After reporting heavy losses this time last year, Xplan-owner Iress has bounced back reporting profit growth for FY24.
Announcing FY24 results to the ASX on Monday morning, Iress reported statutory net profit after tax (NPAT) grew 164.5 per cent from a loss of $137.5 million last year to $88.7 million.
The group announced the steep loss last year after an increase in operating costs due to salary inflation and improvement reforms on Xplan’s user experience.
Despite the profit uplift, revenue decreased 3.4 per cent from $626.1 million to $604.6 million, which the firm said was due to the divestment “non-strategic” assets. Furthermore, the firm said revenue for the APAC wealth management side of the business was “broadly flat”.
“Iress is now a simpler, leaner organisation with a more efficient cost base and stronger balance sheet that provides both capacity and flexibility,” Iress CEO Marcus Price said in the ASX release.
“Having made the clear strategic choice to focus on our strong key businesses, we are well positioned to capture the significant opportunities present in global wealth management, powered by data & AI, while continuing to provide critical trading & market data infrastructure to the industry.”
The group also reported a 9.3 per cent decrease in operating costs from $520 million to $471.8 million.
Iress had announced it would seek a 10 per cent headcount reduction in early 2023 as part of its business transformation in the early months of Price’s tenure. During the FY, the group reported an 11.2 per cent decrease in staff costs from $327.4 million to $290.7 million, while non-wage operation expenses decreased 10.5 per cent from $82.6 million to $73.9 million.
In its investor briefing pack, Iress cited digital advice for superannuation, continued standardisation of pricing/discounting frameworks, new data product revenues, expanded Xplan capabilities including for retirement income, and community partnerships as its strategic priorities going forward.
The standardisation of pricing and ending of legacy discount agreements has drawn ire from long standing users of the service in the advice community, but despite that, the company held on to see a profit lift.
Iress is close to completing its business simplification program with most of the divestments it had targeted in early 2023 approaching completion.
The company had divested its managed funds administration business in October 2023 to SS&C Technologies for $52 million. This was completed October 2023 with a transitional service agreement (TSA) due to end in October 2025.
The OneVue platform business was sold to Praemium in April 2024 for $1 million with an 18-month TSA due to be completed in October 2025.
In August, Iress completed the sale of its UK Mortgage sales and originations business to the Bain Capital Tech Opportunities fund for $147 million.
In June, Iress agreed to sell its UK portfolio management software Pulse to SecuritEase Holdings UK, a member of the New Zealand-based SecuritEase group, however the cost was not disclosed.
The proceeds of the completed divestments have been used to retire debt to strengthen the firm’s balance sheet.
At the start of the year, it was announced the superannuation technology business would be sold to Apex Group which will be completed later in the year.
The deal is worth $40 million, which will be paid in cash after completion, plus additional payments of up to $20 million over 12 months dependent on revenue milestones.
