Why do Plcs pay share registrars so much?

These three companies, well known to anybody holding shares in their own name, last year made on average 29p for every pound of income - and, believe it or not, that was a poor year.

Let me introduce the lucky players. At the front of the pack stands Equiniti, formerly Lloyds Bank Registrars, with a market share not far off 50 per cent. Lloyds was the last of the banks to sell its share registration business, which went to US private equity firm Advent for £540m in 2007.

What happened next is deliciously summed up by one Oliver Niedermaier - a non-executive director appointed after the buyout - on a video clip you will find on the Advent website's Equiniti page. Niedermaier, who could have been cast in Hollywood, explains how Lloyds "needed to develop from a farmer kind of culture to a hunter culture." In case there was any doubt about what that meant, Advent parked £550m of borrowings on Equiniti's balance sheet. And I'll bet that's when it started charging for inbound calls.

Needless to say, all Equiniti's operating profits shown in the table below are used up in servicing its debts. And more. Last year's interest charge of £49m resulted in a bottom line loss of £26m, taking the total losses run up since the buyout to £100m. Nice work if you can get it. Equiniti's borrowings have to be repaid in 2016, but one wonders whether its covenants might come into play sooner.

Computershare was traditionally the number two, but it's looking very healthy. You can invest in this company, although you'll have to go to the Sydney Stock Exchange to do so and not be deterred by a price/earnings ratio of over 30.

It's a serious Australian success story. Computershare arrived on these shores in its first overseas foray 15 years ago and soon persuaded the Royal Bank of Scotland to sell its registrars operation. Since then, it has bought or established share registration operations in virtually every country with a serious stock exchange for an overall income approaching £1.3bn. And although its margin in the UK is at the top of the range, its global average is pretty handsome.

Which brings us to Capita, known as IRG until 2000 when Capita bought it for £100m and has treated it lovingly ever since. As you would with returns like that. But with Capita's profits now heading for £400m, the registrars business is now just a small part of a small division.

And so far as I can see, those three have it all wrapped up. It's a very cosy world. Niedermaier used to work for Computershare. Equiniti's boss came from Capita. Who would want to see those profits competed away? By my estimate, the number four is probably Neville Registrars. A client tells me it's an admirable and cost-effective operation, and it doesn't have any truck with those 10p a minute inbound calls. But it's so small the big three have probably never heard of it.

Handsome profits are a fine thing if you're earning them. But to those being milked to provide them, they just look gratuitous. Why do UK companies allow their registrars to make so much money? And then to charge us for the phoning them? Perhaps the Office of Fair Trading should take a look.