It will continue to invest in it following a strong 2021 performance
Tech company Iress Limited announced today that it has decided not to proceed with the divestment of its UK mortgage business amid increasing global market volatility and declining technology company valuations.
“After a thorough and well considered process, we have concluded that the best outcome for our shareholders, clients and people is for Iress to retain the business,” Andrew Walsh, chief executive at Iress, said.
“During the sale process, global market volatility increased and technology company valuations declined. It became evident that purchasers’ valuations were likely to be below levels that represent a reasonable return to Iress’ shareholders. As a result, the board has decided to cease the divestment process and retain the business,” Walsh explained.
He also cited the recent solid performance of the Mortgage business.
“The mortgages business continues to perform strongly, contributing £16.1 million of revenue and £6.4 million of NPAT in 2021. In recent months, Mortgages have increased its pipeline of opportunities as lenders demand greater scale, efficiency, and automation in mortgage processing,” Walsh added.
In 2021, the company decided to explore potential opportunities to divest its Mortgages business based on the potential to achieve higher returns under new ownership. Now, it is making a commitment to continue investing in its Mortgages business.
“By making this decision and communicating it now, we aim to bring clarity and certainty to our clients, people, and shareholders. We are moving forward with creating the right environment for Mortgages to succeed and achieve its potential, while at the same time complementing Iress’ delivery of its 2025 growth ambitions,” Walsh said.
Iress has issued guidance for 2022, including and excluding the contribution from Mortgages for the year. With the divestment process ceasing, it will now use the estimates, including Mortgages, as the benchmark for performance.
Iress reaffirmed that segment profit is expected to grow by 7-10%, while underlying NPAT is expected to increase by 25-37%.
The targets for the group, excluding Mortgages, remain unchanged. Including Mortgages, the NPAT base targets for 2025 have been upgraded from $120 million to $135 million
In addition, Iress stated its intention to complete the $100 million share buy program that is currently underway.
