Reset coming
FY22 RESULT
Need To Know
- In-line with bottom end of revised guidance
- New CEO rearranging furniture, updated guidance in April
- Final dividend 30cps unfranked (full year 46cps), payment 17 March
The FY25 targets set under the previous CEO are clearly under review. An April Investor Day will reveal what Marcus Price believes is necessary to change the operating model.
Result. In-line with revised segment profit growth guidance of $166-170m, IRE reported segment profit of $165.1m for FY22. Revenue of $617.9m was also in line with market expectations. Divisionally, UK Lending and North America were more than 5% short of consensus while APAC, UK Wealth and SA were broadly in-line.
Net debt at 31 December 2022 was $326.1m. The dividend and share buyback have pushed leverage up to 2.2x segment profit.
Guidance. IRE is guiding 2023 segment profit to be at or above the level of 2022 on a constant currency basis. Efficiency improvements begun last year will extend into 2023 to improve the operating performance.
Investment View
The new CEO is delving deep into IRE’s commercial and operating model. The April Investor Day briefing will reveal what changes, if any, will be made and guidance for FY23 will be based around that.
The previous FY25f targets may not survive, but investors will be keen to learn how IRE intends to generate growth that seemed to be lacking, as evidenced by the 2023 result.
In the absence of that directional insight, the stock may simply tread water until the strategy is unveiled.
Our Hold recommendation remains valid in these circumstances.
Stock Overview
Share Price
Company Overview
Iress is a technology company providing software to the financial services industry
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