Australia’s wealth industry playing catch up: Iress
The financial services software company says the wealth industry is primed for growth as advice needs rise.
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Financial services software company Iress says the wealth industry is primed for growth as the great wealth transfer gets underway and advice needs rise.
Speaking to The Australian after handing down the company’s full-year result, which showed Iress swung to a profit in 2024, chief executive Marcus Price said Australia’s wealth industry was playing catch-up compared to other Western markets.
“When you look at this industry worldwide, it’s growing at a rate of knots. … you’ve got the prosperity effect going on in the West, wealth transfer between generations, a general effect of people wanting advice with more products and so forth. There is a huge unadvised problem all over the world in the Western markets.
“What’s happened in Australia is a dislocation of that, with the Royal Commission and the restructuring of our industry. So we’re playing catch up, frankly,” Mr Price said.
“These markets are set to grow and the private equity interest in those reflects that. So I think you’re going to see growth in (our) core markets,” he added.
Iress provides software to the financial services industry, including financial advisers and fund managers, in Australia, the UK, Europe and the US.
Mr Price was speaking after ASX-listed Iress reinstated dividends after swinging to a profit for the full year. Despite the turnaround, Iress shares tumbled 16 per cent through Monday’s session as the company disappointed with its earnings guidance.
For the 12 months through to December 31, Iress posted a net profit of $88.7m, swinging from a $137.5m loss in 2023 as it shed non-strategic assets to streamline the business.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), its preferred measure, rose 25 per cent to $132.5m.
Operating revenue was $604.6m, down 3 per cent on the prior year, but was substantially impacted by the divestment of non-strategic assets.
Revenue increased 4 per cent on a continuing business basis, driven by a 12 per cent jump in revenue for the UK business.
Through the year Iress divested its Platform, Pulse, and Mortgages businesses and has entered into a binding agreement to sell its superannuation business this year.
It used the proceeds from the sales to pay down debt and declared a final 2024 dividend of 10c per share.
The company also guided to higher dividends for the current financial year of 23c, at the upper end, on adjusted net profit guidance of between $54m and $62m.
It expects adjusted EBITDA to be in the range of $127 to 135m. This was below consensus expectations of $142m.
In afternoon trade, Iress shares were trading at $7.54, down 16 per cent.
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Originally published as Australia’s wealth industry playing catch up: Iress
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