UNITED KINGDOM

Computershare Investor Services (CIS)
Background

CIS United Kingdom has steadily grown its market share year on year. Since its acquisition from RBS Registrars in 1998, market share rose from 30% to 36% in June 2001. Market share at the end of this year was 42%.

The increase this year is a result of the successful implementation of our organic growth strategy which focused on the launch of a market awareness programme. This was complemented by a number of regional conferences with consistent emphasis placed on personal contact aimed largely at the existing client base as well as a number of key prospects. We had good results from cross selling, and targeted sales and marketing to key clients of competitors.

Significant Transactions During The Year

Despite the significant decline in market activity since September 11, CIS successfully managed 123 corporate actions during the year including:

  • Friends Provident demutualisation
  • Halifax and Bank of Scotland merger
  • Barclays stock split
  • HMV spin-off
  • IPOs - responsible for 56% of the new capital raised in the market.

Priorities

Critical to our on-going success in developing and marketing deeper and broader relationships with our clients will be the bringing together of new and existing non-core products that add value and are delivered in a seamless integrated manner.

Primary areas are:

  • Shareholder Relationship Management - retail shareholder analysis tools
  • Electronic Shareholder Communication
  • Shareholder Solutions
  • Contact Centre - increased functionality of our contact centre capabilities
  • Dealing services provided to small shareholders and ESPP clients
  • Computershare Document Services
  • ADR Programme Services.

We are also developing a range of services to support company secretaries.

Computershare Plan Managers (CPM)
Background

The two main jurisdictions for employee share ownership in the region are the United Kingdom and Continental Europe. We will continue to explore routes into France in the period ahead. There are more than 2.5 million participants in employee share plans in the UK.

The table below shows the total number of plans approved since inception in 1979 to 2000.



Major Events During the Year

During the year we have been extremely successful in growing our client base in the high margin areas of Share Incentive Plans and Executive Share Option Plans.

The Computershare brand is quickly becoming recognised in the market for its leading-edge technology, full product range, global capability, and the 'can do' attitude of its staff.

Several high profile wins during the year included:

  • BP (our first global employee share plan and option plan contract)
  • Scottish and Newcastle
  • Mmo2
  • British American Tobacco
  • National Grid
  • Rolls-Royce
  • Smith and Nephew.

All of the above companies are FTSE 100 companies, and all except Rolls-Royce are registration clients of a competitor.

The Market

We are benefiting from, and encouraging a trend for clients to outsource the administration of share and (especially) option plans to a single provider.

It is estimated that approximately 12% of the adult population participates in an employee share plan of one form or another. There is, therefore, significant growth potential for the UK market, especially in the high margin areas of Executive Option Plans and Share Incentive Plans. This growth potential is underpinned by continued Government support of employee share ownership through significant tax breaks for certain employee share plans.

Europe also represents a major opportunity for CPM. Europe has a population of over 350 million and there is increasing interest in share plans, especially with companies with international workforces. The increasing globalisation of companies also provides opportunities for CPM to leverage its global network and provide a total solution for employee share plan management.

Computershare Document Services (CDS)
Background

CDS has a significant presence in the registry fulfilment market, and benefits from the growth in other parts of the business. When the business was set up three and a half years ago it was physically integrated into the site at Bristol with the registry operations. We benefit from this efficiency in servicing registry clients and continue to raise our profile in financial mailing more generally.

Major Events During the Year

CDS achieved a record growth in revenue of 40% over the prior year. Some of the year's highlights and new contracts include:

  • Bristol and Wessex - billing over three million documents per year
  • JP Morgan Fleming - documents for OEIC conversion EGMs, managed by CIS
  • Friends Provident - three million images, one million mailpacks
  • HBOS (Merger of Halifax and Bank of Scotland) - three million mailpacks
  • Equitable Life - five million images, five hundred thousand mailpacks.

The Market

The reduction in registry activity and hence the reduction in mailing activity due to market conditions increased our focus on revenue generation from the external/commercial side of the business. We achieved outstanding success in this area with commercial sales representing 24.5% of total sales, up 57% year on the prior year.

Many United Kingdom companies are reviewing in-house print operations and are investigating lower-cost outsource solutions hence providing CDS with business opportunities.

Priorities

  • Accomplish Total Print Management - one-stop shop from stock and data through to print, mail, and dispatch
  • Increase efficiency & economies of scale - double production floor space and complete a 50% increase in cut sheet printing capacity
  • Introduce colour print technology & expand design capabilities
  • Implement of online bill presentment, bulk emailing, CD archive and retrieval, contact centre application and data mining
  • Achieve ISO 9001 accreditation

Computershare Analytics Services (CAS)
Background

Our clients rely on CPU Analytics to analyse United Kingdom business through our market-leading product, Citywatch. Since its acquisition in 2000, CAS has maintained its position as market leader in the provision of United Kingdom equity ownership information.

Our primary clients are members of the investment banking industry. Over the last year we have witnessed further consolidation in the industry as well as high numbers of redundancies at these banks which has reduced our target audience.

Priorities

The CAS service delivery initiative is geared towards analysing every global publicly traded equity. We envisage that this will lead to Citywatch Global selling global licenses to the major global investment banks.

In addition we are also focused on marketing the extensive database functionality to our corporate clients as an important investor relations tool to track and understand the composition of their investor base.

Computershare Technology Services (CTS)
Background

Computershare Technology Services works in tandem with each of Computershare's business units. Technological capability plays a vital part in gaining new business and expanding existing business. We pride ourselves on providing a seamless integrated service with our technological expertise providing the backbone to the products and services suite.

New Products and Services Launched this Year

New products and services over the last twelve months include:

  • Employee share plan developments
  • SCRIP developments for United Kingdom corporate actions and employee schemes
  • CREST development
  • Web-based enquiry package for clients using Issuer Online.

Technological developments and advancements over the year contributed to a general improvement in operational resilience and disaster tolerance. Specific developments include:

  • Improved resilience, speed and uptime with the introduction of the new Open VMS mainframe processors
  • Migration of data storage to a rapid access fibre-optic network - allows much faster access to large amounts of data across LANs and WANs.

Priorities

  • Interactive Voice Response (IVR) technology for call handling capabilities in the United Kingdom contact centres
  • Improved employee plan and option plan management software with global functionality
  • Enhancements to our existing imaging and workflow technology
  • Ongoing web-based enhancements for issuers and their shareholders
  • Internal service level agreements and closer logging of internal incident logging is about to be established
  • Expansion of a staff education programme and the CTS graduate scheme.