Iress (ASX:IRE) slashes earnings guidance for FY22 second half

2 min read | September 29, 2022 12:21 PM AEST | By Ritwika

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Iress (ASX:IRE) slashes earnings guidance for FY22 second half — Image source: © Nichapasrimai6064 | Megapixl.com

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Highlights:

Iress, on 29 September, has shared its updated earnings guidance for FY22 second half.

The company mentioned that its new profit guidance is in between AU$166 million and AU$170 million.

The updated range of NPAT guidance in H2 FY22 is AU$54 million to AU$58 million in the given period.

Backed by this update, Iress’ shares were seen trading 16.827% lower on ASX as of 10:30 AM AEST today.

Software and service firm Iress Limited (ASX:IRE), on Thursday (29 September 2022), has shared its updated earnings guidance for H2 FY22, stating a new profit range for FY22 to be between AU$166 million to AU$170 million on a constant currency basis. The company had initially announced profit guidance of AU$177 million to AU$180 million for H2 FY22 in August.

Meanwhile, shares of Iress were seen trading lower on ASX. The stock was at AU$8.745 per share, down 16.827% at 10:30 AM AEST.

Details about Iress’ updated earnings guidance for FY22:

Iress shared that, lately the company has been facing a lot of economic challenges and is therefore experiencing a delay in converting new sales opportunities. These sales opportunities were supposed to have a positive impact on the company’s earnings guidance, as anticipated by Iress.

Iress added that it had experienced higher supplier costs, mostly in technology and partly driven by FX rates on USD pricing, which the company did not anticipate earlier.

As a result, the company’s profit guidance came down to AU$166 million-AU$170 million from AU$177-AU$180 million, which was announced earlier in August (on a constant currency basis).

As per Iress’ update, the new range of Net Profit After Tax (NPAT) is expected to be in between AU$54 million and AU$58 million in H2 FY22. The updated outlook for segment profit had resulted in a dropping down of the NPAT of Iress for H2 FY22. Earlier, the company announced the NPAT range to be between AU$63 million and AU$72 million for the same period.

Iress added that the extended sales cycles on new client opportunities in APAC and Mortgages are the primary cause behind the slashed down H2 FY22 earnings guidance. As a result, the revenue that was expected to be delivered in FY22 has now been pushed to FY23.

Andrew Walsh, CEO, Iress Limited, said:

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