Iress projects ‘significant’ increase in 1H24 EBITDA
Iress is expecting a 50 per cent EBITDA rise the first half of the 2024 calendar year compared to the prior corresponding period.
In an ASX announcement, the financial services technology company expects its adjusted EBITDA for the six months to 30 June to be between $65–$67 million. However, the result remains subject to audit review which is ongoing.
This is a “significant increase” of approximately 50 per cent from $44 million in 1H23, the firm described.
The material uplift in earnings was attributed to Iress entering the final stages of its transformation program, which is set to reach completion on 31 December 2024. This included Iress’ completed sale of its managed funds administration business to SS&C Technologies for $52 million in October 2023.
More recently, the technology firm successfully completed the sale of its platform business OneVue on 15 April 2024, bringing $4.1 billion in funds under administration over to its new owner, Praemium. When first announced in February, Iress CEO Marcus Price said the decision to opt for Praemium was a “natural home” for the platform.
The ASX statement continued: “A disciplined approach to cost management and revenue in line with expectations have seen a significant improvement in operating leverage through the period.
“Earnings in Iress’ core businesses of wealth and trading and market data are expected to be materially higher on pcp, alongside UK wealth which has continued to perform well under strengthened leadership.”
In addition to the OneVue divestment, Iress also sold its Pulse portfolio management software in May while the sale of the UK mortgages business is expected to complete by 1 August 2024 following the successful completion of all conditions precedent.
“Net proceeds of all divestments have been used to retire debt, strengthening the balance sheet and paving the way for a return to maintainable dividends.”
The first half of the calendar year also saw the technology firm busy strengthening its security settings after suffering an unauthorised access of its user space on GitHub earlier in May. GitHub is a third-party code repository platform which manages software code before it goes live, but no client information is stored on the platform.
At the time, Iress said there was no evidence that client data and Iress’ production or client software had been compromised as a result of the issue. However, a later investigation of the cyber breach found it affected its OneVue production environment which contains client data.
Iress then issued an update denying the validity of “certain statements” made by an alleged threat actor and completed its internal investigation in early July.
“The investigation has found no evidence of unauthorised access to Iress’ production environment, software or client data other than a limited portion of Iress’ OneVue production environment.”
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