Amid rising interest rates to counter inflation, investors have been keeping their powder dry which has prompted share market data company Iress (ASX: IRE) to issue a profit downgrade as a result of reduced trading activity across the investor community.
Defined by the company as “challenging macro conditions”, Iress has also cited supplier expenses that were higher than expected which were attributable to worsening foreign exchange rates due to pricing being in US dollars.
The subsequent impact of these challenges for Iress is a downgrade in their NPAT guidance for the year ending 31 December 2022 (FY22) to be in the range of $54m – $58m. This is down on the previous issued range of $63m – $72m.
“Profit expectations for the second half of this year have been impacted primarily by delays in the timing of new client opportunities,” said Iress CEO, Andrew Walsh.
“In addition, some costs are higher than we previously expected, including US dollar priced technology and software. 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.”
As a provider of share market software, the Iress portfolio of products includes trading software, financial advice, investment management, mortgages, superannuation and data intelligence. The software is utilised by more than 500,000 users globally.
All is not lost for Iress however, with the Company anticipating that reduced activity in their mortgages segment will be pushed from FY22 to FY23 when lending conditions improve.
IRE shares responded poorly to this profit downgrade to open trading at $8.50 per share, down 19% from their previous $10.52 close.
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