Iress Reports Impairment-Driven Loss

By Stuart Condie

SYDNEY-- Australian software provider Iress recently announced a loss for the 12 months ending December, resulting in the cancellation of its full-year dividend. The company reported a loss of A$137.5 million, a significant shift from the A$52.7 million profit recorded in the previous year. While revenue saw a modest increase of 2% to A$625.7 million, Iress faced a A$130.4 million goodwill impairment related to its U.K. business. Additionally, there was a 68% rise in amortization of intangible assets to A$27.0 million.

Analyst Expectations and Financial Outlook

The average analyst forecast had predicted a net profit of A$47.1 million from revenue of A$634.80 million. Despite this, Iress decided not to pay a dividend at this time. The company stated it will reassess dividends once leverage, currently at 2.5 times underlying earnings as of Dec. 31, reaches its target range of 1.0-1.5 times underlying earnings.

Debt levels decreased by A$5.8 million from the previous year to A$320.3 million by the end of December following the sale of its managed funds administration business. Iress anticipates further debt reduction in fiscal 2024 through additional asset sales.

Market Analysis and Future Projections

Although analysts support Iress's debt reduction strategy, concerns have been raised regarding growth prospects in its mature core markets. The company forecasts an Ebitda of A$137 million to A$147 million for fiscal 2024, an improvement from the previous guidance of A$135 million to A$145 million.

CEO Marcus Price expressed confidence in Iress's growth potential for 2024, citing progress exceeding expectations and a commitment to completing the transformation program by the end of FY24.