Iress (IRE) H2 2024 earnings summary

Executive summary

• Achieved record FY24 results ahead of guidance, driven by a multi-year transformation program, cost discipline, and focus on core businesses, resulting in a materially strengthened balance sheet.

• Embedded new management disciplines, reset cost and asset base, and reinstated a final dividend of 10 cents per share after a pause during transformation.

• Divested non-strategic assets, now focused on Trading & Global Market Data and Wealth Management, with Superannuation business sale to Apex Group expected to complete in Q2-25.

• Significant uplift in customer sentiment, with Net Promoter Score up 25 points year-over-year.

Financial highlights

• Adjusted EBITDA up 25.2% to $132.8m; margin expanded by over 500bps to 22.0% year-over-year.

• Underlying EPS up 72.4% to 34.3 cps; NPATA increased 192% to $30.1m; statutory NPAT of $88.7m, up $226.2m from prior year loss.

• Free cash flow up 192% to $30.1m; net debt reduced by over $200m to $111.6m; leverage ratio down to 1.0x from 2.5x.

• Revenue down 3.4% to $604.6m due to asset sales, but up 4% on a continuing business basis.

• Operating costs down 9% to $471.8m; headcount reduced by 15% to 1,530.

Outlook and guidance

• FY25 guidance: NPATA $54m–$62m (up 80%–106% vs FY24), Adjusted EBITDA $127m–$135m.

• Revenue growth expected at 4–5% for 2025, with cost growth at 3–5%, supporting further margin expansion.

• Focus on growth in global wealth management, digital advice, data products, and cloud-based trading technologies.

• Dividend payout ratio target set at 50–70% of NPATA going forward.