Iress Holds Steady in H1 2025 Amid Strategic Divestments and Debt Reduction
Iress Limited reported a stable half-year profit for 2025, maintaining net earnings despite a slight revenue dip and ongoing divestments. The company strengthened its balance sheet through debt reduction and declared a healthy interim dividend, while exploring potential acquisition opportunities.
- Revenue down 3% to $299.5 million due to divestments
- Net profit after tax steady at $17.3 million
- Adjusted EBITDA declined 4% but grew 9% excluding divested assets
- Net debt reduced by $19 million following asset sales and refinancing
- Interim dividend declared at 11.0 cents per share, 50% franked
Stable Profit Amid Strategic Shifts
Iress Limited has delivered a steady financial performance for the first half of 2025, reporting a net profit after tax (NPAT) of $17.3 million, unchanged from the same period last year. This result comes despite a 3% decline in revenue to $299.5 million, primarily driven by the sale of non-core assets including its Superannuation business.
The company’s adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) fell 4% to $64.4 million. However, when excluding divested businesses, adjusted EBITDA actually rose by 9%, reflecting strong growth in key segments such as UK Wealth & Sourcing and Global Trading & Market Data.
Segment Performance Highlights
The Global Trading & Market Data segment saw an 8% revenue increase to $124.8 million, supported by pricing standardisation and reduced customer churn. Adjusted EBITDA for this segment improved 10%, underscoring operational efficiency gains.
UK Wealth & Sourcing experienced a robust 12% revenue growth to $57.4 million, bolstered by a significant client implementation project and favourable currency movements. This segment’s adjusted EBITDA surged 57%, highlighting its expanding contribution to the group.
Conversely, the APAC Wealth segment faced a slight 2% revenue decline, impacted by client restructuring, with adjusted EBITDA down 7%. The divested business segment, which includes the recently sold Superannuation business and the QuantHouse unit pending sale, saw a 34% revenue drop.
Balance Sheet Strength and Capital Management
Iress has made notable progress in strengthening its financial position. Net debt was reduced by $19 million to $92.6 million, aided by proceeds from asset sales and a refinancing of bank facilities that lowered borrowing costs. The company’s net assets increased 2% to $386.8 million.
Capital expenditure focused on software development rose, reflecting Iress’ commitment to innovation and product enhancement. Intangible assets, including goodwill and capitalised software, increased by 4% to $460.8 million, supported by currency translation effects and ongoing investments.
In line with its stable earnings and strong cash flow, Iress declared an interim dividend of 11.0 cents per share, 50% franked, marking a return to shareholder distributions after no interim dividend was paid in the prior year.
Strategic Moves and Future Outlook
During the period, Iress completed the sale of its Superannuation business and entered into an agreement to divest QuantHouse, signalling a continued focus on core software offerings. The company also announced it is in early discussions with potential acquirers, exploring a possible acquisition offer that could reshape its future trajectory.
Management remains cautious but optimistic, having successfully concluded a two-year transformation program that reduced costs and improved operational focus. No impairment of goodwill was identified, indicating confidence in the underlying value of its core businesses.
Bottom Line?
Iress’ steady half-year results and strengthened balance sheet set the stage for strategic decisions ahead, with acquisition talks adding a new layer of market intrigue.
Questions in the middle?
- What are the potential terms and timeline for the possible acquisition of Iress?
- How will the proceeds from divestments be reinvested to drive future growth?
- What impact will new accounting standards have on Iress’ financial reporting going forward?
