It was originally intended that the net proceeds from the sale of mortgages would be distributed to shareholders
Iress has announced that it will not proceed with the divestment of its UK mortgage business. This latest announcement contrasts plans previously outlined in the company’s 2021 annual report to consider a sale of the mortgages business.
It was originally intended that the net proceeds from the sale of mortgages would be distributed to shareholders.
In a release today, Iress chief executive Andrew Walsh said: As part of a board-led strategy review in 2021, it was decided that Iress would explore potential opportunities to divest its mortgages business. This decision reflected the potential to achieve higher returns under new ownership and to redeploy the anticipated sale proceeds to enhance returns to Iress shareholders.
However, 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, he said.
The mortgage business brought in A$29.5 million (US$21.93 million) of revenue in 2021 and according to Walsh has increased its pipeline of opportunities as lenders demand greater scale, efficiency, and automation in processing.
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, he said.
With the divestment process ceasing, Iress has now used estimates including mortgages as the benchmark for performance.
Iress reaffirmed that segment profit is expected to grow 7-10%. Underlying net profit after tax (NPAT) is expected to grow 25-37% and 2022 underlying earnings per share in the range of 40cps to 44cps on a constant currency basis.