly reduced. Not quite the 40% I expected, but this is largely due to timing of some redundancy expense in the second half. I expect a 55% reduction in FY '27 and still elimination by the first half of FY '28. To reiterate, FY '27 will be the last year of these below-the-line costs. This is all shown on Slide 12. So let me now touch on MI and guidance before we move to questions. In FY '26, we expect to generate around $730 million in MI, an upgrade of $10 million compared with the expectation of $720 million back in August.

You can see this on Slide 9. This is based on average balances of $30.8 billion, in line with exit balances at the end of December. We expect a yield of 2.37% based on the assumption of one rate cut in the U.S. in March and one rate cut in the U.K. in May. This is based on curves as at the 9th of February. Moving forward, I expect MI to continue to be resilient. The hedged yield should increase further to over 3.5% in FY '27. And as we've demonstrated in 1H '26, if rates do fall further and each 50 basis points in global rates is worth around $48 million in margin income, any negative impact can be materially constrained by growth in balances, lower cost of debt and increases in hedged yields.

Turning to guidance. Slide 13 shows the second half bridge. Relative to 2H FY '25, there's $0.03 per share of organic business growth and cost out. This continues the momentum of the first half. Yes, EBIT ex MI growth in absolute terms is a bit lower, but that's because the second half is always bigger and because we're dealing with the sale of U.K. mortgage services. That would have contributed $0.01 per share in the second half had we not sold it, around 2% of EBIT ex MI.

Margin income is down $0.02 per share versus the PCP. Interest expense is down $0.04 per share. This is the natural hedging action powered by a full 6 months of benefit of paying off the USPP in November 2025. Tax is broadly neutral, and there's $0.01 per share of buyback accretion. We expect this to deliver us $0.76 per share of earnings in 2H FY '26. This would be a record half for Computershare. I'll now hand back to Stuart.

Thank you, Nick. I think we are really looking forward to some of the questions. So why don't we move straight to that.

[Operator Instructions] The first question comes from Kieren Chidgey with UBS.

I might start with a sort of follow-up question on costs. Thanks for the additional detail you provided, Nick. I just wanted to circle back on some of your comments. So the investment number you called out in first half '26, I think, around $25 million, you're saying $5 million was acquisition-related, $20-odd sort of tech investment in the business.

I'm just wondering if you can sort of talk to that tech investment around how one-off you kind of see that or whether or not truly it is sort of ongoing investments you need to make more broadly on a go-forward basis? And also around sort of the additional benefit you flagged in '27, which I think you said $23 million, whether or not sort of that's the full scope of, I guess, what you see left post Stage 5 of your cost programs and whether or not we should think about or be prepared for any stranded costs out of your U.K. mortgage services sale as well?

Okay. Thanks, Kieren. So let's try and -- I think there's probably 3 questions in there. So the first one, the $20 million of non-M&A investment in the first half, yes, look, a large part of that is really one-off. So it's a one-off sort of step-up. I don't anticipate it being a recurring $20 million. There will be a little bit -- there will be a similar investment perhaps in the second half, but it will level out. And then you shouldn't see that recur going through to FY '27. The second piece was...

Just around the '27 sort of cost...

Yes. So the $23.2 million of cost savings in '27, that should be the -- it's largely the end of the -- by the end of '27, we'll have delivered the programs. So they will all be finished, but there will probably be a little bit of flow-through of benefits into FY '28, partly because of the timing of when that $23.2 million will hit in FY '27. So if you think about our EBIT ex MI margin, I'd anticipate it being sort of 19-ish percent in FY '27 and 20% in '28, if that makes sense.

And Nick, is there any sort of -- is that a gross or a net number? Is there sort of any stranded costs out of the...

Sorry, and the stranded costs on U.K. mortgage services. There is a small amount of stranded costs. But we have -- and that's really the cost of supporting the TSA over the next 12 months. We anticipate that through the course of the 12 months, as we wind down the TSA, we'll be able to eliminate that cost. So we're not anticipating a legacy sort of stranded cost issue in the business. We anticipate...

Definitely it's different from U.S. mortgage services because the U.K. business, as you'll be aware, was up for sale for a long time. So that has actually given us time to strip out some of these traditional stranded costs and have it pretty much run along as a sort of separate entity, so to speak. So the stranded cost issue in U.K. mortgage services is a very different picture.

Okay. My second question was broadly around tokenized equities. Obviously, it's a big subject matter, so I don't expect to unpack it in full today. But Stuart, I guess the question was more going to if you do see an opportunity here, what additional investment you need to make across the organization, either organic or inorganic to get the tech blockchain solutions that you might require? How you're thinking about sort of that investment slate -- and sort of at the same time, I guess you've still got the interest in building corporate trust through inorganic growth if that pipeline does open up. So how are you sort of lining up those 2 opportunities?

Yes. So if we start about sort of tokenization of digitized securities, et cetera. And I think that in the U.S., where really the discussion on tokenization is the most advanced, I think that the regulator is all about been ensuring the same level of investor protections and transparency for tokens and view them as very much regulated securities. And issuers will still require a regulated third party or a transfer agent to really sort of maintain what we call the master security file and administer corporate actions and force transfer restrictions, et cetera.

So we have been speaking with a number of market participants and regulators and also third parties about how we could structure it. We proposed something called an issuer-sponsored token, which is really designed to replicate that trust compliance and protections. And you would have seen perhaps some of the disclosures by the regulator that they fully expect that an IST model can work, but it will work alongside the current business that we have just now.

So what does that mean? Well, it just means that we have to integrate into whatever distributed ledger or blockchain-type technology there is. As you would have seen, you've got NASDAQ thinking about doing something. You've got NYSE thinking about doing something. You've got DTCC thinking about doing something. You've got other third parties. Now they're all talking about doing things which are nothing to do with the transfer agency component, right? That's got to be very, very clear, especially because of the model in the U.S. all the brokerage positions, custodian positions, et cetera, they're all held at DTCC anyway, right?

We never see them, right? We just have one account that covers their position. We look after registered sort of mom-and-pop type shareholders. So -- but we would need to integrate. Now part of that is just APIs into whatever technology solution may well be part of that. It may well mean that we'll either develop, acquire or partner to do certain blockchain components of that. I think my view is this is going to take a long time to play out. I do not see it as a negative. In fact, the independence of the transfer position or a transfer agent is still being maintained at Computershare.

And whatever technology comes, we'll integrate it, we'll own it, et cetera. I don't think it's going to be a huge cost element into Computershare. But what we want to do is we just want to make sure that issuers are protected and issuers are in charge of doing their own token. And look, we're not seeing a lot of demand for it at all apart from a couple of noisy companies whose business is around crypto. But just rest assured, Computershare is at the forefront of it. But it is a big topic, and I look forward to sort of further dialogue over the coming days on it.

The next question comes from Nigel Pittaway with Citi.

I was just wondering, first of all, if it's possible to get a bit of divisional color about this sort of EBIT ex MI margin improvement that you're targeting and flagging. Obviously, previously, you had a target for CCT to reach a 20% margin. So is that incorporated in that sort of guidance? And how should we think about it sort of happening across the various divisions?

Yes. So what we've said is EBIT ex MI, we have a target of around about 20% margins. That's really what we are targeting from a growth perspective. Now in CCT, which is our Corporate Trust business, as you'll remember, Nigel, quite often, there's the fee structure there means it's a lot -- it used to be a lot of margin income and less fees. And we're gradually sort of changing some of that sort of model into sort of more fee income, which helps improve the EBIT ex MI line.

But I think it's really going to be a contributor from all the divisions. Issuer is more of the mature business, and it's got some, shall we say, sort of start-up early growth businesses in it around investor engagement and other bits and pieces, which compresses a little bit of the margins on that front. But if you look at the EBIT ex MI performance over the last few years, we have been making step changes and improvements as we head towards that target. So I think it will be, as I said, across more of the business lines, CCT plans and Issuer probably in that order.

Okay. And I mean, is there any reason why plans margins have been relatively static given you've sort of had quite a lot of transactional improvement there? I mean is that just some investment going in, in the first half or...

Yes. Yes. I mean FY sort of '26 is really the first year where the major platform integration components of that business have been completed. So it's kind of -- it's got over the large-scale global complex technology integrations and migrations, et cetera, sort of running through. I think that it's a pretty good margin business as it stands.

I think that whenever we talk about EBIT ex MI margin businesses, I think the future capability for Computershare to use new technology that's getting deployed, and I'm not going to jump on an AI bandwagon here, but the ability to reduce some of our back-office reconciliation costs in these highly regulated business, et cetera, will lead to sort of future margin expansion because the cost to run some of these businesses there. Of course, the trick is not to sort of have that competed away these benefits, and we'll work hard on that.

But I think with -- now that the bulk of that tech integration is over, we can then sort of focus on more efficiencies and deploying some of these new technologies over the next few years that are coming through, which should help us expand the margins.

And then maybe just quickly on the footnote to Slide 38, this initial FY '27 target of $46.1 million growth. Just to be clear, is that the cost-out target? And how does that relate to -- I think it was -- did you say 23.2 earlier?

The $46.1 million is the cost to achieve, Nigel.

Right. Okay. Yes. So it's below the line.

So it ties to the -- it should tie to the chart on Slide 12.

Yes. Okay. Fair enough. And then finally, could you just maybe give us sort of some idea of the assumptions over the key drivers that are in guidance, so things such as what you're sort of allowing for corporate actions, corporate debt, share plans volumes, et cetera?

Yes. No, absolutely. I think that's important. I mean, on the corporate actions front, as I mentioned earlier, the first sort of 4 or 5 months, generally was pretty flat year-on-year, notwithstanding Hong Kong IPO. But what we have seen certainly is a momentum coming through late November, December and into January on corporate actions. I mean, M&A volume, for example, was down across all regions in this half with the exception of Australia, but we see that now picking up. There's always a lag between announced and completed M&A, of course.

So we think at this sort of early stage of the second half with a bit of momentum, we should see improved corporate actions performance. Employee share plans, I know that there's certainly a view that it's tied to where equity markets are going to be. But I think the fundamental is the number of units and the size of that book is really going to be the driver of that sort of trading revenues. The AUA on that book sort of increased 25% in 1H '26 versus 1H '25.

The number of units are up some 20% in some regions, so -- and the big regions. So that will continue to be sort of a driver so fairly consistent sort of coming through from a performance perspective. And then we touched on -- I mean, corporate trust debt issuance has been picking up and recovering. So all 3 of the businesses have some elements of momentum in them to the second half. That will offset, obviously, sort of lower margin income, but then we get the benefit of the lower debt costs as well. So that's really how we see that sort of flowing through at this early stage of the second half.

The next question comes from Andrew Buncombe with Macquarie.

Just 3 relatively simple ones, please. The first one, I think the buyback thesis is well understood now. So you've obviously increased your dividend payout ratio this half. How should we think about the dividend payout ratio in second half '26 and then again into FY '27, please?

Look, I think we've tipped into sort of the higher point of our range. Sort of I think the payout ratio is like 52% or whatever. We've got a little bit room to go there. It's good to see that step up just in terms of returns for shareholders. Even with this step-up, net debt should continue to actually drop. I think that's a really important factor there. So there's headroom there. And there's always a balance in terms of what to do. I mean, obviously, I mean, personally, I'm a little bit frustrated about the whole buyback situation as well.

I think that's a generally pretty good mechanism in terms of returns for shareholders. But once we flow through to the second half, the Board will look at that sort of payout ratio and probably look at that in the sort of low to mid-50s range. That's what you would probably expect to see. And then as for '27, that will depend on what other capital we may deploy elsewhere, et cetera. So hard to give you a full prediction on that.

Yes, that's fair. The second one was just in relation to the 20% target for EBIT ex MI margins. Can you just remind us when you were targeting to actually achieve that at a group level?

Yes. Well, when we first thought it would sort of take us 2 to 3 years to get there, Andrew. And I think that's still sort of relevant. So it's going to be sort of FY '28.

Yes. And then the final one was just on the tax rate. You're at the lower end of the full year guide in the first half on a management accounting basis. Is there anything unusual that's going to cause that number to step up in the second half? Or should we assume that, that effective tax rate guidance for FY '26 is pretty conservative?

Look, I think it's reasonable. I wouldn't say it was necessarily conservative. Based on how we're seeing the business, how we're seeing the first half, I think the guidance is reasonably accurate. There's nothing out there that I think that could materially change things.

The next question comes from Siddharth Parameswaran with JPMorgan.

A couple of questions, if I can, please. First is just on just the transactional revenues. And maybe if you could just make some comments on where you think we are in the cycle on Issuer Services and also share plans? And also just how -- what you're assuming when you target this 20% EBIT ex MI margin target in FY '28, just whether you're expecting those transactional-related revenues to normalize lower or continue at these levels?

Yes. So if you look at the transactional elements across the different business lines, so you start off with Issuer Services. The transactional sort of fees within that really are corporate actions and a little bit of SRM and shareholder paid fees. In terms of where we're at the cycle, as I mentioned before, corporate actions are, I would say, below cycle. They are improving, as I said, but I think there's more to go there.

There's always a bit of a lag between that component. The SRM component, which is stakeholder relationship management, that's kind of big large proxy jobs. It's a little bit harder to predict where we are. It's not really a cyclical component on that perspective. As far as plans are concerned, you'd say that the transactional revenues would be above market cycle if the book was the same size as what it was 2 years ago. But the thing is the book is considerably larger, the number of units being issued that are larger.

So I would not say that we're at the top of the cycle with there. I mean, clearly, there's equity markets in most sectors are sort of doing okay. But it's a larger size of the book that will actually continue to drive that. So we're pretty optimistic on sort of maintaining and, in fact, growing some of that. And it's also a very diversified book. We're not -- it's not just all tech stocks or all health stocks or all resource stocks. It's very diverse, both from a sector perspective, geography perspective.

So I think I wouldn't say that we're at a high from a sort of cyclical perspective there. And then finally, although it's technically not a transactional issue, but just to go on to the theme of the cycles, I think that debt issuance is recovering. We were below cycle on a number of these structured products, and you can see that sort of increasing. And part of what we did in one of the earlier slides in terms of showing that sort of 7-year track record is through these cycles, right, on the track record and the CAGR growth. But anyway, so a little bit of a mixed bag sit there, but that's my perspective at the moment.

And sorry, just for the FY '28 targets, just what you're assuming versus where we are today?

I'm not assuming any significant change to these transactional volumes to be able to meet targets for '28.

Yes, similar point in the cycle is your assumption. Yes. Got it. Okay. Just one other question then just around the margin income side. So you've pushed your banks hard again. It seems like for the last while, we've had the hedged yield continue to surprise on the upside. The recapture rate has now improved on the non-hedged side.

Just wondering if you could comment on whether you feel that this is the new steady state, whether there's more you can do in terms of either lengthening tenure, extracting more yield on the hedge book. And also on the recapture rate, whether that's the 95% odd that we're at now is the go-forward level, whether there's more you can do there?

Yes. So look, Sid, in terms of the recapture rate, 95% is probably as good as it's going to get. There is a -- we get a better -- a lot of it will come down to the geographic mix. And so we get a better recapture rate in the U.S. versus, say, Canada and the U.K. And so if we saw more swing towards the U.S. versus the U.K. and Canada, then we might see the recapture rate increase further again.

But I think that in reality, it's not -- I don't anticipate the U.S. becoming more heavier in the sort of -- in the portfolio than it is currently. In terms of the hedge rate, that's really going to trend broadly in line with the 5-year swap rate. That's about 3.5% at the moment. I don't think -- because of the nature of the book, it's going to tip over sort of 3.5% in FY '27. I think it perhaps peaks around 3.6% given where the current swap rate is. And then it will sort of stabilize in that sort of 3.4% to 3.6% range for the next 4 to 5 years.

The weighted average life of the book is -- was 5 years at the end of December. It's tipped up a little bit in January because of some trades that we've done. But we target a weighted average life between 5 and 6 years. So we're not really looking to put any more tenure in at this point.

The next question comes from Ed Henning with CLSA.

Just the first one, can you highlight where you've seen and where you can see in the future average fee increases either by rolling out additional products and seeing some more uptake there or increasing pricing to improve margins going forward?

Yes. So look, I think improving margins is going to be about fees and then also about cost to serve. We are in a competitive marketplace. But I think if you look at Issuer Services, for example, some of the things that we're trying to build out that sort of one-stop shop around entity management and Investor Relations beneficial shareholders and then shareholder advisory, putting that all together, which will be quite a unique offering into the marketplace and drive sort of the fee structures from that more sort of digitization of some of the interactions will lower the cost to serve, et cetera.

So the margin expansion is going to come from clearly sort of the top line fee elements where we can and also back-office efficiencies. So we look at that across the board. And we track the average fees per client, the average fees per either shareholder or employee, the per deal fee, all that type of stuff. We track it quite heavily and continue to try and sort of push the boundaries on that, notwithstanding the competitive markets we're in.

And then just the second one, maybe just touch on the balance sheet and acquisitions. Look, I understand you've talked about being patient. But can you just run through at the moment, what are the hurdles to deploy capital? Is it just the price for assets? Is rates falling in the U.S. helping at all? And are there any areas that are looking more promising at the moment or just still kind of scratching around?

Yes. Look, it's a good point, Ed. I think one of the things, if you look at from a Corp Trust perspective, it's really about making sure that we've got the appropriate regulatory approvals to put us in the best possible position to actually pursue these acquisitions. So that takes some time to go through that. We've got our applications in for various jurisdictions around the world, and that really makes us a strong counterparty. So you've got to be patient for that. But it is ironic that sometimes when there is -- if there's a market correction and prices are lower, they are the best times to buy businesses. And I think I look at lots of other businesses around the world.

I look at Computershare in history as well. And I've seen that sort of pressure come down and go out and buy at high price. That's how you're going to destroy shareholder value. So patience is key here. And we remain committed to the disciplined framework for M&A. And that really is where we will get the confidence to drive long-term shareholder value on that patience. But a number of things come across. Prices are still high for certain types of assets. And so again, patience. That's the key.

No, that's great. And just to clarify on the approvals that you're seeking, is there any time lines for the European and stuff approvals to come through. Or is it a bit uncertain?

Look, I think that we have a main EU application in, which has been done through the Netherlands and also our applications in with the FCA in the U.K. They generally take 6 to 12 months to go through that process. So look, I would be a little bit disappointed/frustrated if that's not there by the end of this calendar year.

The next question comes from Julian Braganza with Goldman Sachs.

Just the first one. In terms of the cost-out programs coming to an end, just more broadly, how are you thinking about medium-term BAU cost growth? And also just secondly, any thoughts on implications and further cost-out benefits that could come through from embedding AI within the organization?

Yes. So look, I mean, just on the cost-out programs, these were sort of large-scale announced trackable product projects. And it doesn't mean that they come to an end. We're not going to be doing anything, I can assure you, right? But just in terms of how we'll structure it internally, it will be a bit different. And I do think that implementation of new technologies will help us reduce costs. There's no doubt about it. I mean you mentioned AI. It's certainly a technology that will provide various degrees of efficiencies across the group. Like lots of companies are sort of talking about it.

We have projects in place. The length of time it takes developers to build something in an AI model is coming down, and that means that your time to market new products gets there or you require sort of less sort of on the tech side. You've got the other products and tools that you can put in, which will also drive that. So at the moment, there is some certainly challenges in terms of getting a return on your investment on some of that big AI stuff. Some of the tech costs that we are is us investigating these.

We have multiple projects vying for attention, and it's sort of my job and Nick's job to sort of assess these from an investment perspective. And these are both revenue-generating and cost reduction opportunities. But we're not sort of flying the flag, but I certainly think these technologies will allow us to improve margins going forward as well. So yes, we'll certainly be a deployer of these techs.

Okay. Great. And then secondly, it looks like part of the cost saves are also coming through in the form of revenue synergies. Can you maybe just talk a little bit about that. And also just any revenue synergies that should come through in FY '27 and which divisions that's being floated up into?

Yes. The revenue synergies, Julian, you'll see on sort of Slide 38 that we called out that some of the benefits from the CCT or the Corporate Trust program are coming through in the form of revenue synergies. That's really in new product offerings that we've been able to kind of develop through the synergy and integration program that we've been running. And so when we called out $80 million of overall program benefits from that acquisition that we included in that $80 million target some revenue synergies and benefits. And you can see in FY '26 first half is about $5 million or so of revenue benefits, and you probably sort of see something similar in the second half.

Got it. And then lastly, just in terms of margin income and specifically balances, can you maybe just talk to medium-term upside to balances? I know previously, you were flagging about $3 billion to $5 billion over the next couple of years. Is that still your view given where we're at? We're starting to see green shoots of recovery in corporate activity? Is the improvement in balances matching up to expectations. Or is there a bit more runway relative to that previous guidance that you given the market?

Yes. Look, I mean, I think if you look over the last 3 or 4 halves, you'll have seen that balance has steadily inched up every single half as rates have dropped down. So there's certainly a bit of a trend there. If you go back and look over history, then you only have to go back to sort of FY '21, and you'll see that overall balances were about $3 billion to $4 billion higher than they are today. So certainly, we are at least 10% off the peak.

I think as Stuart already talked about earlier, corporate actions volumes were pretty subdued really from our perspective in the first half. And so both a pickup in corporate actions activity and ongoing growth recovery in debt issuance should drive those balances higher over the medium term.

The next question comes from Andrei Stadnik with Morgan Stanley.

Can I ask my first question around the Corporate Trust? So you noted stronger mandates, particularly in the higher-margin structured products in the half. How do you view that unfolding over the rest of the year?

Look, I think that there's definitely been sort of momentum across these ones here. Just in terms of the market, RMBS issuance up 35% commercial mortgage-backed security, up 5% in the market, so probably a little bit more room there. CLO issuance up 10%, asset-backed securities up over 35%. So there has been some pretty good U.S. debt issuance volume come back. So -- but that was recovery, right, because it came to -- it dropped for a while.

So there's nothing that I can see in the short term that won't sort of change that in terms of as we move through into the second half. I mean there's still a lot of sort of debt being issued. And it's always part of the underlying sort of structural growth of our Corporate Trust businesses. There's no doubt about it that it's elevated, but it's elevated because it's doing catch-up. So I think that it should continue through to the second half.

Including that favorable mix to structured products?

Yes, I think so, yes.

And look, my second question, just one slide earlier on Issuer Services on Slide 20. You showed some very strong Registered Agent units under administration growth about 10%. Can you talk a little bit about what's driving that? And then maybe also just what are the differences for the trends in direct versus partnerships?

Yes. So Registered Agent business, I mean, it's fundamentally the registering legal entities across all the various states in the U.S. And some of that customers do directly through us. Some of them do it through large-scale accountancy firms, et cetera, where we have relationships with, which is kind of like an indirect.

So look, it continues to grow in terms of number of entities. I mean in the background on that business, we've been building out new technology capability because it is a lower-margin business than core registry. And we're working on the integration of that -- some of these systems -- newer systems to lower the cost to serve. And our real focus there, not only is just growing entities, it's really actually improving the margins in that business and scaling it. So it has a track record of continuing to grow, but it's got somewhere to go there. And I also think there's some inorganic opportunities that will come down the road on that particular business as well that will help us with some of that scale. But that's really sort of entity management.

I'll now hand the call back over to Mr. Irving for any closing remarks.

Yes. Well, listen, thanks so much for joining us. I think in summary, good start to the year. Businesses have momentum into the second half, and it is encouraging to see some of the recovery in some of that more market-sensitive activities. But I do think there's more to go. We did give a modest upgrade to the full year guidance and a nice step-up in the dividend for our shareholders. But I think importantly for me, the operating businesses are performing consistently and predictably, which really gives me that confidence for the full year and beyond.

We talked about the pursuit of attractive acquisitions. As I mentioned, answering the question, patience is key. We remain committed to our sort of frameworks and confidence we'll be able to drive long-term shareholder value with these in the future. But I can assure you that in the meantime, we're going to focus on driving organic earnings growth and consistent high returns regardless of the interest rate market. But anyway, thanks so much for joining the call, and I really look forward to meeting with many of you over the coming days.

Well, good morning, everyone. Glad to see the sun has come out today for Computershare's Annual General Meeting. I am Paul Reynolds, I'm the Chair of Computershare, and I welcome you to our 2025 meeting. We're delighted to offer our shareholders and proxy holders the choice of participating in today's meeting in person here at our offices in Yara Falls or via the hybrid meeting platform. The AGM is an opportunity for shareholders, whether attending here in person or through the online platform to hear from us and to put questions to the Board and to the external auditor.

There is a quorum present, and I therefore now declare the meeting open. Let me commence our business with some introductions. Next to me here. First in the line there is Computershare's President and CEO, Stuart Irving. Then we have the nonexecutive Directors present today, Tiffany Fuller; John Nendick; Abi Cleland; and last but not least, Joe Velli at the end there. Unfortunately, not able to be with us today is Gerrard Schmid, our Canadian base Director who is undergoing a medical procedure.

I also want to welcome to the meeting, our Group CFO, Nick Oldfield, he's up front here. Group General Counsel and Company Secretary, Dominic Horsley, the side here. and upfront Marcus Laithwaite from PricewaterhouseCoopers, our external auditor. And Marcus is available to answer any questions you have about the conduct of the audit of Computershare's financial statements, the preparation of the content of the auditor's report, the accounting policies adopted by Computershare in the preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit.

Information on how to access the Notice of Meeting was distributed to all shareholders, and I'll take that notice of meeting as read. For today's meeting, I will address the questions together after all the items of business and proxy positions have been presented. So online attendees can submit questions at any time and to ask a question, select the Q&A icon, type your question into the text box. And once you finish typing, please hit the send button. Online participants can also ask a question via the audio questions line and instructions on how to do so are set out on the platform.

Voting today will be conducted by way of a poll on all items of business, and I will shortly open voting for all resolutions. If you're eligible to vote, once voting opens, press the vote icon and all resolutions will be activated with voting options. And to cast your vote, simply select one of the options. There's no need to hit a submit or enter button as the vote is automatically recorded at that point. You'll receive a vote confirmation notification on your screen. You can't change your vote up until the time I declare the voting closed.

For those attending the meeting here in person and who are eligible to vote you can scan your QR code on your attendance card with your mobile device at any time after I open the voting. And this will take you to an online voting page on your phone or your device. To cast your vote, simply select one of the options on the screen. There's -- again, there's no need to hit or submit or enter button as the vote is automatically recorded, and you will receive a vote confirmation notification on your screen.

And finally, if you don't have a mobile device, you may complete the voting items, the old-fashioned way on the reverse side of the attendance card. So I now declare voting open on all items of business. I'll give you a warning before I move to close voting, which will be towards the end of the meeting. May I also say I also appoint Michael Hutchison of Computershare Investor Services on the left here as the returning officer.

So the business. Computershare delivered a strong performance in financial year 2025. We've made good progress executing our strategies to deliver a higher quality, more straightforward Computershare, which is able to deliver stronger levels of earnings and return on invested capital through the ups and downs of the business cycle. Now as you may remember, we report our results in and is seen here in U.S. dollars and in constant currency.

Highlighting the results. Earnings this year were slightly ahead of guidance. Management earnings per share increased by 15% to around $1.35 per share. Across our business, we saw an increase in client fees which are recurring. We also some -- we also saw some emerging recovery in our more market-sensitive events and transaction revenues which we have anticipated from the somewhat lower interest rate environment that we've seen.

Margin income was also resilient, down 3% in the moderating interest rate environment. But I think that demonstrates our limited exposure to short-term interest rate movements. So these things, combined with disciplined cost controls, we're able to drive operating leverage and expand EBIT margins across the group when we converted those earnings into over $700 million -- $780 million of free cash flow. And this cash flow enables us to invest in products and technology, enables us to balance -- strengthen our balance sheet and increase rewards to shareholders. On that point, the total dividend per share for financial year 2025 was a new high of AUD 0.93 per share, an increase of 13% over the prior year.

Look, I'm very pleased to say that this performance, the strong performance by Computershare is a direct result of our strategy that we've talked about over the past few years to simplify and focus our efforts on the core businesses of Issuer Services of Corporate Trust and of employee share plans. We've progressively disposed of noncore businesses. We've invested in technologies and deployed our capital very carefully, and we've kept our continued focus on managing our costs. And all of that gives us the returns and the balance sheet capacity to supplement organic growth with selective acquisitions that can bolster those returns.

The strategy is consistent, and that's the Computershare way. But of course, although having a clear strategy is very important, the really tough thing is delivering against the strategy, delivering consistently. And the Board has been really pleased to witness Computershare's consistent ability to deliver its goals, whether there be new product introductions, efficiency plans, new acquisitions or integrations, we tend to hit the plan, and that's the key thing. Our strong results really are founded on the determination, the hard work and the professionalism of Computershare's people right across the globe.

Now in our annual report, we lay out because we see here what ESG means for Computershare. Put simply, we understand and we really respect our social obligations. We aim as a company to do the right thing and support our employees, our clients and the communities in which we operate, and we're committed to using less carbon, to having greater diversity across our organization and contributing to communities. And we regularly assess our work against externally measured metrics.

And I'd like today to highlight one partnership where we think we are making a difference. The World Youth International School in Nepal, we supported this project for several years and with the aim of delivering improved education standards for 750 children each year. We've built a boarding houses to facilitate attendance. We've provided new school buses to transport students to school and supply computer and network infrastructure for the school. And next year, we're opening an IT college that will enable 50 students to enroll in a bachelor of IT program, which will fund the school's operating costs going forward. We also support several local charities across the communities in which Computershare is active in. So we're proud of that progress. We're proud of the commitments we make and the participation of our people. But as always, there is more we can do here.

So finally, let me close by reiterating how proud we are of this special company. And I'd like to thank Stuart Irving for his leadership, my Board and the fellow directors. the management team and colleagues right across the group for your hard work and commitment. Thank you for your contribution to Computershare's culture and performance. And thank you, our customers, our shareholders for your trust and your support.

And on that, I'll hand over to Stuart.

Thank you, Paul. It's always a great day to be here at our AGM. And I'd like to add my welcome to all our shareholders and guests. And as I said, it's always a very special day in the calendar for me. Now we do have some shareholders who are unable to attend today, but they've sent a couple of nice notes in. So please indulge me and I'll read one out. Now this one is from Mr. Chris Morris from Templestowe, now Gold Coast. It reads, "Keep going Irv, p.s. work harder, bigger dividends, please." Nice. And then we have another one here from Mr. Simon Jones from Elwood. "Miss you guys. Do you think the proxy advisers would classify me as independent now?" I'm not sure about that one. Anyway, lovely notes and appreciate it. Thank you.

Now as Paul touched on, FY '25 was another impressive year of growth and profitability for Computershare. After a sustained period of performance and the execution of our key strategies, let me talk a little bit about Computershare as it is today. Now Computershare today is really focused, high-quality capital-light business anchored around 3 core divisions: Issuer Services, Corporate Trust and Employee Share Plans. Now these businesses enjoy long-term customer engagements. They generate high-quality recurring fee revenues and are underpinned by positive industry growth trends. Now these are the majority of Computershare's revenues. Now some of our businesses also have event and transaction-based revenues such as corporate actions and whilst less predictable, they occur on a regular basis and enhance our earnings.

Now margin income, which is really the bank interest we receive as we distribute or hold client cash, also increases our revenues and is a consistent feature of our business model. And margin income also gives us that important flexibility in how we can price a service that better suits the client and delivers our required returns, and almost all of our businesses have some form of margin income element. Now importantly, these businesses can deliver strong returns through multiple economic cycles. They are built to endure. They are built on the same foundations, which is our world-class capabilities as a trusted, market-leading, technology-driven servicer of financial assets, and they are built to scale across major global markets.

Now this page -- moving on to really outlines what I would say is our key long-term value creation strategies at Computershare. Now our goal is really to deliver earnings growth through the cycles. Now many have commented on whether we can grow earnings in a declining interest rate environment. FY '25 was proof that we can do that and FY '26 will be more of the same. The growth in recurring fees as well as our transactional revenues and balanced hedging strategy really underpin that growth despite the reductions in interest rates.

Now another key strategy is really to improve the quality of our business, therefore, the consistency of earnings. Now one of the things that I really love is that there is a portfolio effect in Computershare, having many clients in many sectors and many markets provides an element of protection in a fast-moving and at times, uncertain business climate. Now we are also deepening our moats at Computershare. We're investing in new technologies and innovations to drive both growth and efficiencies across all parts of our businesses.

Now as you would know, we are and will remain a technology-focused company at heart. Another key value driver is our world-class capability in executing large and complex integrations and technology projects. Now that skill will continue to be critical going forward. Now these teams are really the unsung heroes of the group, and I really want to thank them for their long hours and commitment to completing these projects as planned.

Now we have a very enviable track record in that area. and that execution strength has really become a key competency across Computershare. And I think that it gives the Board great confidence as we consider new acquisitions and growth opportunities. Now our capital strength is also an advantage. We have a capital-light model. We have strong cash generation and we will maintain a robust balance sheet to support our business strength, but also to reward shareholders. So in conclusion, we have a clear plan to drive long-term value creation at Computershare.

Now moving on, let's just turn to the performance of the 3 core businesses: Issuer Services, Corporate Trust and Employee Share Plans. Now as Paul said earlier, pleasingly, each delivered revenue growth and higher earnings in FY '25. Now Issuer Services and -- Fiona Chalmers, who runs our issuer services globally is in the room here today. Now registered maintenance, which is one of our largest business within Issuer Services grew revenue by over 3%. EBIT increased over $450 million, and EBIT margins were broadly stable at 36%. We also saw increased activity across both issuer and shareholder paid fees. Corporate action revenues also increased nicely with higher average fees per deal, and that really helped drive the growth.

And at Computershare, we are starting to see the green shoots of increased IPO activity, particularly in Hong Kong, which has always been an important and attractive market for us as far as IPOs are concerned.

Now moving to corporate trust. I think that business really continues to strengthen. Last year, revenues increased by over 4%. EBIT was up over 7% and margins expanded by 140 basis points to almost 53%. Now we see a 10-year plus growth runway here. And whilst we remain patient for acquisition opportunities, we continue to make great progress building out our credentials and expanding our regulatory footprint to be ready for when the time arises.

And then Employee Share Plans, that delivered another impressive result. And Francis Catterall, who runs our Employee Share Plans business globally is also sitting. Nice to see you sitting next to Issuer Services and having the love in there. Fantastic. Now our employee share plans business, as I said, impressive results, 9% growth in revenues, 15% growth in EBIT and 25% growth in EBIT ex MI, it's a real success story when I reflect on that business. The success of the business is much more to do with our ability to execute the plan that Francis and I put in place 5, 6 years ago. And that's nothing to do with current equity market levels. We set out to enhance our technology, improve our customer offering and build scale and our initial plans were actually to deliver over $100 million of EBIT. I'm delighted to say that we've outperformed on every measure.

So where from here? Now we see long-term growth in equity being used in remuneration. We have some of the best tech in the market. Our assets under management are increasing, and we're winning market share. And I think they are great lead indicators of future growth.

Now moving on to the [indiscernible] slide. Let's see how our FY '25 and our performance really translates into shareholders' returns. Now over the past 3 years, Computershare has generated over $2 billion of cash flow, and that's U.S. dollars, not Aussie dollars. Now the capital expenditure costs to maintain our IT, hardware and office fits out are exceptionally low, particularly for a group of our size. Now it is important to differentiate our CapEx spend from our technology investments and our innovation. Now these technology investments are serious commitments at Computershare. Now we have close to 1,700 IT colleagues in the team. Now just quietly, we're one of the larger technology companies in Australia. And at Computershare, we've always respected the importance of dividends as well for our shareholders.

Now 2 years ago, in FY '23, we distributed some $244 million to shareholders. In FY '24, that number increased to $312 million. Now including the buyback, we returned $523 million to shareholders in FY '24. And in FY '25, the dividend increased to $334 million, and total returns, including the buyback were $613 million, a rise of 17% on the PCP.

Now our AUD 750 million buyback program to enhance returns is also now complete. And I would just say that under current Australian tax legislation, any future share buyback programs would not be a tax-efficient way to reward shareholders and therefore, unlikely in the short term. So as a result, the Board will review our dividend payout as we prepare for the February half year results.

But let's move now to this new financial year FY '26. It'd be fair to say that we've had a pleasing start to the new financial year. We're affirming full year earnings guidance. Back in August we said that management earnings per share is expected to be around $1.40 per share for the year, a lift of around 4% versus the PCP despite the lower interest rate environment. With 4 months trading under our belts, we have increased confidence in this guidance. We expect around 47% of earnings in the first half and the remainder in the second half. Now to date, what we are seeing is revenue ex MI is slightly up against our initial expectations. Corporate action activity is beginning to strengthen. Debt issuance volumes and corporate trust are improving and employee share plan trading is holding up.

Now importantly, the increase in activity levels is generating higher cash balances. Our average cash balances have increased to $30.6 billion, with most of that increase taking place in corporate trust. And although interest rates and therefore, yields are lower than we anticipated due to the timing of interest rate cuts, our guidance on margin income is still intact at around about $720 million. So there's a lot of detail on yields and balances in the slide pack that we put out today. We'll not go through it here in the room. But I will also remind you that it's very early in the financial year, and Nick and I will be providing further updates in February at our half year results.

But let's move beyond short-term earnings guidance and really focus on some of the topics that will shape Computershare's next chapter of growth. Now these are topics that we are evaluating and considering as we put in place foundations for enduring performance through cycles. I'm pleased to share this longer-term perspective. Now recently, we have been working with the crypto task force within the SEC securities regulator in the U.S. Now this regulator has been charged with the mandate to provide practical policies and clear rules of the road for the issuance of custody and trading of crypto assets and also continuing to discourage some of the bad actors from violating the laws in this space. Now as a market leader in the security space in the U.S., Computershare does have a seat at that table when discussing important issues such as the tokenization of equity.

Computershare supports these promising advancements. But we prioritize the need to protect the corporate issuer stability, preserve investor choice and most importantly, maintain the integrity, confidence, trust and predictability in U.S. financial markets. And working on behalf of our issuer clients, we do support issuer sponsored tokens as a secure form of ownership for shareholders. Now these tokens would have complete rights and benefits of registered ownerships. And we would like to see tokenized derivative securities issued by third parties over a custody holding and the listed issuers of securities really be distinguished from the listed issuer of themselves and their securities with clearly different ISEs and stock codes and include very specific disclosures for investors against the nature of their ownership rights and also security terms.

But as you can see, we are deeply involved in policy shaping and we believe that there will be long-term positive opportunities here for Computershare. But there is a super long way to go on this. and these issues are complex because financial markets are complex. But as of our Computershare intend to stay at the forefront of this innovation. Another area of focus for the group is around quality of earnings.

As we near the end of our acquisition integrations and large-scale cost-out programs, you will see that group management adjustments to earnings will decline sharply. These adjustments should drop in FY '26 versus the PCP and reduce again the year after. And they will be largely eliminated by the end of FY '27. So just as we focus on growth and the consistency of our earnings, shareholders will begin to see the quality will continue to improve, too.

Now a question I get asked quite a lot, let's discuss your acquisition pipeline. Now at Computershare, we have a clear list of the assets that we would like to acquire, and we're proactively in dialogue with vendors, but I will promise you that as a company, we will remain disciplined to make sure we buy the right assets at the right price. Any other course of action is likely to destroy shareholder value. Now at Computershare, we have a very strong track record of acquisitions, and we take that commitment very, very seriously. So I say to all shareholders, please be patient and good things will come.

Now last year, on the 30th anniversary of our listings on the ASX, I talked about the next 30 years of growth and the opportunity for our group. Now that's not just idle talk. Within the group, we are reviewing our technologies, we're looking at our regulatory approvals and structures as well as our organizational capabilities from the top down to really deliver the next chapter of growth at Computershare. But what does that actually include?

Well, it's going to be the safe deployment of AI across the organization and a refresh of back office platforms to drive scale and efficiencies. We're establishing new regulated entities across multiple jurisdictions to improve our positioning as an acquirer of assets in these locations. And we're also assessing our capabilities and our capacity across the group to deliver that next chapter of growth. Now they truly, truly are exciting times here at Computershare.

So in conclusion, we will continue to build a high-quality computer share that endures. As I said, a business that can perform and deliver superior returns across multiple cycles, a business built on trust, technology, long-standing client relationships and execution capability. But how do we measure this? Well, through the cycle, this capital-light Computershare should be able to deliver 30% EBIT margins and 25% return on invested capital, excluding M&A. We generate positive cash flow and we'll maintain a strong balance sheet, and we'll continue to invest in our businesses and reward shareholders. Now it just remains for me to say a huge thank you to all the Computershare team for all their contributions and also to our customers and our shareholders for your trust and your support.

And with that, I'll hand back to Paul. Thank you very much.

Thank you, Stuart. It's a great run through. Look, I said at the start of the meeting, we'll answer all questions at some time -- at the same time, once all of the items of business and proxy positions have been presented. And we'll be starting those questions shortly. So let's now run through the formal items of business. The first item of business relates to the tabling of the company's financial reports for the year ended 30th of June 2025. If you have any questions concerning the financial statements of the company or have a question for the company's auditor, we will address them during the Q&A session, which will commence shortly.

So I'll now proceed with the resolutions to be considered. Any undirected proxy votes given to the Chairman on Resolutions 3 and 4 will be voted in favor of the relevant resolutions. Voting will remain open, as I said, during the resolutions and I'll provide you with a notice when the polls are about to close. We'll move to consider the second item of business, now being the reelection of our Director, Tiffany Fuller. Tiffany is due to retire from office and being eligible presents herself for reelection. The Board, in the absence of Tiffany Fuller unanimously supports her reelection. And before we move this resolution, Tiffany will say a few words in support of her election. Tiffany.

Thank you, Chairman, and good morning, everyone. It's been a privilege to serve as the Director of Computershare and I seek your reelection today. I bring over a decade of top 50 public and private board experience across financial services, technology and transformation, funds management, property and consumer underpinned by deep financial stewardship, strategy, governance and risk management expertise. I've chaired the audit and audit risk committees on all boards. This background has enabled me to contribute a disciplined analytical and independent perspective to board discussion. I've had a multidisciplinary executive career across -- with developed skills across accounting and corporate finance banking and treasury, M&A, consulting and investment disciplines.

I'm a qualified chartered accountant and a fellow of the Institute of Company Directors. As many of you will know, I recently chaired the Group Risk and Audit Committee for a number of years, which has given me broad and deep insight into the global business through a period of material change and growth. This role is now in the very capable hands of John Nendick as part of orderly Board succession planning. As Irv said, Computershare is emerging from a high-change agenda, driven by a number of material acquisitions in plans and corporate finance and major transformation programs across technology, finance and treasury, which I have been close to through my committee role. With a strong balance sheet and strategic optionality together with opportunities for advancement in product and operational efficiency, the company has a positive outlook for ongoing growth, which I believe my deep corporate knowledge and skills can continue to contribute to.

I remain deeply passionate about Computershare as an outstanding Australian success story and one that has delivered over the long term for shareholders by staying disciplined about strategy and expertly leveraging its core competencies and technology capabilities globally. I will continue to bring my experience, integrity and energy in supporting what is an extremely high-quality management team and a company with an enviable corporate culture, one I'm proud to be associated with. Thank you for your time today.

Thanks, Tiffany. So I now move the reelection of Tiffany Fuller as a Director of the company. The resolution and a summary of the votes received before the meeting now appears on the screen.

The next resolution relates to the adoption of the company's remuneration report. The Corporations Act requires a resolution to adopt the remuneration report is put to the vote at the AGM. The vote is advisory only and will not bind the company or the directors. The report sets out the policy for the remuneration of the directors, the CEO and other designated senior executives. It includes information on how remuneration is structured as well as the quantum for the period ended 30th of June 2025.

Noting that each director has a personal interest in their own remuneration from the company, the directors recommend that shareholders vote in favor of adopting the remuneration and report. So I move the adoption of the remuneration report. The resolution and a summary of the votes received before the meeting now appears on the screen.

Okay. The next resolution is to approve a grant of performance rights to the CEO, Stuart Irving, under the terms of the company's long-term incentive plan. Approval is requested from shareholders under the ASX Listing Rules to authorize the company to grant equity securities to the CEO under an employee incentive scheme and details of the terms of issue of the equity securities are set out in the notice of the meeting. The Board, in the absence of Stuart Irving, unanimously supports the grant of performance rights to the CEO. I now move the grant of performance rights to the CEO. The resolution and a summary of the votes received before the meeting now appears on the screen.

Okay. That concludes. Now I have tabled all the items of business to be considered at the meeting. We'll open the meeting up to questions. I think Dominic will receive some questions from shareholders in advance of the meeting, which I'll address first.

That's correct. The first question we received was from shareholders, William and Robin Moxie. They said, "I am a New Zealand shareholder and note you have a New Zealand subsidiary. Why do you not pass on New Zealand imputation credits to dividends paid to New Zealand shareholders. New Zealand imputation credits are similar to franking credits in Australia."

Yes. So thanks for the question, William and Robin. We do indeed have a New Zealand subsidiary, and we do have the capacity to accumulate New Zealand imputation credits. That is, however, a really small part of our global footprint. So our credit balance is negligible at this stage when considered against our shareholder register. However, we will continue to monitor this, and if we accumulate sufficient credits, we'll take a further look.

Thank you. We've then got 2 questions from shareholder, Natasha Lee. The first of these is, first, I would like to congratulate the Board and the team for outstanding results. While the business is highly reliant on the U.S. operations, which generates 56% of revenues and 50% -- 57% of EBITDA, the outlook is dependent on U.S. interest rate cuts that first happened in October. Apart from interest rate cuts, the political situation in the U.S. is becoming increasingly concerning. How is the company managing these risks and to what extent has this been factored into the outlook?

Thanks, Natasha. I mean, firstly, thanks for the congratulations. I mean, the Board clearly agrees with you on the performance that we've set out today. But your question is about looking forward. And Stuart set out the outlook, and we've reaffirmed our guidance for our financial year '26 of management EPS of around $1.40 per share. And that guidance takes into account the interest rate cuts that we've already seen as well as further cuts that we anticipate and have been forecast over the rest of the year. So we anticipate those cuts as we make the plan and make the guidance. So already taken into account.

And as for the broader outlook, the U.S. is a major market for us, obviously, and we pay an awful lot of attention. But the good news, again, Stuart talked about it, is that corporate activity is beginning to strengthen in the States. Debt issuance and corporate trust is improving, and that's all helping contribute to a positive outlook. So guidance affirmed -- question noted, guidance affirmed, we take into account, we're very, very careful about all the market signals that we can bank on and factoring those into our forecast.

Thank you. The next question from Natasha Lee is with only 2 female nonexecutive directors, this represents around 28% of the Board, which is below best practice of 40%. Will the Board commit to achieving at least 40% female representation. And in addition, the Board lacks diversity in other areas, and I ask the Board to commit to improving other forms of diversity on the Board.

Look, it's a good question, Natasha. Thank you. You may have spotted that one of our directors Lisa Gay unexpectedly resigned for personal reasons earlier this year. And when that happens, your ratios go up and down just overnight. So we moved our female representation from just under 40% to just under 30%. Our stated board commitment is to have female representation of at least 30% as we confirmed in our corporate governance statement, and we certainly expect to be back in excess of that point by the end of this financial year.

And diversity more broadly, we aim to recruit the very best from all the talent pools available, the widest talent pool possible. And we utilize our recruitment process, that's structured to provide a level playing field from whatever gender, sex, race is present. So we think we have a very fair approach to doing the right thing in recruitment and getting the right balance. Dom, any more?

That's it from questions before the meeting. We have had a few online.

Well, should we do that or in the room first?

We can do the room first.

Anyone attending here in person who wishes to ask a question. Stuart?

Thank you, Mr. Chairman. With the sale of the U.K. mortgage services business, do you -- does this mean that Computershare will completely remove themselves from that area? Or are there some other business components in that sphere that need to be addressed?

Okay. Well, I think maybe we should hear from Stuart, the other Stuart. Do you want to answer that one?

Thanks for the question. Yes, we sold our U.S. mortgage services business last year, and we recently announced the sale of our U.K. mortgage business. That hasn't closed yet. I anticipate that to close sometime in the first half of 2026, subject to regulatory approval. And at that stage, as far as mortgage servicing is concerned, we're completely out of it. So not a core business, and it's gone.

Any other questions in the room? Well, you've got the microphone?

Yes, I have. [indiscernible] So I can't see without my glasses on. Can you please comment on the role of communication services and utilities operations will play into the future? Or is it seen as an overall business unit for growth? Or is it seen as a service type industry?

It's probably good to know a little bit about the history of Computershare Communication Services and a big part of that history is sitting 2 seats along to you on the left with Mr. Dick Kirby, who is -- Computershare bought the business that Dick was CFO in the '90s. And the reason being is Computershare obviously distributes a lot of shareholder communications. And we were using third-party companies to do the mailing and the distribution of that. And we were having quality issues. And so in the '90s, we acquired a portion of a business called Chelsea Images and Dick worked there along with another couple of partners. And we subsequently acquired all of that, and that became essentially our print mail and digital communication platform for Computershare all around the world.

So as Computershare expanded around the world, the communication services operation did. It's one of the businesses that I love because it still has sort of big factories and warehouses with complicated machinery and envelope insertion thing. That's fantastic. It's worth a visit. But it's core because 50% of the revenues roughly is work that it does for the rest of the Computershare group, but we also provide services to commercial customers. So we run it as its own business unit internally, but it doesn't have its own segment reporting due to the size compared to Issuer Services, Corporate Trust.

But it is -- I've always been a big supporter because it gives us a significant competitive advantage because shareholder employee data does not leave Computershare to a third party. It's all maintained securely within there. And another [indiscernible] Mark McDougall is sitting at the back of the room, one of my technologists, actually runs entire division. So after the meeting, if you want to know more about that business, go and noise up, Mark.

My question is I presume that your risk analysis has factored in the implications of artificial intelligence on the future actions of the company. Can you give shareholders an idea of the future of AI and Computershare?

Stuart again.

Yes. Look, I touched on AI a little bit in the opening preamble for the meeting there. And it's a very interesting technology. It's -- I think there's brilliant marketing people behind it because that's all you read about. And -- but like many other technologies that have come, it will present an opportunity to build new products, enhance services for our customers, reduce the cost to serve, automate things. But again, it has to be rolled out and -- because there's lots of fear around AI and lots of sort of misunderstood things around AI.

But Computershare, we've always been a fast adopter of technology. We'll do it in a very measured approach across the entire group and look for ways to use the tech to become sort of more efficient, but just as importantly to drive revenues and create new products. So look, I don't think you'll find 50% of the heads are out because AI has come in, like you might read about in the press, but it will certainly be a very useful tool for our business leads to create new products, drive new revenues as well as do things more efficiently. So that's how we view AI. Obviously, there's concerns around the governance and data, et cetera, and we take that governance of our clients' data very, very seriously as well. So we'll not be shooting that all out into the wonderful world of the cloud and allowing everyone to access to it, I'm going to assure you. But yes, it's a very interesting tech. We've already got some AI deployments in Computershare live, and we'll continue to do so over the coming years as it progresses.

Any more questions, Stuart? Any more questions in the room? Anybody? Dom, online?

We've got 4 questions from shareholders, Stephen Mayne. I'll start with the first one. When I buy a range of Computershare managed companies in quick succession to attend AGMs, you send me a separate welcome to the company notice in the snail mail for each company. When the same thing happens with Atomic managed companies, they often send a single envelope with welcome forms from multiple companies. From an environmental efficiency and client cost point of view, shouldn't we be doing what Atomic does or do our systems not allow for aggregated mailed communications across multiple companies?

That's one for you, Stuart.

Great question, Stephen. I hope you're listening online. At Computershare, we have a number of clients who are very, very engaged with their retail shareholders, and they want to sell and customize deliveries out when people become new shareholders. So they don't want just a generic welcome to update your e-mail across multiple companies. They want to create a very personalized experience for that particular issuer.

So as a result, we tend to keep them separate because these packs, it's not a Computershare-driven thing. It's basically at the behest of the client about what they want to do. Look, I take your point. I mean, obviously, less mailings would be better, although our communications division might argue about that, Mark McDougall at the back there. But look, I take your point about those that are doing the generic one, but that's how typically and historically why it's been a little bit separated out at Computershare.

Thank you. The next question from Stephen Mayne is I used to enjoy the videos getting stuck into Broadridge, which fellow Templestow Boy turned letter writer, Chris Morris played at Computershare AGMs more than a decade ago. These days, Broadridge is a public company valued at USD 25.9 billion, and we're doing fabulously well with a market cap of $20.3 billion. Is it right that we are the 2 biggest gorillas in the broader global securities transfer and management market? What regulatory protections do Broadridge still have, which we regard as unfair and who has the power to fix this?

Broadridge and Computershare do very, very different things. If you had a Venn diagram, there's a little bit of overlap as far as U.S. transfer agency services. Look, Broadridge is an incredibly impressive organization. They provide a lot of back-office technology to the brokerage and custodian community, an area or a business line that we're just not in at all. But one of the things that they still do and have a strong market share is the structure of shareholder ownership in the U.S. means what they call the street names. So individuals who hold shares at brokerage firms, so to speak, and Broadridge provide meeting services for these shareholders where we don't. We only provide meeting services for the registered shareholders or voting services.

So yes, we've kind of popped up against them over time because they have a very sort of a strong market share in that street name there. I think with new regulations and technologies, and I was seeing -- just watching CNBC when I woke up this morning and arguments about transparency and voting and proxy advisers and all that type of stuff. But look, they're a strong competitor. As far as legislation that would have to change. There's something very technical about objecting beneficial owners, which means the companies can't see who the underlying shareholders are, it's all sort of deeply embedded in U.S. market structure. But you never know, maybe some of this tokenization of equities will shake some of that out.

The next question is, thank you for disclosing the proxy position earlier to the ASX, along with the formal addresses allowing for a more fully informed AGM debate. The only material protest vote was 9.6% against the reelection of Tiffany Fuller. Was this driven by a proxy adviser against recommendation? And if so, what was the issue? Also, will you continue with the excellent practice you adopted after last year's AGM and disclose the headcount data with the poll results so that retail voter shareholder sentiment is made public and we can better understand how much retail participation has fallen since the move away from paper after COVID. These best practices -- best practice AGM disclosures are really helpful in terms of driving this practice across the market. So well done, and thank you for that.

So was that a question...

I mean I can answer the second one. We'll be disclosing the head count results after the meeting. So we will continue with that practice. The first question was around the proxy adviser positions against the reelection of Tiffany Fuller.

Look, what just relates to Tiffany, we got a qualification from one of the advisers due to Tiffany servicing more than 9 years on the Board, along with the same CEO. And from a Computershare perspective, Paul and the rest of the Board assessed Tiffany's independence and are very satisfied with her independence. So that was really why there was that qualification. I don't think there's anything to worry about from that regard. It's just a qualification. I would agree that Tiffany is very much an independent and one of our hardest working Board members, and you got to have a view about whether you agree with all this tenure stuff. But I think Tiffany has been a fabulous Director for Computershare over the years. Observation.

That's certainly the view of the Board emphatically, Tiffany's fabulous director, continues to deliver. and always. And I think anyone who's listening to that CV couldn't help but be impressed. Thanks, Tiffany. Dom anymore?

One final question from Stephen. Our all Scottish leadership team at Computershare has been in place for the past 3 years, and Stuart Irving has been CEO since 2014. Well done for once again serving up a well-structured LTI grant for Stuart that has been supported by more than 98% of the directed proxy votes. I'm just curious as to which of our Scottish leaders is likely to exit first. And whether the LTI structure makes it very expensive for Stuart to retire. Not that there is any rush for either Stuart or Paul to exit given the company is performing so well and is genuinely one of the 5 best Australian companies in terms of carving out a successful global business that the country can be proud of.

Well, thank you, Stephen. I think a complimentary and mischievous question, all in one. But yes, we have worked well together. Stuart and I are Scotsman for a few years now. Hopefully, the results of the business as we announced today speak for themselves. But we do very honestly engage in Board evolution planning, and we have been over this week. And in due course, we all move on. But no immediate plans there, but we certainly take the subject and the planning there of very seriously indeed. Dom, any more?

That concludes, I think, 4 questions. Yes.

Okay. Well, as there are no further questions, that concludes the questions section of the meeting. I would like to advise that voting on all resolutions will close shortly. And I'll provide you with a few moments to allow you to finish voting. We see some cards being filled in, in the room, Let's wait for all the cards to be collected. Okay. If you're in the room, these are going to be collected and now done. Thank you. Can we move on, please? Voting is now closed. The final results will be advised to the ASX and also made available on Computershare's website after the meeting. Thanks all for your attendance. As the business of the meeting is now completed, I declare the meeting closed. Thank you very much.

Good morning, and thank you for joining us for the Computershare FY '25 Results Conference Call. Nick Oldfield, our CFO, is with me along with Michael Brown from our Investor Relations team. And as usual, we have released a presentation pack on our website, and Nick and I will take you through the highlights and then open up for Q&A. And just to remind you, we will be talking in U.S. dollars constant currency unless we state otherwise.

So just reflecting on the past financial year, I'd say today's results really validate our strategy. We made key strategic decisions to build a simpler, higher-quality, capital-light Computershare, a group that can deliver consistent results and increased returns to shareholders. And then our teams have executed well against these plans.

We have delivered management EPS of $1.35 per share, an increase of 15% and consistent with the guidance we upgraded in February.

We have simplified the group and recycled capital to scale our exposure to long-term growth trends. These structural growth drivers have helped us to overcome the impact of wider market volatility, particularly in the second half of the year and also mitigate the lower interest rate environment, and you can see that in the results.

Now Slide 2 shows the FY '25 results and the pro forma FY '24 comparisons. The FY '24 pro forma results exclude U.S. Mortgage Services, which we sold in May '24. Now just to be clear, the pro forma does not adjust the FY '25 results. We have simply removed the divested businesses out of the PCP for comparative purposes. And we will refer to the comparisons to the pro forma throughout the presentation, unless stated otherwise.

Now Management revenue was 4.4% higher. Management EBIT ex MI was $412 million, a rise of over 17% and margin income was resilient at $759 million, slightly ahead of expectations. The strategy to deliver a new capital-light Computershare has delivered ROIC at over 35%.

Now moving to the revenue story on Slide 4. In the year, Client paid fee revenues continued to grow nicely, up more than 4%. These client paid fee revenues are recurring in nature, typically in long contract engagements, and they account for the majority of the group's total revenue.

We have added to this chart the growth rates in these revenue streams back to '21, and pleasingly, we can see the growth rate in the high-quality client fees has outperformed event and transaction fees. And I think that also goes to the higher quality Computershare.

Event and transaction revenues were up over 13% for the year. Around April, when macro volatility spiked, we did see some clients become apprehensive and postpone transactions such as IPOs, debt issuance and M&A. Now that did impact our volumes. Certainly, some of the optimism we felt in February, disappointingly, did not come through. However, we have seen markets stabilize since, and we should see some of these events come back in FY '26.

In February, we guided to margin income of around about $750 million. We came in slightly ahead at $759 million, and margin income is down 3% versus PCP, which is a pretty resilient outcome. We had the thesis that lowering interest rates would drive more issuance in Corporate Trust and therefore, generate higher client balances. With lower rates in the second half, we did see this come through and balances ended the year higher.

Overall, margin income in Corporate Trust was down less than 1%. And we maintain the thesis and see more recovery potential in client balances across the group as rates trend lower.

Moving to Slide 5, I'll turn to the performance of the 3 core businesses: Issuer Services, Corporate Trust and Employee Share Plans. Pleasingly, each delivered revenue growth and higher earnings. Now Issuer Services delivered a solid result. Revenues were up over 3% for the year. EBIT increased to over $450 million and EBIT margins were broadly stable at 36%. Register Maintenance, our largest business, grew revenue by over 3%, and we saw increased activity across both issuer and holder paid fees. Average fees were also higher with the full benefit of previous price increases.

Now in Corporate Actions, it's an interesting story. Revenues increased nicely, up 8% and the average fees per deal were higher. However, Corporate Action volumes were actually down 2% in the year. And despite a strong start, Corporate Action volumes dipped in the second half, but we did see some recovery later in June. And I do note that the value of announced M&A deals was up by 11% at the end of June. So that's a positive lead indicator for completed transactions next year.

Elsewhere in Issuer Services, Governance Services is an area where we are building scale to benefit from these long-term growth trends. The complexity of compliance continues to increase. In Registered Agent, the units under management were up 9%. And in our Company Secretarial business, entities under management increased by 22%. And we have large addressable markets and some long-term growth runways in these businesses.

So looking ahead, the growth focus in Issuer Services is to expand our product suite across our broad client base. Also, the digitization strategy is key to this, and we have clear product road maps, delivering new apps and services this year for both clients and shareholders. And we will focus on upgrading and harmonizing our global platforms, building new products to enhance value and being a fast adopter of emerging technologies to reduce the cost to serve.

Corporate Trust continues to strengthen as a business. Revenues increased by over 4%. EBIT was up 7.3% and margins expanded by 140 basis points to almost 53%. Deal volumes across the market were down for the year, so there was no free kicks here, but we were outperforming in some of these key markets and the quality of our book is also improving, which is driving our growth. We saw net new deals at Computershare up 21% and fee revenue up 11%. And we have invested in the front office, and it's pleasing to see these results coming through.

I will also add to this point on the improvement in the mix of the book. Structured products now make up almost 80% of mandates under management, and these products typically carry higher average fees and exposed balances that generate more margin income. And we've got a clear expertise here. And as I said, we are outperforming.

Synergy realization is also on track and contributes to the business performance. We delivered an additional $23 million of savings this year, making $53 million of cumulative benefits to date, and there's another $27 million gross savings to be delivered over the next 2 years.

Over in Employee Share Plans, they delivered another impressive results with 9% growth in revenues, 15% growth in EBIT and 25% growth in EBIT ex MI. The 42% EBIT margin of this business really reflects the improved scale and efficiency as we completed the Equatex integration and rolled out the EquatePlus platform across major markets. We have over 330 clients in North America that are now live on our market-leading platform.

The business also benefits from a structural growth trend, which is the rise in equity-based remuneration. Transactional activity was strong with buoyant equity markets and yet the book of assets under admin was more than replenished by new issuance and the value of that grew over 8% in the year. Now operationally, we are focused on product enhancements and converting our pipeline of attractive new client opportunities.

So across Computershare, our core businesses continue to perform well, and we enter FY '26 with a bit of momentum.

Now moving to Slide 7. Let's see how the business performance really translates into shareholder returns. At Computershare, we've always balanced growth investments with providing returns to shareholders. Two years ago, in FY '23, we distributed some 244 million to shareholders. In FY '24, that number increased to $523 million. And in FY '25, we have increased total returns to $613 million, a rise of 17% on the PCP.

Now the FY '25 returns included the remainder of our AUD 750 million buyback, which was completed by the 30th of June. We acquired some 25.3 million shares and at an average purchase price of AUD 29.59. But I would say that under current Australian Tax Legislation, any future share buyback programs would not be a tax-efficient way to reward shareholders and are therefore, unlikely in the short term. But with higher earnings and a positive outlook, we are pleased to announce an increase in our final dividend to AUD 0.48 per share, bringing a total for the year to AUD 0.93, an increase of 13.4% on the prior year.

Could we have paid more? Of course, we could have. However, in setting the dividend in any one period, the Board is always mindful of taking a long-term view on balancing growth investments and returns to shareholders.

We will retain a strong balance sheet with ongoing flexibility to fund selective acquisitions, investments in technology, organic expansion and returns to shareholders.

And just on M&A, and I'm sure many of you will ask, we do continue to patiently pursue a number of acquisition opportunities that would enhance our group. We know what we would like to buy, but valuations have not yet got to the target zone, but we will continue to work on being prepared and ready for when that day comes.

Now let's move to the outlook on Slide 8, and then Nick will take you through some more numbers. Opening guidance for this year is for management EPS to be around $1.40 per share, an increase of around 4%. Now I'll call out three drivers: one, continuing business performance; two, lower margin income; and three, the natural hedge in our business.

First, EBIT ex MI is expected to grow by 5% this year. Core fees should continue to grow across all our business lines with Corporate Trust being our fastest-growing business. With digitization and the deployment of other new technologies, we are becoming more efficient with lower cost to serve, and our synergy programs will also continue to deliver benefits. EBIT ex MI margins should reach 20% over time.

Now there is optionality across Computershare, too. And while we do not include it in the guidance, there is more recovery potential across our Events and transaction businesses. Debt issuance volumes and corporate actions are both well below previous peak levels.

So on to the second point, margin income. Now it is expected to be down around 5% this year. We have the full year impact of the rate cuts that happened in '25, and we will also apply the current rate curves, which assume more cuts this year. But of course, our book has some insulation to immediate rate cuts, as I've discussed. But overall, it will be a headwind this year.

Now could our MI guidance prove conservative like last year? The thesis that client balances increase as rates come down is intact. But as you would remember, we do not assume any balance growth in the guidance. We just continue the exit rate from last year.

And third, we do have a natural hedge in our business. Lower rates is reducing our debt funding costs. Now all of our debt is at floating rates and lower interest costs should save us around $0.05 per share in FY '26. Now that will include 7 months benefit from a planned repaying of the USPP debt in November.

So to conclude, we can grow overall earnings in a lower rate environment, and FY '26 should be another year of positive earnings growth.

Now over to Nick to take you on a deeper dive of the financials.

Thank you, Stuart, and good morning, everyone.

Before I talk about our results, let me start by confirming the basis of our EPS reporting. To be absolutely clear, at the half, we upgraded our guidance to around $1.35 per share based on the actual number of shares on issue at 31 December 2024. And so we are reporting today according to this number of shares on issue in order to be consistent with guidance. This, therefore, doesn't account for share purchases in the second half or the weighted number of shares on issue over the course of FY '25.

Also, please note that all the numbers I talk to are relative to pro forma numbers for FY '24. That is actuals adjusted for the sale of U.S. Mortgage Services in order to give you a better year-over-year comparison.

So starting on Slide 10, you will see from our Management P&L that we delivered $1.351 per share of management EPS in FY '25 based on the shares on issue at 31 December 2024. These earnings were driven by the following: overall revenue growth of 4.4%, that's $132 million. This highlights the strength of our integrated model with growth in core fees of 4.3% and transactional and event revenue growth of 13.6%, offsetting a 2.8% decline in margin income.

Overall, operating cost growth was 5.1%. I'll talk to -- I'll talk more about costs in a little while. Lower interest expense of $29 million reflected both lower debt and lower rates. The average cost of debt was just over 6.75%, all of which was at floating rates, which acted as a natural hedge to falling income during the period. A lower ETR, reflecting a more favorable U.S. state income tax profile following the sale of U.S. Mortgage Services. I do expect this lower tax rate, some 300 basis points better than in FY '24, to be sustainable going forward.

Altogether, these drove a 15% increase in Management EPS to $1.351 per share, an 11.6% increase in Management net profit after tax to $791 million and particularly pleasingly, facilitated an expansion in our EBIT ex MI margins to 17.5%, a rise of 150 basis points.

At the same time, statutory earnings were up 72% to $607 million. Now statutory results are on Slides 27 and 28. This rise was largely attributable to the impairment related to the U.S. Mortgage Services business in 1H '24, while statutory earnings also benefited by lower management adjustments in respect of integration expenses and restructuring programs, albeit second half costs were a touch elevated as we accelerated some program costs to bring them to a close.

Aggregated costs in this regard fell $27 million from $132.1 million to $105.4 million. And the gap between Management and Statutory earnings reduced materially over the year with statutory earnings now representing 77% of Management earnings. This helped drive up our cash conversion rate from 56% to 66% of Management EBITDA, and I expect this cash conversion rate to continue to improve as we go forward.

I do expect Management adjustments to also fall by around 40% in FY '26 as a number of our programs are now complete, then to halve in FY '27, which should be the last year of material below-the-line expenses. The remaining programs will all come to an end over the next 18 months.

Otherwise, statutory earnings were impacted $70.6 million by the amortization of acquisition-related intangible assets and a further $19.9 million from an accounting modification of a margin income hedge. These are noncash items and will continue to occur over the medium term.

Slide 11 bridges the 15% improvement in EPS from FY '24 to FY '25. Underlying business growth and cost out contributed $0.103 per share of this improvement and accretion from the buyback was $0.038 per share. The impact of the sale of U.S. Mortgage Services was only $0.001 per share in earnings, whilst lower margin income had a $0.036 per share impact, more than offset by the natural hedge of lower interest expenses better by $0.049 per share. Taking all this into account, Management EPS was $1.351 for the year, $0.178 up on the PCP.

I'll now unwrap costs on Slide 14. Pro forma OpEx, that's excluding U.S. Mortgage Services, is up 2.2%. The difference between this and headline cost growth of 5.1%, you can see in the Management P&L is in cost of sales. Excluding investments and the impact of M&A, OpEx costs were actually down $9.4 million. This is really pleasing to see and in line with our long-term objective of maintaining cost growth below general inflation. This represents the balance of the benefits from our cost-out programs of $75 million, offset by general inflationary impacts of $65 million, which also helped support the higher volumes and one-off projects across the business.

The investment of $41 million was represented by approximately $12 million in costs from an incremental 5 months of ownership of Solium UK and approximately $6 million in costs from 6 months of ownership of CMi2i and ingage, our 2 Investor relations-related businesses acquired in December 2024 and the acquisition of BNY Mellon's Canadian corporate trust business acquired in March 2025. The remainder represented investment in both technology and people to support ongoing product innovation and revenue growth.

On cost out, we delivered around $23.4 million in operating synergies from the Wells Fargo corporate trust acquisition, whilst our ongoing Stage 5 cost out program delivered $39 million in savings across the business lines and corporate overheads. The remainder was from U.K. Mortgage Services and Employee Share Plans cost out programs, the latter of which is now complete.

More details on the cost out programs are included on Slide 38. You will also note that we've increased both our cost out targets and cost to achieve. However, please note that the saving targets disclosed only cover FY '26. We do anticipate further substantial savings being delivered in FY '27.

Stranded costs from the disposals of the U.S. Mortgage Servicing business were around $40 million in the year. You can see these costs in the Technology Services & Operations segment P&L on Slide 34. These costs have now been materially offset by our Stage 5 cost-out program, and so you will no longer see these costs reported in Technology and Services -- in Technology Services & Operations going forward, instead, they will be allocated back out to the business lines.

I'll now turn to margin income, focusing on Slide 9. As you can see from the table on the top left of this slide, in FY '25, we delivered $761 million in MI on average balances of $29.9 billion. That's a yield of 2.55%. Adjusting for the sale of U.S. mortgage servicing, margin income was only 2.8% below FY '24 levels, despite the rate cuts during the year. This was because of the structuring of our portfolio. Only around 1/3 of balances are actually exposed to rates, whilst average balances also rose in mitigation and were some 8% higher than in FY '24.

In FY '26, we expect to generate around $720 million in margin income. That's a reduction of around $40 million in the year. This is based on average balances of $30.2 billion, which is in line with our exit balances at the end of June. We expect a yield of 2.38% based on the following assumed rate cuts in FY '26: In the U.S., 4 rate cuts of 25 basis points in September, December, March and June. And in the U.K., 3 rate cuts of 25 basis points in August, which has already happened, November and April. We do not anticipate any rate cuts in Canada, whilst Australia is not particularly material from an MI perspective. This is all based on curves as at the 8th of August.

Now you might ask, with all these rate cuts, how come the yield is only falling 17 basis points? And in simple terms, the answer to this is that only 1/3 of our client balances are actually exposed to interest rates. Over 2/3 are either hedged or not exposed at all. So if I look at the individual yields, the exposed yield for the year is expected to be 3.33%. These are the balances that are held at floating rates and so are fully at risk of movements in rates. The average recapture rate is 94% based on the exposed yield relative to the weighted average floating rate of 3.53%, which you can see on Slide 46.

On the table on the lower left of Slide 9, you can see the impact of changes to rates on MI for the year. Changes only impact exposed balances. And so every 25 basis points in rates impact by plus or minus $25 million on an annualized basis.

The hedge yield is 3.38%. This is an uplift of 20 basis points on FY '25, driven by ongoing churn of hedges with older, low-yielding hedges being replaced by higher-yielding newer hedges. The 5-year swap rate remains higher than this still at around 3.5%. And whilst ever it exceeds the average hedged yield, I would expect the yield on the hedge book to continue to inch up.

The nonexposed yield is 76 basis points, a reduction of 25 basis points in the year. This reduction is largely a result of lower interest sharing arrangements for some of our products as a result of client renegotiations and a lower rate environment. The balance mix is also expected to change a little in FY '26. This is largely the result of the U.K. deposit protection service balances being restructured following the extension of this contract during FY '26. There is more color on balances, the hedge book and interest rate sensitivities in the appendix.

So let me close with some remarks on cash flow and the balance sheet. Year-end leverage was 0.42x EBITDA. This is broadly in line with FY '24 as a result of the impact of the buyback and the 3 acquisitions I called out earlier. Absent M&A, I expect leverage to reduce further to around 0.25x at the end of FY '26. Aggregated net debt rose by just over $65 million during the year, with interest expenses lower, as we've said already, by $29 million. In FY '26, I expect net debt to reduce and interest expense to fall further as we benefit from the maturity and cheaper refinancing of some USPP debt in November 2025, a full year impact of the lower rates achieved on our new syndicated financing facility and the generally lower rate environment.

I will now hand back to Stuart.

Thanks, Nick. So just let me conclude. As I said earlier on, we are pleased with the results. They really validate the strategy to build a streamlined, capital-light Computershare with higher quality earnings. We're also pleased that we can provide opening guidance for another year of earnings growth despite being in a lower rate interest rate environment.

In FY '26, we do expect to continue to leverage the structural growth trends across our business and also benefit from the strength of the balance sheet. But as you've heard me say before, though, planning and executing long-term strategies are what we're really about at Computershare, strengthening our business to compound returns across cycles and complement this with enhanced earnings when client activity levels and interest rates are high. And that's our focus in FY '26 and the years beyond.

I'd just like to call out and say thank you very much to all the Computershare team for their contribution and also to our customers and shareholders for your trust and support.

Now let's open the line for questions.

[Operator Instructions] Your first question comes from Kieren Chidgey with UBS.

Two questions, if I can, one on revenue and one on costs. Just firstly, on revenues. Very good momentum in Corporate Trust, which I expect to continue. But just more interested in how you're thinking about the other 2 key areas of the business, Registry, just given the decline we've seen in shareholder accounts, I think, down 4% in the year, obviously, a weak IPO backdrop. And then secondly, in Employee Share Plans, given you're coming off a very high base of trading revenue in '25, I think in second half, around 60% of the revenue, which is a great outcome, but obviously fairly elevated. So if you could just unpack your thinking around those 2 segments, that would be great.

Yes. Thanks for the question, Kieren. So let me unpack Employee Share Plans first and think through some of the drivers in the Employee Share Plans business. As we think about revenue as we move forward, really, there's a couple of sort of data points there, and there's some noise in the data points. I think really the value of the assets under administration and the ability for that to be replenished in key markets is very, very key.

But when you look over at some of the number of units, it wouldn't have escaped your attention, the number of units under administration year-on-year was down some 18%. That was really primarily driven by 6 billion reduction in units for a number of Asia Trust units. Now they were very high in terms of number of units, but very low in AUA value. And in fact, these units only had annual trading revenues of some $20,000. And then when I look at the number of units in our core markets, I see EMEA, the number of units up 19% and also in Australia, up 14%.

Another key point in terms of looking forward and thinking about Employee Share Plans and the revenues is something which we call actionable AUA, right? And that really is about vested shares available for trading. And throughout the year, the value of these vested shares available for trading actually increased by 19% year-on-year. And I think that's sort of a lead indicator in terms of where we think that business will go.

I mean, as you point out, it is a bit of a seasonal business in terms of first half and second half. Very strong transactional revenues for the year. But I think you can't just look at units. You've also got to look at AUA. The indicators are positive that we can maintain momentum because fundamentally, the overall value of the employee share plan book is far larger and also far higher quality as far as the number of clients are concerned. So I think that bodes well.

Thinking about Issuer Services, I mean, obviously, we have been in a period with a lack of IPOs, new companies coming to public markets, et cetera. Like throughout FY '25, our core registry fees were still up. In fact, our average fee per client was up around about 4%. If I look at the transactional elements in registry in terms of some of the shareholder paid fees and transaction paid fees, they were also up. And we are in a period where the number of actual shareholders have come down. And again, that's not -- wasn't just an FY '25 thing. We saw that also in FY '24, a little bit attuned to sort of new companies coming to the market.

But I think that a combination of price increases, switch-wins, and there was a couple of real highlights for us in that business this year. We are seeing more significant cross-border types of transactions. Our global capital markets team are the most experienced in the market in terms of helping our customers manage these events. In fact, our global capital markets fees were up 30% in FY '25. And we think that we've got a little line of sight to a few transactions sort of moving forward into '26.

But certainly, Issuer Services hasn't had the same size of growth trajectory as we saw in Employee Share Plans. But I think that the business is running well. We'd love to see more IPOs. We'd love to see more companies coming to the market. But we also have that adjacency strategy in Governance Services, where we've been driving fee revenues, units under administration and Registered Agent and also CoSec entities under administration. RA was up 9%. CoSec entities were up 22% in the year, and that will be complementary to the traditional registry side in terms of numbers.

And my second question, just on cost. You, obviously, have a very good track record of managing group cost growth. And I just want to, I guess, hear a little bit more around why we've got this big step-up in the cost to implement the additional cost savings next year. I think your total one-off spend has gone up $90 million in terms of the restructuring programs or efficiency programs. What is actually being done within that incremental spend?

And Nick, I think you alluded to, obviously, there being additional benefit to come through in FY '27. So just keen to understand the potential quantum of that, but also why these -- what are they? Are these system expenses? Are they normal business efficiency improvements that potentially should be sitting above the line?

Yes. Thanks, Kieren. So really, the step-up in cost is -- to achieve is really to reflect trying to bring all of these programs to ahead and be very clear about what we expect the cost to be to close these programs down. So we're very much in the planning to exit all of these programs mode. And you saw a little bit of that in the second half of FY '25, where the costs below the line were a little bit elevated.

In terms of what these costs actually are, there are a combination of things. So there are specific program costs where we have either third-party developers or IT teams working with our business to implement new platforms or new programs. And once those platforms or programs are fully implemented, those costs will go away. In some respects, they are severance-related costs as we exit people from the workforce. And often, these programs are connected in the sense that we're replacing -- we're investing in new platforms, new technology and those platforms and technologies facilitate the reduction in the workforce. And so we put both the execution costs and the redundancy costs below the line to -- because they're not really impacted by the -- or not really impacting the day-to-day running of the business.

So that's really what they are. We're running a number of programs at the moment. So Stage 5 program is an example. There's probably 20 different initiatives within Stage 5. And so as a result, you sort of see multiple different platforms and severance costs coming through.

Yes, sorry. And the second part of your question, can you just remind me what that was?

Just I guess, two remaining questions of that. The FY '27, you said is going to halve. So roughly, what are we talking in terms of post-tax costs in '27? Is that $35 million, $40 million? Then is that a hard commitment to no more restructuring costs post '27?

Well, look, I mean, you can never say never. Right now, we've got no intention of putting any further costs below the line. But what you've got to remember here is that a lot of these costs are actually related to acquisitions and standing up acquisitions in our environment. And so if we were to do a major acquisition, then you're likely to see some costs requiring to be funded.

But obviously, at the moment, we don't have line of sight to that, and we don't have any specific intentions to launch further restructuring programs that would drive further below-the-line costs. So from where we sit today, my expectation is that all of the below-the-line cash-related costs will have exited the business by the end of FY '27.

Your next question comes from Andrew Buncombe with Macquarie.

Just the first one, you're obviously planning on paying down an additional amount of debt in November, December this year. How should we be thinking about your net debt leverage as you exit FY '26? And then how does that compare to your long-term plan for the group?

Thanks, Andrew. So net debt at the end of -- I think, as I said, net debt at the end of FY '25, we expect to be about 0.25x Management EBITDA, subject to obviously, M&A and dividends. Moving into FY '27, I would, again, subject to those 2 points, we should be net cash by the end of FY '27.

Perfect. And then the other one from me. You've said in the documents that you expect debt issuances in volume terms to recover in FY '26. Can you just give us some color around the level of recovery that you're baking into the guidance for that metric?

Yes. So as you're aware, and that's debt issuance and Corporate Trust. And I think that Corporate Trust is a suite of a number of different products. And not all of them all grow at the same time. There are certain products, some of the asset-backed stuff has been down a little bit. CLOs were modestly down in '25, et cetera. But I think from our perspective, the team have done a great job in growing the number of mandates that we've got. These mandates, you have the one-off fees for the new issuance and then you have the ongoing fee structures that you have in there.

And I think that issuance is really a product of confidence because when I've been speaking to the clients in the states who issue whether it's insurance bonds or RMBS or CMBS. I mean, what I'm really hearing from them is they enjoy stability regardless of what the interest rate markets are because they want to make sure that they price their deals right. And I think that what we have seen is despite some sort of macro noise in the second half, a period of stability, both at rates in terms of the market. So we should actually see debt issuance sort of start creeping up to its sort of normal rise of sort of CAGR volumes around about sort of 5%. I don't think it will all come through in '26, but look, we're optimistic in terms of what we're seeing.

We saw strong sort of increase in the structured products. I think with lower rates, you'll get refinancing, that actually drives lots of document custody and as a result, document custody fees. And as I mentioned, overall deal volume was down across the market, but Computershare actually net new deals in '25 over '24 was something like 20% increase. And our average fee per deal is also increasing and some of that was supported in the document custody space. So I think Corporate Trust as a business, as we think about what will happen on debt issuance going forward, will be our fastest-growing business in FY '26.

Your next question comes from Ed Henning with CLSA.

Just a couple to follow on. Look, you've given some detail on growth in share registry, and you talked about the growth in Corporate Trust there and trying to head back towards more of a 5% CAGR. Can you just give us a little bit more detail? And you talked about mandate wins in Corporate Trust. Are you winning market share in the other divisions beyond Corporate Trust? And how we should also think about industry growth rates, both in register and in plans as well, please? That's the first question.

Yes. Look, I think the competitive environment overall for Computershare with sort of consolidation in industries, et cetera, is positive for us. I think that we have been winning some switch business. Our U.K. business did pretty well in registry last year and also resonating quite well into the U.S. market, the sort of larger sort of shareholder bases.

And I think that the exciting thing for me really is that's -- we're not going out there winning it on price or anything. It's because we actually have some pretty large-scale investments. We've got all new client portals for our Issuer Services clients in North America, where they can access all their shareholder data and getting reports. We rolled that out in the year. We've got sort of new investor center sort of apps for shareholders, making it easier for them to sort of communicate and also transaction with us.

And what that demonstrates to the market is this is really a core business for Computershare, and we're willing to invest in it. We're willing to sort of upgrade our products. We're certainly sort of market-leading from that perspective. And we'll take these products that we've rolled out in North America and roll them out through Australia and the U.K., et cetera. And I think what that will do is it will still demonstrate our willingness to invest into these areas for our clients and improve that sort of market share, notwithstanding the previous point about sort of lower number of shareholders and lack of IPOs, I think that's helping.

On the Employee Share Plans component, again, Employee Share Plans is by factor, fairly more sort of complicated at times than issuer services in terms of the different plans and the different ways in which companies implement equity-based rem. Again, the overall sort of market has been -- from a competition perspective, has been positive for Computershare. There's been sort of consolidation in that industry and the fact that we are global, we are able to trade in multiple markets and especially for employees in global companies. We have the Jersey trust structure, which helps companies from a tax perspective with their employee benefit trust, et cetera. So all that put together puts us in a sort of strong position.

And I look at the pipeline in plans in terms of -- it's very, very positive in terms of opportunities. But the switch wins in plans often take a long time because to be able to move your provider, integrate into HR platforms, it takes a bit of time, but the pipeline is positive.

And I think the team have done a great job in rolling out that platform. We now have that platform into the U.S., and we can start regaining sort of market share back through there in the U.S. So I think the overall competitive environment for Computershare is positive, and coupled with our investments in tech and additional product offerings should fare well for the future.

And then just a second one rolling on from that. You mentioned the investment in technology in a number of the divisions, and you mentioned it through the presentation. We saw CapEx step up a little bit back to '23 levels. Can you just talk about your future need for investment in technology? How we should think about that impacting your cost growth? And will it impact at all your ability to make acquisitions or increase the dividends? Or is it relatively small?

Look, it's not huge. But I'm sure that the technology team would love to be able to sort of take a percentage of revenues, right, say, 11%, 12%, whatever that may well be and say that's what our tech budget is. I'm much more old school in terms of let me see the business case, let me see the payback and have -- and if these numbers stack up, having a willingness to invest. So there'll be periods of times where it will be higher rather than just this constant sort of cost base.

Now of course, with technology, you've got maintenance and infrastructure, which is your constant time. It's much more the development side that we're talking about. I think that like many organizations around the world, there is emergence of new technologies that do require some investment, but I can also see a little bit clearer some of the benefits of that. And Computershare has always been an organization that's been willing to invest in its tech, really be a sort of market leader across the businesses that we choose to be in. And look, we'll continue to do that.

I don't think you'll see a huge step-up in tech costs. It's really that sort of much more opportunity cost prioritization, what we're working on and making sure that, that's very, very clear for the businesses and then tracking that sort of business case in terms of that tech spend and then obviously, the returns that we actually get from that. So you shouldn't see a significant step-up. But certainly, it's quite an exciting time at Computershare with some of the teams and individuals that we've brought into the group and refreshing some of our tech and then deploying sort of new tech that's actually out there. So for an old tech head like me, it's actually quite an exciting time at Computershare on the technology front.

Your next question comes from Andrei Stadnik with Morgan Stanley.

Can I ask my first question around U.K. Mortgage Servicing. So the revenues there looks like they've been in decline and also the number and the value of loans have been in decline. So what are your kind of goals or targets for that business? Or how committed are you to that business going forward?

Yes. Thanks, Andrei. So in our U.K. mortgage business, a large portion of the loans we have is what you'd call a closed book, right? So it's some of the former Northern Rock, Bradford & Bingley loans, et cetera. So you have runoff of that. There's no replenishment on these particular books. It's not like a bank who's issuing new mortgages. So you'll see runoff being slightly elevated on that particular business.

We've stated before that we're looking to exit the mortgage space. We obviously did that in the U.S. The U.K. has been a little bit harder to achieve given some of the changes in terms of the buy-to-rent market and other bits and pieces. We are still actively looking to exit that market.

And yes, so that's really the story with U.K. Mortgage Services. It's really about runoff in the book, which means people basically paying down their mortgage sort of faster than you would normally expect, and that's combination of higher rates. But we have indicated that we would like to exit this particular market.

Roger that. And my second question, can I ask around the nonexposed book? Because I think earlier, you kind of described that it just totally doesn't matter. But if we look at what's happened in terms of nonexposed margin balances, they did 115 basis points yield in FY '24. They did 101 in FY '25. And I think you're guiding to about 76 basis points in FY '26. So it looks like there is some movement there. So like how should investors think about that nonexposed book in terms of what it is, will it t bigger or larger, and what actually does shape the yield on that part?

Yes. Look, the best way to think about that, the nonexposed book, Andrei, is these are a range of -- so it's a weighted average of client arrangements where we are essentially sharing in the interest income generated on deposits with our clients. And so different clients will have different arrangements. But typically, we will be receiving, on average, 76 basis points across those balances in FY '26.

Why that's lower than FY '25 and FY '24 is simply because rate -- overall rates are lower in '25 and rates are overall lower in '26. And so when we negotiate with our clients, what happens is the client will say, well, you can take -- and let's just use a very simple example. You can take 25% of the overall interest income to be generated. So if rates are 4%, then that would mean that Computershare share would be 100 basis points. It's nonexposed because it would be 100 basis points. But when that arrangement comes to an end, the client might say, you can have -- you can still have 25 basis points, but rates have dropped from 4% to 3%. And so you can now only have 75 basis points.

So the declining margin -- declining in yield on nonexposed generally represents the fact -- the prevailing amount of interest income to be -- that's available. So with rates around 3%, I'd expect that yield to remain at sort of that 76 basis points level. And if rates go back up in '28, '29 as the curve suggest, you'd see it drop -- rise again. But I think for now, my expectation is it's going to stay pretty flat at that point.

Your next question comes from Julian Braganza with Goldman Sachs.

Just the first question, just on the guidance, EBIT ex MI up 5% into next year. Just for the clarity on how we should be thinking about that in terms of revenue versus cost. You did really well on costs in the second half. Should we expect that trend to continue into full year into FY '26 sort of flattish? And is it mostly revenue driven, just to be super clear for the EBIT ex MI number?

Thanks, Julian. So -- looking ahead to FY '26, I think the first point to note is we expect our EBIT ex MI margin to continue to expand in FY '26. We'll see cost growth will be pretty subdued, and it will be outpaced by revenue growth. As Stuart said earlier, Corporate Trust will be the fastest-growing business in '26. But you'll see some revenue growth and little cost growth and margins expand.

Your next question comes from Nigel Pittaway with Citi.

First of all, obviously, the assumption of flat balances is consistent with normal practice. And I realize they're notoriously hard to predict and there's market factors involved. But it sounds like with what you're saying in the recovery in Corporate Trust across the group with the 11% announced increase -- sorry, in announced M&A, that you're actually quite sort of optimistic about where they might trend. So can you maybe just give some comments about that?

Thanks, Nigel. Look, -- it's opening guidance. And as we've said before, our style is certainly to be a little conservative to start the year fundamentally. We always just take the exit run rate of balances. I talked about the thesis in a lowering rate environment with increasing balances. We've seen that come through. So that may well happen. We're not factoring in a substantial change in corporate action environment and some of the event and transactional stuff. We're much more focused on the core fees. So I think that we'll start the year being conservative. And as we normally do throughout the year, we'll continue to update you if we -- balances do increase or corporate actions improve and other event and transactions improve. So that's been our style.

That does conclude our question-and-answer session. I'll now hand back to Mr. Irving for closing remarks.

Well, thank you, operator, and thanks, everyone, for joining us on what's no doubt a busy day for you all.

Just a couple of closing points, really what I see from the Chair. As I said earlier on, from an FY '25 perspective, you can really see that sort of streamlined Computershare with a high-quality capital-light businesses really delivering the higher returns. And you think about the decisions we made in getting here, and it's pleasing to see these results validate that strategy. As we start sort of thinking about ongoing earnings growth in '26, as we mentioned, we do have ongoing revenue and core fees and a number of our sort of more market-sensitive revenues are sort of below previous peaks. And we can grow earnings in a lower rate environment, and that's despite margin income being sort of $40 million lower predicted in FY '26.

But as I said to Nigel there, his opening guidance and our style is to be a little bit conservative at the start of the year. But I think what really excites me is really what we can continue to build over time. And that's that sort of a group with high-quality businesses, use the flexibility of having that strong balance sheet, continue to execute well, strengthen our business, invest in innovation and new technologies, make these selective acquisitions for the group, and we should be able to sort of deliver enduring high returns through cycles and also reward shareholders.

So thanks again, and I look forward to seeing many of you over the coming days.