Iress drives focus back to Australian advice software business
Iress has reinvested in its core trading and advice activities, including a digital advice capability, as it releases its full year 2022 results.
In its results for the 12 months to 31 December, 2022, the ASX-listed technology firm said it had seen “solid revenue growth and renewed focus on core software strengths to accelerate returns”.
Underlying net profit after tax (NPAT) was up from $68.1 million to $72.3 million, an increase of 6.1%, while revenue was up 5% from $595.9 million to $622.7 million.
Superannuation revenue was up 15% thanks to a new client in Commonwealth Superannuation Corporation (CSC).
The firm indicated it would be focusing on its strengths in advice and trading software in Australia going forward rather than initiatives which were lower return including 11 legacy applications which had been decommissioned during the year.
It said: “We have reallocated resources away from low-return initiatives to reinvest in our core trading and advice software. We have successfully launched Investment Infrastructure [Iress Connectivity Network] in November 2022, with the 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.
“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 trading apps for advice and trading.”
In a call post the results, chief executive Marcus Price, added: “There is scope for continued organic growth in advice, trading and superannuation in Australia and for our software to continue helping clients to grow their business and deliver operating leverage.”
The firm noted several of its offshore markets, including the United Kingdom, had underperformed over the year and it was considering its next steps, considering it was funded by the Australian franchise. Some 80% of total group revenue came from Asia Pacific where Iress said there was “ongoing demand for trading and financial advice software with high client retention” while UK and Europe underperformed with flat revenue.
“Outside Australia, a number of our offshore markets underperformed. The UK in particular was disappointing with overall revenue growth declining by 1% in constant currency. Growth in recurring revenue in private wealth and trading cost offset churn in retail wealth in the region.
“We are evaluating business models and product strategies to determine the best path for success in this market, including how we can improve returns for shareholders.
Price added: “Over the years, a significant proportion of investment dollars have been focused offshore and a number of Australian clients have felt underserved. We’ve already begun addressing this by reallocating resources to address this. We need to invest in this powerful franchise and strengthen the core to sustain growth and returns”.
AUTHOR
Laura Dew
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