Iress share price falls 9% on FY19 results release

The Iress Ltd (ASX: IRE) share price is down in Thursday trade following the release of its 2019 financial results.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Iress Ltd (ASX: IRE) share price is crashing lower in Thursday trade following the release of the company's full-year financial results. 

Iress shares were trading as much as 9.2% lower today and are currently going for $12.61 at the time of writing, representing a 7.14% drop.

How did Iress perform in 2019? 

In 2019, Iress reported group revenue growth of 10% to $508.9 million (+8% in constant currency terms). Revenue growth was underpinned by strong underlying performance in Australia and the United Kingdom. The acquisition in May of international market data business QuantHouse also contributed $21.9 million to group revenue. 

Group segment profit for Iress also increased 10% to $152.1 million (+10% in constant currency terms). The full-year result was at the top end of previously issued guidance. Every segment of the business, with the exception of Mortgages, saw an increase in direct contribution.

In constant currency, Mortgages recorded a 2% drop in operating revenue and a 9% decline in direct contribution. The revenue and margin decline in Mortgages was a result of timing and mix of client projects, as well as investment in Australia.

The standout performer was the UK and Europe which was the largest contributor to overall growth for the group. The direct contribution from the UK and Europe was up 17% to $91.9 million. Strong ongoing demand for Xplan, Private Wealth, Sourcing and a contribution from QuantHouse were the main drivers of the result. Underlying margins in the UK and Europe also rose 2% to 68%, reflecting the improved operating leverage in that market. 

Net profit after tax for the group rose 2% to $65.1 million. However, excluding the impact from adopting the new lease accounting standard AASB16 and the QuantHouse acquisition, net profit was up 11% to $71.0 million.

Earnings per share increased 1% on 2018 to 37.9 cents, while Iress also declared an unchanged final dividend of 30 cents per share, franked at 40%. 

Outlook for 2020 

Iress expects 2020 segment profit to grow between 3% and 8% ($156 million to $164 million) on a constant 2019 currency basis. This forecast includes the net impact of the company's recent acquisitions of QuantHouse and BC Gateways.

Management also noted that the execution of medium-term growth opportunities will bring 2020 investment ahead of revenue.

Iress expects growth to be weighted heavily towards the second half in 2020. The predicted skew in earnings is a result of the timing of investment, revenue and client projects.  

Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia has recommended IRESS Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Fallers

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

The worst 3 ASX 200 stocks to buy and hold in October unmasked

You would have done well to avoid these three ASX 200 stocks in October.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why AFT, Amcor, Corporate Travel, and Macquarie shares are falling today

These shares are ending the week in the red. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why AGL, Imugene, Star, and Woolworths shares are dropping today

These shares are dropping on Thursday. Let's see why investors are selling them.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Fallers

Why Corporate Travel Management, JB Hi-Fi, Mineral Resources, and Syrah shares are rising

These shares are having a strong session. Why are investors buying their shares?

Read more »

A guys points his fingers down.
Share Fallers

Why Brainchip, Cettire, Star, and Woolworths shares are being sold off today

These shares are having a difficult time on hump day. But why?

Read more »

Three guys in shirts and ties give the thumbs down.
Share Fallers

Why Black Cat, BlueScope, Cettire, and Coronado shares are falling today

These shares are missing out on the good times on Tuesday. But why?

Read more »

a business man in a suit holds his hand over his eyes as he bows his head in a defeated post suggesting regret and remorse.
Share Fallers

Why Adriatic Metals, Metcash, Paladin Energy, and Westgold shares are tumbling today

These shares are starting the week in the red. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Down 36% in 3 weeks, why is the Mineral Resources share price getting hammered again on Friday?

ASX investors are bidding down Mineral Resources shares again on Friday.

Read more »