Iress reinstates dividend after swinging to first-half profit
Make us a preferred source
Make us a preferred source on Google
The news: Iress swung to profit in the first half of the 2024 financial year, as the financial software provider reinstated a full-year dividend in March 2025.
The numbers: Iress recorded net profit after tax of $17.3 million compared to an after tax net loss of $139.8 million in the FY23 first half.
Adjusted EBITDA rose 52% to $67 million year on year while revenue dipped 2.6% to $309 million. Iress noted that excluding divested businesses over the last 12 months, revenue was 4% higher year on year.
Meanwhile, operating expenses declined 10% to $242 million, which the company said reflected the ongoing delivery of Iress' strategy to reset the group's cost base and improve operating leverage.
Iress upgraded FY24 guidance to $126 million to $132 million, representing a 9% uplift from its previous forecast. The company said it expects to issue a full-year dividend in March 2025.
The context: Iress said its transformation is delivering a "stronger and more streamlined" business with improved financial returns. The revenue increase was driven by the implementation of a refreshed pricing framework and investment into bolstering sales and account management capabilities with the business units.
A strong improvement in the UK business under renewed leadership has also seen improved earnings, it said, as well as the renewal of several wealth clients with a contract value of $84 million over the next five years.
During the half year, Iress sold its UK mortgages business for $167 million, with the sale completing on 1 August. Iress also sold its platform and pulse businesses, with all proceeds being used to retire debt and providing greater capacity to focus on core competencies.
E&P Capital analysts Olivier Coulon said the adjusted EBITDA result came in at the top end of recent guidance, albeit with greater excluded costs than expected. He noted that the FY24 guidance upgrade was "positive albeit expected", with the top end of the new range "broadly consistent" with E&P's existing forecast.
What they said: Iress' CEO and managing director Marcus Price said: "Strong action on cost reduction has delivered operating leverage with our adjusted EBITDA margin up 760 basis points to 21.7% and adjusted EBITDA up 52% versus PCP".
"Through the sale of non-strategic assets, including our UK mortgages early in the second half, we have considerably strengthened our balance sheet which now sits within our target range at 1.2x leverage," he said.
The sources: ASX announcement, E&P Capital research
