The Iress Ltd (ASX: IRE) share price is up nearly 2% this morning following the release of the company’s first-half 2019 results. Here are some of the key points.
About Iress
Iress is a technology company that provides software to the financial services industry. Through its global team of 1,950 people, Iress provides software and services for trading and market data, financial advice, investment management, mortgages, superannuation, life and pensions and data intelligence.
The Numbers
Iress reported group revenue of $241.8 million, representing growth of 5% on 1H18 and 3% on 2H18. Segment profit was $74.1 million, up 10% on 1H18, while reported net profit after tax (NPAT) declined by 5% to $30.4 million.
The declining NPAT reflects the adoption of the new lease accounting standard AASB16, an acquisition, and changes to remuneration models.
The UK and Europe segment saw the biggest growth in revenue of around 13%, while the mortgages segment was the only one to record declining revenue (down 2%). Recurring revenue was around 90% in 1H19.
Dividends
Iress declared an interim dividend of 16 cents per share, 10% franked, which is the same as the interim dividend in 2018. The dividend will be paid on 28th September 2019 with a record date of 6th September 2019.
Management Commentary
Iress chief executive Andrew Walsh said demand for Iress’ services remained strong.
“Demand and delivery for our software and services remains strong as technology continues to play an increasingly important role for financial services businesses globally,” he said.
Looking forward, Mr Walsh said: “In line with previous guidance, we expect 2019 reported Segment Profit growth to be within the range of 6-11% on a constant 2018 currency basis including the impact of adopting new accounting standards and excluding the acquisition of QuantHouse”.
Outlook
As well as the 6-11% growth rate mentioned above, Iress expects reported segment profit in 2019 to be in the range of $144 million to $151 million on a constant currency basis. Non-operating costs excluding acquisition-related items are expected to be substantially lower in 2019, in the range of $4 million to $6 million.
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Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.
