‘Turnarounds are never easy’: Iress shifts focus to organic growth

Having taken some “quite tough medicine” during its 18-month transformation program, Iress is now doubling down on organic growth.

Speaking at its annual general meeting (AGM) on 2 May, Iress’ chairman Roger Sharp described FY24 as a “pivotal year” for the financial services technology firm.

“Having completed an 18-month transformation program, we are now a leaner and more focused wealth software company with a significant trading and market data division,” he said.

Namely, Iress simplified the business through six divestments that were not core to its refreshed strategy, the chairman said.

This included the sale of its managed fund administration (MFA) business to SS&C Technologies in August 2023 for $52 million. In February 2024, it announced it would sell its platform business to Praemium and it divested its UK mortgages business to Bain Capital Tech Opportunities LP for $167 million.

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Most recently, Iress announced it had entered into a binding share sale and purchase agreement to divest its European headquartered low-latency market data business, QuantHouse, to BAHA Tech Holding AG (BAHA) in April.

Recognising the difficulties of enacting a transformation strategy, Sharp said: “Turnarounds are never easy and this one certainly hasn’t been. Having taken some quite tough medicine on this journey, we’re pleased to see the results now being reflected in our increased focus and in our improving financial performance.

“So having rightsized and reshaped this business, we aren’t stopping – we are working on multiple ways of delivering organic growth.”

Also delivering his address at the AGM, Iress’ managing director and CEO Marcus Price said the firm is “just getting started” as it turns its focus to growing organically.

He said: “We are pleased with the progress and certainly the outcomes are tangible, and there for you all to see. However, we are just getting started. When we first announced our transformation program, we highlighted the need to reset, refocus and grow the business. This was all in the service of resetting the platform to grow this business.”

Price described the wealth technology opportunity as large and growing in Australia, particularly as the industry seeks to address the issue of financial advice accessibility.

Following a period of regulatory hurdles to address this challenge, the managing director expressed a positive outlook on the future of wealth management.

“There has certainly been a short-term dislocation in the growth and evolution of the wealth industry in Australia caused by regulatory intervention. We think this is now done,” he said.

“This short-term interruption to progress should not distract us from the opportunities that present themselves to us. The global wealth technology markets are vibrant, fast-paced and growing rapidly. They represent one of the most exciting sectors to invest in and participate in the world today.

“Where does that leave Iress? Well, we have successfully reset and refocused Iress and the work we have executed over the past 18 months means we are now in the right position to double down and focus on growth in wealth technologies.”

In particular, the firm will be accelerating product innovation and strategic growth initiatives, he said.

This will be achieved through innovation in its core businesses of wealth, alongside trading and market data, capturing new revenue streams in digital advice and retirement income, as well as advancing initiatives in data and artificial intelligence.

Earlier this year, Iress also announced an expected FY25 adjusted EBITDA of $127–$135 million, NPATA of $54–$62 million, and UPAT of $65–$73 million.

“Today we reaffirm that we are on track to deliver on that guidance,” Price said.