Iress has downgraded its profit guidance for the 2022 financial year to between $166 million and $170 million, down from its previous forecast of $177 million to $183 million.
In a statement to the ASX released on Thursday, Iress explained that it is experiencing delays in the conversion of new sales opportunities and higher-than-expected supplier costs “against a backdrop of challenging macro conditions”.
The firm’s net profit after tax for FY22 is now expected to sit within the range of $54 million to $58 million compared to its previous guidance of between $63 million and $72 million.
Extended sales cycles on new client opportunities in APAC and mortgages were said to be the primary contributor to the reduced profit expectations, with revenue previously anticipated in 2022 now being pushed into 2023.
“Profit expectations for the second half of this year have been impacted primarily by delays in the timing of new client opportunities. In addition, some costs are higher than we previously expected, including US dollar priced technology and software,” said Iress CEO Andrew Walsh.
“While external macro conditions are volatile, we are making good progress in executing on our long-term strategies to build a more profitable and efficient Iress.”
Iress’ share price fell by more than 16 per cent following the downgrade.
Marcus Price will take over as MD and CEO of Iress from next week following the retirement of Mr Walsh, who will remain with the firm as a consultant until the end of January next year.
Mr Price was the inaugural CEO of PEXA and has held senior positions at NAB and the Boston Consulting Group as well as senior executive roles at Equifax and Dun & Bradstreet.
“Marcus is ideally placed to steer Iress on the next phase of its journey. He brings tremendous experience in financial services and technology businesses with a demonstrated track record in creating shareholder value,” Iress chair, Roger Sharp, said in July.
History of under-performance. Hopefully new management can fix this.