Overview of Link Administration Holdings' financial report

Link Administration Holdings Limited (LNK) has released its Appendix 4D - Interim Financial Report for the six months ended 31 December 2023. The report presents the financial results of Link Group for the period and provides insights into the company's performance, dividends, and significant events. The company's net tangible assets, dividends, and the Scheme Implementation Deed with Mitsubishi UFJ Trust and Banking Corporation are highlighted in the announcement. Additionally, the report includes the Directors' Report, Interim Financial Statements, and Notes to the Interim Financial Statements, providing a comprehensive overview of the company's operations and financial position.

Executive commentary on the financial report

The company defines net tangible assets as net assets less intangible assets, resulting in a negative net tangible asset per security. Link Group did not declare an interim dividend during the period, in line with its obligations under the Scheme Implementation Deed with Mitsubishi UFJ Trust & Banking Corporation. However, subject to the Trust Bank Scheme becoming effective, the company intends to pay a special dividend of 16.0 cents per share. Link Group entered into a Scheme Implementation Deed with Mitsubishi UFJ Trust and Banking Corporation, under which MUTB has agreed to acquire 100% of the shares in Link Group by way of a Scheme of Arrangement, subject to various conditions, including regulatory approvals and shareholder and court approval. The company's financial statements have been reviewed by KPMG, with an 'emphasis of matter' relating to a restatement of the prior period. The report also includes details of the Directors, their experience, and the company's principal activities, providing insights into the leadership and governance of Link Group. Furthermore, the announcement outlines the restatement of prior period comparative information and the basis of preparation of the financial statements, including the going concern assumption and the functional and presentation currency.

Summary of Link Administration Holdings' financial report and outlook

Link Administration Holdings Limited (LNK) has released its consolidated interim financial statements for the period ending 31 December 2023. The company operates in two reportable segments, Retirement & Superannuation Solutions (RSS) and Corporate Markets (CM). The sale of the Banking & Credit Management (BCM) and Fund Solutions (FS) businesses were completed during the period, and these segments are not considered reportable for the half-year ended 31 December 2023. The company's chief operating decision maker primarily uses revenue, operating EBIT, and total assets to assess the performance of the operating segments. The financial statements also include information on discontinued operations, assets held for sale, revenue disaggregation, earnings per share, taxation, provisions, intangible assets, share-based payment arrangements, and subsequent events. Management's judgements, estimates, and assumptions affecting the financial statements are disclosed in various notes, including discontinued operations, utilisation of tax losses, provisions, reassessment of remaining useful economic lives of core software platforms, key assumptions in impairment testing for cash generating units containing goodwill, fair value of level 3 financial instruments, and share-based payments. Financial information presented in Australian dollars has been rounded to the nearest thousand unless otherwise stated, in accordance with ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191. The principal accounting policies adopted by Link Group are consistent with those applied to the 2023 Annual Report. The company has completed the sale of the BCM business to LC Financial Holdings Limited and the FS UK and Ireland business to Waystone Group. The FS Luxembourg and Swiss businesses are expected to be divested in 3QFY24. The company has provided information on basic and diluted earnings per share calculations. The financial statements include details of non-deductible expenses and unrecognised tax losses in various jurisdictions. The financial statements provide a reconciliation of the carrying amount of each material class of provisions, including claims, integration, onerous contracts, and redress provisions. The company conducted an internal review of its expected usage of core software platforms, resulting in changes to the remaining useful economic lives for some platforms. The financial statements include details of the company's share-based payment arrangements, including Long Term Incentive Plans (LTI), Short Term Incentive Plans (STI), and Retention Schemes. An update on the LFSL Scheme and other matters is provided, along with the Directors' Declaration and the Independent Auditor's Review Report. Consistent with the Scheme Implementation Deed with Mitsubishi UFJ Trust & Banking Corporation, no interim dividend was declared by the Board, and a special dividend of 16.0 cents per share is intended to be paid subject to the Trust Bank Scheme becoming effective. The financial statements include information on accumulated losses, interest bearing loans and borrowings, investment and financial risk management, contributed equity, and contingent assets related to insurance proceeds. The financial statements provide a reconciliation of net profit after tax to net cash inflow from operating activities and other relevant details. The information in the announcement provides a comprehensive overview of Link Administration Holdings Limited's financial performance, significant events, and governance structure, offering valuable insights for further analysis and reporting.