Good morning, and thank you for joining us for the Computershare FY25 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 135 cents 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 two shows the FY25 results and the Pro forma FY24 comparisons. The FY24 Pro forma results exclude U.S. Mortgage Services, which we sold in May 2024. Now, just to be clear, the Pro forma does not adjust the FY25 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 four. 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 2021, 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.
Now, 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 FY26. In February, we guided to margin income of around about $750 million. We came in slightly ahead at $759, 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 five, I'll turn to the performance of the three 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.
Now, 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%. Now, 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 roadmaps 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 two years. Over in Employee Share Plans, they delivered another impressive result 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. You know, 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 booming equity markets, and yet the book of assets under administration 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 FY26 with a bit of momentum. Now, moving to Slide seven, 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 FY23, we distributed some $244 million to shareholders. In FY24, that number increased to $523 million, and in FY25, we have increased total returns to $613 million, a rise of 17% on the PCP. Now, the FY25 returns included the remainder of our Aussie dollar $750 million buyback, which was completed by the 30th of June. We acquired some 25.3 million shares and had an average purchase price of $29.59 Aussie, 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 $0.48 per share, bringing a total for the year to $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.
We will continue to work on being prepared and ready for when that day comes. Now, let's move to the outlook on Slide eight, and then Nick will take you through some more numbers. Opening guidance for this year is for Management EPS to be around 140 cents 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 2025, 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? You know, 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 are 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 FY26. Now, that will include seven 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 FY26 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 135 cents 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 FY25. Also, please note that all the numbers I talk to are relative to pro forma numbers for FY24. That is, actuals adjusted for the sale of U.S. Mortgage Services in order to give you a better year-over-year comparison.
Starting on Slide 10, you'll see from our Management P&L that we delivered 135.1 cents per share of Management EPS in FY25 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 more about cost 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 FY24, to be sustainable going forward. Altogether, these drove a 15% increase in Management EPS to 135.1 cents 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 1H24, while statutory earnings also benefited by lower management adjustments in respect of integration expenses and restructuring programs, albeit the 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. 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%- 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 FY26 as a number of our programs are now complete, then to halve in FY27, 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 non-cash items and will continue to occur over the medium term. Slide 11 bridges the 15% improvement in EPS from FY24 to FY25. Underlying business growth and cost out contributed $0.10 per share of this improvement. An accretion from the buyback was $0.38 per share.
The impact of the sale of U.S. Mortgage Services was only $0.01 per share in earnings, while lower margin income had a $0.36 per share impact, more than offset by the natural hedge of lower interest expenses, better by $0.49 per share. Taking all this into account, Management EPS was 135.1 cents for the year, $0.17 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 five months of ownerships of Solium UK and approximately $6 million in costs from six months of ownership of CMi2i and Ingage, our two 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, while our ongoing Stage five 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 FY26. We do anticipate further substantial savings being delivered in FY27. Stranded costs from the disposals of the U.S. Mo rtgage Servicing business were around $40 million in the year. You can see these costs in the Technology Services and Operations segment P&L on Slide 34.
These costs have now been materially offset by our Stage five cost out program, and so you will no longer see these costs reported in Technology Services and Operations going forward. Instead, they will be allocated back out to the business lines. I'll now turn to margin income, focusing on Slide nine. As you can see from the table in the top left of this Slide, in FY25, 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 FY24 levels despite the rate cuts during the year. This was because of the structuring of our portfolio. Only around a third of balances are actually exposed to rates, whilst average balances also rose in mitigation and were some 8% higher than in FY24.
In FY26, 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 FY26. In the U.S., four rate cuts of 25 basis points in September, December, March, and June, and in the U.K., three 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?
In simple terms, the answer to this is that only one third of our client balances are actually exposed to interest rates. Over two thirds 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 nine, 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 FY25, driven by ongoing churn of hedges, with older low-yielding hedges being replaced by higher-yielding newer hedges. The five-year swap rate remains higher than this still at around 3.5%, and while ever it exceeds the average hedged yield, I would expect the yield on the hedge book to continue to inch up. The non-exposed 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 FY26. This is largely the result of the U.K. Deposit Protection Service balances being restructured following the extension of this contract during FY26.
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 0.42 times EBITDA. This is broadly in line with FY24 as a result of the impact of the buyback and the three acquisitions I called out earlier. Absent M&A, I expect leverage to reduce further to around 0.25 times at the end of FY26. 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 FY26, 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 FY26, 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 FY26 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.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question.
Your first question comes from Kieren Chidgey with UBS.
Morning, Stuart . 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 two 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 2025, 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 two segments, that'd be great. Yeah, 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.
In fact, these units only had annual trading revenues of some $20,000. 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? That really is about vested shares available for trading. Throughout the year, the value of these vested shares available for trading actually increased by 19% year on year. 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, etc. Throughout FY25, 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.
Again, that wasn't just an FY25 thing. We saw that also in FY24, 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 FY25. We think that we've got a little line of sight to a few transactions sort of moving forward into 2026. Certainly, Issuer Services hasn't had the same size of growth trajectory as we saw in Employee Share Plans. 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.
Thanks. And my second question just on cost. Obviously, I 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 IT spend's 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 FY27. So just keen to understand the potential quantum of that, but also why these are what are they? Are they system expenses? Are they normal business efficiency improvements that potentially should be sitting above the line?
Yeah, thanks, Kieren. So really, the step up in cost to achieve is really to reflect trying to bring all of these programs to a head 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 FY25, where the costs below the line were a little bit elevated. In terms of what these costs actually are, they're 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 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 five, the Stage five program as an example, there's probably 20 different initiatives within Stage five.
So as a result, you sort of see multiple different platforms and severance costs coming through.
Okay.
Yeah, sorry. The second part of your question, can you just remind me what that was?
Just, I guess, two remaining questions of that. The FY27, 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?
Yeah, so I think, yeah.
And then is that a hard commitment to no more restructuring costs post '27?
Well, look, I mean, you can never say, 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.
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 FY27.
Thank you.
Your next question comes from Andrew Buncombe with Macquarie.
Hi, guys. Thanks for taking my questions. 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 FY26? And then how does that compare to your long-term plan for the group? Thanks.
Thanks, Andrew.
So, net debt at the end of, I think, as I said, net debt at the end of FY25, we expect to be about 0.25 times Management EBITDA, subject to obviously M&A and dividends. Moving into FY27, I would, again, subject to those two points, we should be net cash by the end of FY27.
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 FY26. Can you just give us some color around the level of recovery that you're baking into the guidance for that metric? Thank you.
Yeah. 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 grow at the same time.
There's certain products, some of the asset-backed stuff has been down a little bit. CLOs were modestly down in 2025, etc., but I think from our perspective, the team had done a great job in growing the number of mandates that we'd 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 interest rate markets are because they want to make sure that they price their deals right.
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. We should actually see debt issuance sort of start creeping up to its sort of normal upside sort of CAGR volumes at around about sort of 5%. I don't think it'll all come through in 2026, 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 2025 over 2024 was something like a 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 as Corporate Trust, as a business, as we think about what will happen in debt issuance going forward, we'll be our fastest-growing business in FY26.
Excellent. That's it from me. Thank you.
Your next question comes from Ed Henning with CLSA.
Hi, thanks for taking my questions. 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, as a first question.
Yeah. Look, I think the competitive environment overall for Computershare with sort of consolidation in industries, etc., 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 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 transact 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., etc. 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 it's helping.
On the employee share plans component, again, employee share plans is, by a 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 trusts, etc. So all that put together puts us in a sort of strong position. 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.
Thanks for that. 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 2023 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 a—and if these numbers stack up, having a willingness to invest. So there'll be periods of times where it'll 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.
That's great. Thanks, Stuart.
Your next question comes from Andrei Stadnik with Morgan Stanley.
Good morning, Stuart. Nick, can I ask my first question around U.K. Mortgage Servicing? So the revenues there look 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?
Yeah, 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, etc. 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. Look, 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. Yeah. And yeah, 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 a combination of higher rates, but we have indicated that we would like to exit this particular market.
Roger that, and look, my second question, can I ask around the non-exposed book? Because I think early you kind of described that it just totally doesn't matter, but if we look at what's happened in terms of non-exposed margin balances, they did 115 basis points yield in FY24. They did 101 in FY25, and I think you're guiding about 76 basis points in FY26. So it looks like there is movement there, so how should investors think about that non-exposed book in terms of what it is, will it get bigger, larger, and what actually does shape the yield on that part?
Yeah.
Look, the best way to think about the non-exposed 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 FY26. Why that's lower than FY25 and FY24 is simply because overall rates are lower in 2025, and rates are overall lower in 2026. 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's share would be 100 basis points.
It's non-exposed because it would be 100 basis points. But when that arrangement comes to an end, the client might say, "You can still have 25 basis points, but rates have dropped from 4%- 3%, and so you can now only have 75 basis points." So the decline in yield on non-exposed generally represents the prevailing amount of interest income 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 2028, 2029, as the curve suggests, you would 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.
Good morning, guys. Thanks so much for taking our questions.
Just a quick 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 cost in the second half. Should we expect that trend to continue into FY26, sort of flattish? And is it mostly revenue-driven, just to be super clear for the EBIT ex-MI number? Thanks.
Thanks, Julian. So looking ahead to FY26, I think the first point to note is we expect our EBIT ex-MI margin to continue to expand in FY26. You'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 2026. But you'll see some revenue growth and little cost growth and margins expand.
Your next question comes from Nigel Pittaway with Citi.
Good morning, guys. Just 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, 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?
Look, 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 balances do increase or corporate actions improve and other event and transactions improve. So that's been our style.
Thank you. That does conclude our question and answer session. I'll now hand back to Mr. Irving for closing remarks.
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 FY25 perspective, you can really see that sort of streamlined Computershare with the 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 that validate that strategy. As we start sort of thinking about ongoing earnings growth in 2026, as we mentioned, we do have ongoing revenue in 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 FY26. But as I said to Nigel there, it is 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.