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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »

Agricultural ASX share price on watch represented by farmer in field looking at tablet computer.
Earnings Results

Graincorp share price lifts off as dividend is maintained and debts plunge

ASX 200 investors are bidding up the Graincorp share price today. But why?

Read more »

Smiling elderly couple looking at their superannuation account, symbolising retirement.
Earnings Results

Why is this ASX 200 stock avoiding the market selloff and pushing higher?

Not all shares are falling with the market on Thursday.

Read more »