The Iress Ltd (ASX: IRE) share price has edged higher in early trade after the company reported its latest half-year results to the market.
At the time of writing, Iress shares were up 0.46% to $15.15.
Iress share price jumps on 9% profit increase
The Aussie financial software group reported its half-year earnings for the period ended 30 June 2021 (1H 2021) including the following:
- Pro forma revenue up 1% on the prior corresponding period (pcp) to $298.7 million
- Pro forma net profit after tax up 9% on pcp to $27.1 million
- Cash conversion of revenue up 400 basis points on pcp to 90%
- Interim dividend maintained at 16 cents per share, franked to 80%
Investors have responded well to the result with the Iress share price climbing higher despite broader declines in the market.
What happened in FY21 for Iress?
One notable recent event was the acquisition of OneVue in November 2020. That means many of Iress' earnings figures reported today are on a pro forma basis (assuming that Iress owned OneVue for the entire 2020 year).
Iress continued to build on existing growth strategies across the United Kingdom, superannuation, and investment infrastructure. The financial technology group reported more than 10,000 clients and an annual contract value of $602.8 million.
The Iress share price has been climbing higher in 2021 and has edged higher to start today's session.
What did management say?
Iress chief executive Andrew Walsh was upbeat following the results release:
We are pleased to deliver solid results for the first half of 2021, in line with full-year guidance. Pro forma net profit was up 9% and pro forma EPS was up 6% versus the prior comparative period.
The improved performance was driven by growth in Trading and Market Data, a full period contribution from OneVue and good progress with new client implementations across Super, Private Wealth and in the UK.
As expected, revenue in Australian financial advice declined as a result of resizing of enterprise client contracts. Underlying demand remains resilient.
Following a comprehensive Board-led review it is clear the opportunity for Iress is greater than previously anticipated… With our strong operating businesses and rising returns on growth investments, we enter the second half of the year with a positive outlook.
What's next for Iress and its share price?
The Iress share price has edged higher after its half-year results kept it on track for full-year guidance. Iress reaffirmed its guidance for segment profit at $164 million to $168 million on a constant currency basis.
Earnings in the second half of the year are expected to accelerate, with guidance assuming 16-21% growth in segment profit compared to the first half.
The Iress share price has surged 41.0% higher in 2021 and has more than tripled the gains of the S&P/ASX 200 Index (ASX: XJO) this year.
