Iress today announced its half year results for 2024, with its UK business contributing to a strong performance.
Iress’ Group Chief Executive Officer, Marcus Price, said today in an announcement to the Australian Securities Exchange: “We are executing well on our transformation initiatives and are on track to complete the program in the second half, with benefits being realised well ahead of schedule. Strong action on cost reduction has delivered operating leverage with our Adjusted EBITDA margin up 760 basis points to 21.7% and Adjusted EBITDA growth of 52%. Along with disciplined capital management we are driving increased returns and have upgraded our Adjusted EBITDA guidance to $A135-$141m for FY24, adjusted to $A126m-$132m post asset sales.
“Through the sale of non-strategic assets, we have considerably strengthened our balance sheet which sits at 1.2x leverage following the completion of the sale of our UK Mortgages business early in the second half. Pleasingly, we now expect to be in a position to reinstate a final dividend for FY24.”
Iress’ UK business reported a significant turnaround in financial performance under renewed leadership.
Key financial highlights include:
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Headline revenue growth of 2% when compared the prior corresponding period (“PCP”)
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Recurring and total revenue growth of 4% and 5% respectively on a continuing businesses basis (ie excluding the divested UK Mortgages and Pulse businesses) when compared the PCP
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Adjusted EBITDA growth of 34% compared the PCP3
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Adjusted EBITDA margin of 19%.
Other business highlights included:
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The divestment of non-core businesses in UK Mortgages and Pulse, streamlining the business and enabling Iress to focus on core competencies of Sourcing & Wealth in the UK.
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Significant improvement in earnings, driven by cost efficiency measures and revenue growth in underlying businesses.
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Re-signing of three significant clients in UK Wealth locking in approximately £43m in revenue over the next five years.
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Powering acquisitive Listed and Private Equity backed advice firms, supporting the consolidation of their acquisitions onto Xplan, through Iress’ data migration expertise.
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Accelerated investment in Iress’ Sourcing technology and products to further enhance its market-leading position and offerings to clients.
Iress’ Executive Managing Director - UK, Alistair Morgan, said: “I am really pleased with the results we’ve delivered in the first half of the year and particularly proud of the performance of the UK business unit. We have now streamlined our business through the targeted Mortgages and Pulse divestments to concentrate on our core Wealth and Sourcing businesses, and are continuing to invest in our product and service delivery to clients. We are already seeing the benefit of this with improved revenue and margin, a testament to the dedication and client-focus of our people.
“The renewal of three enterprise Wealth clients with a combined contract value of £43m over the next five years and the consolidation of our clients’ acquisitions onto Xplan demonstrates that the model of empowering the UK business to autonomously operate its product, technology and commercial operations is resonating with clients. Combined with new wins in Wealth and Sourcing, this demonstrates the strength of our value and commitment to clients in a key market for Iress that is poised for future growth.”
