Iress scares investors with big CY22 profit downgrade
Nick Sundich, September 29, 2022
Iress (ASX:IRE) shares fell more than 15% this morning thanks to the company downgrading its profit guidance. The company said it was primarily a timing issue, with expected FY22 revenues being delayed until FY23. But it seems investors suspect there are other issues.
No time to do stock research, but you still want to invest?
Stocks Down Under Concierge gives you timely BUY and SELL alerts on ASX-listed stocks!
GET A 3-MONTH FREE TRIAL TO CONCIERGE TODAY
Iress downgrades its profit
Iress provides software to the financial services industry, including investment management and trading mechanisms. The company had forecast a full year Segment profit for FY22 (which for Iress is the calendar year) of $177m-$183m and an NPAT of $63m-$72m.
This morning it downgraded its Segment profit to $166-$170m and NPAT to $54m-$58m. The midpoints of the new guidance would be downgrades of 9% and 20% from the midpoints of the old guidance for Segment profit and NPAT respectively.
CEO Andrew Walsh asserted sales were still strong, but costs were higher than expected, including USD-priced technology and software. The timing delays meant some revenue would now be deferred into FY23.
Investors ignore the good news
The company’s shares dropped this morning even though there was some good news too.
IRESS (ASX:IRE) share price chart (Graph: TradingView)
Iress told investors it had been chosen by the Commonwealth Super Corporation (CSC), the provider of superannuation software to the public sector, to use IRESS software. The contract runs for an initial five years, but migration will be a more gradual process that will not be reflected in FY22. The first tranche of users will not have their migration completed until July next year.
This arguably explains why investors have seemingly ignored the good news.
No time to do stock research, but you still want to invest?
Stocks Down Under Concierge gives you timely BUY and SELL alerts on ASX-listed stocks!
GET A 3-MONTH FREE TRIAL TO CONCIERGE TODAY
No credit card needed and the trial expires automatically.
Blog Categories
Get Our Top 5 ASX Stocks for FY25
Recent Posts
How to do due diligence when investing in stocks? Here are the steps you should follow
Due diligence when investing in stocks is a crucial process. It is a step many investors can disregard, just buying…
Why do ASX companies undertake share consolidations? Here are the 3 key reasons
Some microcap ASX stocks (particularly companies below 1c) will undertake share consolidations. There are several reasons why they undertake this,…
Are CBA shares overvalued? Here’s 4 arguments why they are, 4 reasons why they aren’t and our judgement
Are CBA shares overvalued? This is a hotly contested question and arguably the closest thing we’ve had in Australia to…