Iress swings back to profit, shares slide on soft guidance
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The news: Financial services software group Iress has reinstated dividends after swinging back to a full-year profit, but a softer profit guidance sent its shares lower.
The numbers: The company reported a net profit of $88.7 million for the year to December, compared to a $137.5 million loss a year ago. However, revenue was down 4% to $604.6 million, while earnings came in at $132.8 million, up 25% from a year ago and slightly above its guidance. It rewarded shareholders with a final dividend of 10 cents a share.
Despite this, shares in the company are down nearly 15% to $7.68 in early trading.
The context: The turnaround comes after the company shed a number of non-strategic assets to streamline its business and cut down debt. The year ago numbers were also marred by asset impairments.
The group has outlined a lower FY25 net profit in the range of $54 million to $62 million, and steady earnings in the range of $127 million to $135 million, saying it will continue to invest in product innovation in its core business. It comes amid pushback from customers after the company announced price increases in late January.
E&P Capital analyst Olivier Coulon said in a note that the result was a slight beat to the company’s guidance in mid-December, but the outlook for FY25 earnings is “soft relative to current VA Consensus” and would lead to analyst downgrades.
The sources: ASX, E&P Capital research
