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Integrated Research share price on watch as record profit anticipated

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The Integrated Research Limited (ASX: IRI) share price is on watch this morning after the technology provider announced it expects to report record revenue and profit in FY20. Revenues and profit are expected to grow between 8% and 11% and FY20. 

What does Integrated Research do? 

Integrated Research is involved in the design and implementation of technology that optimises business operations, predicts disruptions, and automates business processes. Now with over 1,000 customers in 60 countries, Integrated Research provides performance management software for critical IT infrastructure, payments, and unified communications. 

What did Integrated Research announce? 

Integrated Research announced that, based on internal management accounts, it anticipates record revenues and profit in FY20. The company expects total revenue to be in the range of $109.5 million to $111 million, which represents growth of 9% to 10% on the prior corresponding period. Total profit after tax is expected to be in the range of $23.6 million to $24.2 million, compared to $21.9 million in FY19, representing growth of 8% to 11%. 

How has Integrated Research been performing? 

The Integrated Research share price took a tumble in the March downturn but has since recovered and surpassed previous highs. From a low of $2.34 in March, the Integrated Research share price has gained 65% and is currently trading at $3.87. As a result of the rise in the share price, Integrated Research’s price-to-earnings ratio now sits around 30. 

In the first half, Integrated Research reported its fifth consecutive year of interim profit growth. Total revenue increased 6% to $53.2 million and profit after tax increased 1% to $11.8 million. A fully franked interim dividend of 3.5 cents per share was paid. Significant sales during the half year came from AT&T, BT, Capgemini, ANZ, and HCL Technologies. with over 95% of the company’s revenue derived outside Australia. 

In the company’s first half announcement, chair Paul Brandling stated, “the company is well positioned to deliver on its hybrid cloud strategy as a result of the new SaaS platform going live and ready for first beta customers to trial its new Payment Assurance products over the coming months.”

What is the outlook for Integrated Research? 

Integrated Research has been steadily increasing its earnings per share over recent years. With share prices frequently following earnings per share, an appreciation in the Integrated Research share price could be expected if it can continue to grow earnings. 

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Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Integrated Research Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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