Iress on track with ‘significant’ transformation strategy
Iress has provided updated results from last financial year and expected FY24 earnings as it nears completion of its transformation program by the year’s end.
In an ASX statement, the platform offered updated guidance on its underlying EBITDA which now trends “more favourably” due to stabilised revenue and lower staff costs.
The previous figures for Iress’ H2 FY23 underlying EBITDA was $58–$62 million, which has now been revised up to $63–$68 million.
Its overall FY23 underlying EBITDA has grown from $118–$122 million previously to $123–$128 million.
In addition, the platform’s projected underlying EBITDA for the 2024 financial year was updated from $124–$134 million to $135–$145 million.
According to Marcus Price, Iress’ group chief executive and managing director, these “modestly” upgraded earnings are slightly ahead of the firm’s expectations.
“Our improved FY23 guidance announced today shows we are on the right path. We still have work to do but we remain on track to conclude our transformation program by the end of next year with benefits to continue into FY25 and beyond,” he said.
The firm also recorded a minor 2.6 per cent revenue growth in the second half of the year compared to 1H23.
Price continued: “Iress’ transformation plan has been accelerated and is delivering outcomes. We brought forward a number of transformation initiatives which are delivering improvements at the cost and revenue lines.”
This includes Iress’ completed sale of its managed funds administration (MFA) business to SS&C Technologies for $52 million in October, with plans to use the proceeds of the deal to retire debt.
It had acquired the MFA business, one of the country’s largest third-party fund registries with around $900 billion in managed assets across over 1,400 funds, four custodians and 69 fund managers, as part of the OneVue purchase in November 2020.
The firm is now implementing a five-year business plan to support its reset strategic objectives, led by a refreshed leadership team.
“The transformation program continues at pace into 2024, with an ongoing focus on improving customer value, innovation and further cost efficiencies,” the ASX statement continued.
Moreover, Iress is working to stabilise the user experience of Xplan, its core trading software. The technology uplift includes providing improved tools to deliver better customer value, which will be completed by Q1 FY24.
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Jasmine Siljic
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