Shareholders in Computershare Limited (ASX: CPU) will be pleased today after the share registry business hit a record high of $16.99 today after the group announced it expected a net profit benefit from tax cuts pushed through Congress by the administration of President Trump.
The US corporate tax rate is set to be cut from 35% to 21%, although Computershare flagged that the reforms would also eliminate certain tax deductions currently available to it.
Computershare is also a beneficiary of rising US cash and debt rates more generally as a large proportion of the cash it looks after on behalf of clients it reinvests in risk-free money market instruments in order to generate greater returns. Computershare recently suggested FY 2018 earnings per share should come in 10% above the prior year, although with the upcoming tax breaks it could beat that forecast.
