Iress has upgraded its adjusted EBITDA by $5 million for the 2023–24 financial year in light of the sale of its platform business to Praemium.
The firm sold its OneVue platform business to Praemium in April for $1 million in cash consideration, with further payments of up to $20 million expected over an 18-month period.
It also noted the firm has seen stronger than expected earnings in the year so far and improved confidence for the remainder of the financial year.
The transformation process which the firm embarked on in April 2023 is “well past the inflection point”, the firm said. This five-year program includes a focus on improving customer value, innovation and cost efficiencies.
As a result, it has now the forecast adjusted EBITDA for FY24 from $117–127 million to $122–132 million. The expected exit 2024 run rate is expected to remain unchanged at $140–160 million.
Underlying EBITDA for the previous FY23 was $128.3 million.
Iress chief executive, Marcus Price, said: “We continue to make solid progress on our transformation program and this is reflected in our improved outlook for FY24. This upgrade comes as a result of bringing forward the benefits of transformation, through stronger cost discipline and a clear focus on our core businesses.
“Our progress in asset sales within the managed portfolio is also strengthening our balance sheet. We expect to achieve our target leverage range of 1–1.5x through 2024 after which we will be in the position to consider reinstating dividend.”
As well as the platform sale, the firm also sold its managed fund administration business to SS&C in August 2023 and its UK Mortgages business to Bain Capital for $164 million in March 2024.
Speaking at the company’s annual general meeting on 2 May, Price added the firm has focused on resetting its business structure and cost base, focusing on its core businesses of APAC wealth management, trading and market data and superannuation, establishing the “managed portfolio” division and completing the technology uplift program.
Within the managed portfolio offering, it has split it into UK and other, and will be conducting a strategic review of the businesses within this including whether the UK may be moved back into the core part of the its portfolio.
Shares in Iress are down by 17 per cent over the one year to 2 May, but Price reiterated he is hopeful for future results from the transformation.
“I appreciate that when you’re not living this change every day, it can be frustrating as you wait to see the heavy lifting bear fruit. I want to acknowledge that it has been difficult for many shareholders to be patient at times like this.
“I’d also like to thank my management team and the broader Iress team for their hard work and focus in what was, at times, a challenging year for the company.”
