Iress (ASX: IRE) share price edges higher as profits climb

Here’s why the financial technology shares are climbing in early trade…

| More on:
A team of people giving the thumbs up sign representing APA and Wesfarmers doing a deal to study green hydrogen transport using an APA gas pipeline

Image source: Getty Images

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.

Should you invest $1,000 in Iress right now?

Before you consider Iress, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Iress wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Earnings Results

A woman stares at the candle on her cake, her birthday has fizzled.
Earnings Results

Incitec Pivot share price fizzles despite half-year earnings increasing tenfold

Explosive profits lose their firepower amid breakup plans inside Incitec.

Read more »

Elders share price Farmer jumping for joy in field
Earnings Results

Elders share price jumps 9% on stellar first-half profit growth

Elders has started the week very strongly. Here's why...

Read more »

A happy couple who are customers of Flight Centre wait for their flight at an airport lounge
Earnings Results

Webjet share price falls on earnings miss, but broker sees ‘results as a positive’

Webjet's earnings missed expectations but one leading broker remains positive...

Read more »

Dollar sign made from grass growing from ground as one person drips water on it and another holds coin
Earnings Results

Nufarm share price tumbles despite huge first-half profit growth

Nufarm has delivered a strong half-year result...

Read more »

gaming asx share price rise represented by slot machine paying jackpot
Earnings Results

Jackpot! Aristocrat share price jumps on stellar half-year results

Aristocrat has delivered a strong half-year result this morning...

Read more »

a tourist complete with suitcase and backpack with ticket in hand jumps for joy with his feet off the ground against a brightly coloured background.
Earnings Results

Webjet share price on watch amid 258% revenue jump in FY22

Webjet delivered strong top line growth in FY 2022...

Read more »

Team celebrating corporate success screaming with joy.
Earnings Results

OFX share price soars 8% on record FY22 results

A huge year for the company sees investors rallying behind its stock today.

Read more »

Sad Probuild construction worker in front of half built house puts his hand to his forehead as he talks on the phone
Earnings Results

James Hardie share price stumbles despite 36% lift in annual sales

Both quarterly and yearly net income figures increased markedly.

Read more »