Financial software and service provider Iress Ltd (ASX: IRE) is set to release its results for the 12 months to 31 December 2014 on February 25. Iress operates a number of dominant services to financial institutions and investors. These include:
- Financial planning software XPLAN,
- The highly regarded IRESS sharemarket platform, and
- Class Super, a self-managed super fund monitoring and reporting platform.
2014: A year of expansion
IRESS made a number of important business decisions over the last 18 months that are expected to boost earnings per share by as much as 25% this year. IRESS purchased the Avelo group as well as Spotlight and Plantech in 2013, allowing the group to launch IRESS and XPLAN into the UK, and XPLAN into South Africa.
Iress has also launched the IRESS platform into Canada, while an expansion into Asia is underway but is less developed.
Earnings Expectations
Analysts are expecting a massive year of growth from Iress. Investors should expect:
- Earnings per share growth of 18% from 37.4 cents to 44 cents
- Net profit after tax of $70 million, up from $53 million last year
- Dividend per share of 40 cents, up from 38 cents last year
In addition, investors should look for a positive outlook of low to mid single digit growth in the year ahead. It's also worth looking for positive commentary about the state of financial markets and the impact on broking volume, evidence of consolidation or growth in Australian market share, and positive signs from the UK, South African and Asian businesses.
Dividend Ambitions
Iress has typically been a company that pays out a large portion of free cash flow as dividends. Based on today's price of $11.00, Iress is rewarding investors with a dividend yield of 3.6%, franked at around 50%.
