Iress has seen revenue growth of 2% in the first half of 2024, against the same period last year, thanks in large part to a successful UK business and new leadership, the firm said.
The firm reported recurring and total revenue growth of 4% and 5% respectively on a continuing businesses basis (excluding the recently divested UK Mortgages and Pulse businesses) in H124 compared to H123. Iress saw its adjusted EBITDA growth hit 34% in H24 compared to H123, and an adjusted EBITDA margin of 19% over the same period.
Iress Group CEO Marcus Price said the firm is “executing well on our transformation initiatives”, a program of cost cutting and investing in sales, technology and account management, which the firm is set to have completed by the second half of the year.
“Strong action on cost reduction has delivered operating leverage with our adjusted EBITDA margin up 760 basis points to 21.7% and adjusted EBITDA growth of 52%. Along with disciplined capital management we are driving increased returns and have upgraded our adjusted EBITDA guidance to $A135 million-$141 million for FY24, adjusted to $A126 million-$132 million post asset sales.
“Through the sale of non-strategic assets, we have considerably strengthened our balance sheet which sits at 1.2x leverage following the completion of the sale of our UK Mortgages business early in the second half. Pleasingly, we now expect to be in a position to reinstate a final dividend for FY24.”
The firm divested non-core businesses in UK Mortgages (sold for £85 million in a cash deal) and Pulse, enabling the firm to focus on its “core competencies” of sourcing and wealth in the UK.
Iress also re-signed three significant clients in UK wealth, opening up approximately £43 million in revenue over the next five years.
Looking ahead, the firm expects full year 2024 adjusted EBITDA to hit somewhere between US$135 million and US$141 million, against previous forecasts of US$122 million and US$132 million.
Iress’ executive managing director for the UK, Alistair Morgan, said: “We have now streamlined our business through the targeted Mortgages and Pulse divestments to concentrate on our core Wealth and Sourcing businesses, and are continuing to invest in our product and service delivery to clients. We are already seeing the benefit of this with improved revenue and margin, a testament to the dedication and client-focus of our people.
“The renewal of three enterprise Wealth clients with a combined contract value of £43 million over the next five years and the consolidation of our clients’ acquisitions onto Xplan demonstrates that the model of empowering the UK business to autonomously operate its product, technology and commercial operations is resonating with clients. Combined with new wins in Wealth and Sourcing, this demonstrates the strength of our value and commitment to clients in a key market for Iress that is poised for future growth.”
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