Recent Results of four IT stocks – WiseTech, Iress, Integrated Research and Bravura

  • Feb 20, 2020 AEDT
  • Team Kalkine
Recent Results of four IT stocks – WiseTech, Iress, Integrated Research and Bravura

Shares belonging to the technology sector are the most sought-after ones by the investors. With a strong future outlook in 2020 and beyond, investors have been preferring technology stocks to enrich their portfolio. Technology stocks could act as a shield to an investor’s portfolio and remain to be a hot topic when it comes to delivering robust results.

At present, we are in the period where most of the companies are providing investors with the earnings results.

In this article, we would provide you with the recent results of the four technology stocks. These stocks remain popular amongst most of the investors. Let’s see how they have performed through their results.

WiseTech Global Limited (ASX: WTC)

WiseTech Global Limited (ASX: WTC) is the provider of software solutions to the logistics industry and amongst the member of esteemed WAAAX stocks.

On 19 February 2020, WiseTech Global delivered strong growth, with a 31% growth in revenue and 29% growth in EBITDA in 1H FY2020 ended 31 December 2019. However, the shares dropped significantly by 27.31% by the end of the trading session on 19 February 2020 on the back of the commentary from Founder and CEO, Richard White who said that because of the unexpected outbreak of coronavirus and the effective shutdown of China, WiseTech has downgraded its guidance. Also, China is a key driver of the global manufacturing supply chain and the outbreak of coronavirus and effective shutdown of China would result in delay of execution of logistics activities by logistics service providers.

As per the market release on 19 November 2020, the company’s Chairman mentioned that WTC was expecting to deliver FY2020 revenue to range from $440 million to $460 million. However, in another market release on 19 February 2020 the company clarified that in FY2020 it expects its revenue to range from $420 million - $450 million. Similarly, FY2020 EBITDA guidance which was supposed to lie in between $145 million to $153 million is now downgraded to $114 million to $132 million.

Apart from this, if we see the performance of the company in 1H FY2020, then it could be noted that the total revenue increased by more than 31% to $205.9 million.

  • Gross profit increased by more than 31% to $169.4 million.
  • Operating profit improved above 17% to $42 million.
  • NPAT went up by more than 160% to $59.9 million.
  • Interim dividend soared above 13% to 1.7 cents/share.

 

The key performance indicator includes:

  • Recurring revenue 99% for CargoWise platform
  • Less than 1% annual attrition rate for CargoWise clients
  • Strong organic CargoWise revenue growth of more than 24%
  • EBITDA margin was 30%
  • EBITDA margin excluding acquisitions was 49%
  • 15,000 logistics organisations.

Iress Limited (ASX: IRE)

A tech entity, offering software to the financial services space, Iress Limited (ASX: IRE) released its full-year result for the 12 months ended 31 December 2019 and delivered growth of more than 10% in the Group revenue to $508.9 million and more than 8% on a constant currency basis as compared to the previous corresponding period.

  • Group Segment Profit increased above 10% on 2018 to $152.1 million.
  • Statutory NPAT was up by only +2% because of the new lease accounting standard AASB16 and the acquisition of QuantHouse.
  • A final dividend of 30 cents declared (40% franked).
  • Iress has a strong underlying fundamental with a cash conversion of 87%, recurring revenue of approx.90%, net debt balance of $194.9 million demonstrating a conservative leverage ratio of 1.3x Segment Profit.

Business Highlights:

  • IRE has successfully delivered key projects to the customers in the regions- UK, Australia & South Africa throughout private wealth, financial advice & trading.
  • Reported solid growth in wealth management in Australia.
  • Continuous demand for integrated wealth and trading software was from the UK.
  • Strong momentum was seen in the mortgage business in the UK. At present, three clients have gone live with four deployments under progress.
  • Acquisition of QuantHouse has been helping in accelerating IRE’s data strategy.

FY2020 Financial Outlook:

  • Segment revenue growth is expected to range from $156 million to $164 million on a constant currency basis.
  • Execution of medium-term growth opportunities especially in super, trading, data, & additional scalability to bring 2020 investment ahead of revenue.
  • Non-operating costs in 2020 would be in the order of $3 million to $6 million.

Integrated Research Limited (ASX: IRI)

Integrated Research Limited (ASX: IRI), the leading global provider of performance management software for key IT infrastructure, payments & unified communications released its 1H FY2020 results for the period ended 31 December 2019 on 20 February 2020.

IRI reported a growth of 6% in its revenue to $53.180 million. Net profit after tax increased by 1% to $11.824 million as compared to the previous corresponding period. Overall, the license sales rose by 7% to $33.4 million.

Also, the directors of the company declared a fully franked dividend of 3.5 cents per share and would be payable to the shareholders 21 April 2020 who are registered at the end of trading on 28 February 2020.

Let’s take a look at the product and service revenue:

  • Unified Communications revenue increased by 10% to $29.7 million
  • Payments revenue declined 14% to $7.8 million
  • Infrastructure revenue soared 1% to $11.2 million
  • Professional Services revenue rose 39% to $4.5 million.

 

Outlook:

In FY2020, the company expects profit growth in underlying operational performance. However, it assumes that the financial performance to get influenced by variations in currency exchange rates.

Bravura Solutions Limited (ASX: BVS)

Bravura Solutions Limited (ASX: BVS), the provider of software products and services to clients operating in the wealth management and funds administration industries released its 1H FY2020 results for the period ended 31 December 2019 on 20 February 2020.

 1H FY2019 Result:

  • Group revenue increased by 6% to $135.1 million as compared to 1H FY2019. If the acquisition is excluded, the Group revenue has grown by 3%.
  • EBITDA went up by 7% to $25.5 million and excluding acquisitions, the EBITDA growth increased by 8%.
  • Group NPAT increased 21% to $19.8 million. However, if the acquisitions are excluded, then NPAT has grown by 17%.
  • EPS increased by 7% to 8.1 cents per share.
  • Bravura declared an unfranked interim dividend of 5.5 cents per share.
  • BVS has a strong financial position with net cash and cash equivalent of $100.3 million by 31 December 2019.

The continued investment made by the company has placed Bravura Solutions as a technology leader in the key markets. The wealth management sales pipeline remains solid with significant opportunities throughout all key markets. Funds Administration provided growth, with a pipeline of substantial prospects & improved operational competences anticipated to help grow over time.

Further, clients are laying greater stress on procuring an ecosystem of solutions. This switch has benefitted BVS’s improved focus on greater product modularisation & a market proposition that includes a wider product portfolio throughout all the offerings of the company including the latest strategic acquisitions.

Guidance:

  • FY2020 NPAT growth apart from the impact of the acquisition is anticipated to be in the mid-teens.
  • Acquisitions are expected to provide an additional contribution of ~ $3 million of FY2020 NPAT.

Below is the stock performance of the IT stocks under discussion, with their respective market capitalisation at the end of the trading session (as on 20 February 2020).


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