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Highlights
- Link Administration has affirmed the 2022 financial year guidance provided in February.
- Dye & Durham takeover of LNK under scanner
- The company's share price was at its yearly low on Thursday due to concerns raised by ACCC.
The technology company Link Administration Holding Limited (ASX:LNK) saw a massive fall of over 10% in its share price yesterday. The fall was related to a few concerns raised by The ACCC (Australian Competition and Consumer Commission).
The ACCC has expressed worries about a significant preliminary competition on Dye & Durham's billion-dollar takeover bid for Link Group. The share price dropped to its one-year low and closed at AU$3.35 on 16 June 2022. However, the company is making headlines again by confirming its FY22 revenue & profit guidance, initially disclosed in February 2022.
FY22 guidance confirmation
In February this year, Link Group released its H1-FY22 results and outlook for the remaining year. The company saw itself well placed to return to medium-term growth. It anticipated its revenue growth guidance to be low as a single-digit growth, whereas the FY22 Operating EBIT to be at least 5% higher than FY21. Today, after three months, Link Group affirmed the guidance.
Link Group’s first-half results were reportedly ahead of its expectations. Revenue increased by 0.6%, and Operating EBIT was about 11% higher. The company has de-geared its Balance sheet and completed an on-market buy-back in the first six months of FY22. Based on profits and details laid down in Dye & Durham SID, Link Group’s board had paid a fully franked interim FY22 dividend of 3.0 cents per share on 8 April.
In December 2021, Link Group signed a Scheme Implementation Deed (SID) with Dye & Durham (D&D). The transaction is expected to get completed in June or July 2022. All major regulatory approval submissions to the relevant authorities in Australia, the UK, Europe and India have already been made.
However, yesterday the ACCC raised a few concerns over the acquisition. Dye & Durham's takeover of Link directly has no issues, but the point of worry is D&D to own 42.8% stake in PEXA Group Ltd (ASX:PXA) post acquisition. Currently, Link holds 42.8% stake in Pexa.
As per ACCC, this transaction could increase vertical integration in the conveyancing sector. Therefore, a more extensive and comprehensive phase II review is needed. ACCC expects to disclose the final decision on 8 September 2022.
Road ahead for Link Group
Today even after the affirmed positive revenue guidance, Link Group shares hardly received any positive backing. The company's share is currently trading at AU$ 3.335 per share, down by 0.447%, as of (AEST: 12:23 pm)
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