Iress reports ‘strong’ results for advice business

Iress has declared underlying revenue of $622.7 million in its full-year results released on Monday, an increase of 4.5 per cent on the previous financial year in constant currency terms.

According to Iress, segment profit was consistent with the previous year at $166.8 million, which was in line with the revised guidance provided by the firm last September.

Net profit after tax (NPAT) was also inside its revised guidance range at $54.0 million in constant currency terms, down by 28.6 per cent, while underlying NPAT adjusting to exclude non-operating and significant items (post tax) was $72.3 million, an increase of 6.1 per cent.

Underlying EPS was reported to be up by 9.7 per cent in constant currency, which the firm said was assisted by its share buyback program completed in October last year.

“The 2022 results once again demonstrate the strength of our advice, trading, and superannuation businesses in Australia, with domestic revenues increasing for the APAC region up by 6 per cent on a constant currency basis,” said Iress chief executive officer (CEO) Marcus Price.

“Here, Iress enjoys leading market share, with excellent products critical to our clients’ businesses while playing in large, growing addressable markets with long-term recurring revenues.”

Iress stated that $2.8 trillion in trades and an average of 20,000 new clients were added to Xplan each month in Australia over the period. The firm also indicated that, with the future of the advice regulatory landscape under review, it is “well placed for future reforms”.

“While we saw another strong result in Australia, there is significant room for improvement by reinvesting in innovation in our core software to build the next generation of advice and trading technology,” commented Mr Price.

Since commencing as CEO in October last year, Mr Price said that Iress has been conducting a thorough analysis of its performance across geographics, segments and the commercial and operating model in place, which is expected to be completed next month.

The firm has already progressed on several immediate priorities, including the reallocation of resources away from low-return initiatives to reinvest in its core trading and advice software.

“We successfully launched Investment Infrastructure in November 2022, with a focus on solving a key pain point for advisers by providing efficient connectivity between Xplan and third party platforms and insurers to make it easier to execute on advice,” said Mr Price.

“Significant progress has been made on a new digital advice capability as we reimagine the future of advice in our major markets. Work has also commenced on new front-end mobile apps for advice and trading.”

On the outlook, Mr Price said that Iress was very positive about the strengths of its core business and opportunities to deliver greater returns for shareholders.

“In 2023, we expect our segment profit to be at or above the levels of 2022, with the potential to do better as an outcome of the analysis currently underway. Given the scope of this work and the impact it is likely to have on both near and longer term performance, we will update guidance in April at our Investor Day,” he said.

“What really matters to me and the team at Iress is ensuring we finalise the review at pace, evaluate the findings in a considered way, and execute the changes needed to deliver against the enormous potential we see for Iress, our shareholders, clients and people.”