Iress rebuild reliant on Xplan and investor patience

Iress is determined to get back into the black and to do so it has cut its headcount and is selling off most of its global footprint.

However, sitting at the core of the Iress recovery plans remains Xplan.

As the company sought to explain to investors how it arrived at a 100% decline in net profit after tax to record a loss of $137.5 million, the company also detailed how it intended to climb out of the mire via a 15% reduction in headcount, and via asset sales.

Notwithstanding the explanation, the Iress share price dipped to $8.32.

Iress has already sold its MFA business for $50.5 million and told investors yesterday that it was on track to complete the sale of its Platforms business by 30 April 2024 while claiming there is strong interest in the sale of UK Mortgages business.

At the same time, it said that the separation of its South African and Canadian businesses.

In short, Iress is a very different business to the one which existed just half a decade ago, albeit that Xplan remains the jewel in its crown and the asset around which much of the company’s recovery strategy is being built.

And, included in that growth plan, is an expectation that the Government will deliver Quality of Advice Review changes which will create revenue growth opportunities in digital and scaled advice in superannuation.

The company’s investor briefing reinforced that 2023 had been a transformational year for Iress which had created the pre-conditions for growth.

Iress chief executive, Marcus Price said the company’s balance sheet was strengthening and the proceeds from the sale of its MFA business and other divestments would be used to retire debt.

“Looking ahead, Iress is well-positioned to grow in 2024, while also developing our product strategy to reinvent our world-class core platforms and capabilities for the future,” he said.

Looking over the horizon, Price said Iress’ transformation “is creating capacity for growth and sustained success in its core markets”.

“Throughout 2024 the business will focus on revenue growth, cost efficiencies and reinventing world-class platforms and capabilities in its core businesses for the future.”