Iress Ltd (ASX: IRE) shares are having a volatile session on Monday following the release of its half year results.
In early trade, the ASX 200 tech stock was up 6% to a 52-week high of $11.12.
However, its shares have now given back those gains and more and sit 1.5% lower at $10.34.
For the six months ended 30 June, the ASX 200 tech stock posted a modest 1% decline in revenue to $309 million.
This reflects the sale of businesses, with pro forma revenue increasing 4% to $302.4 million. Management notes that this pro forma increase was driven by the implementation of a refreshed pricing framework and investment into bolstering sales and account management capabilities within the business units.
Key drivers of its pro forma revenue growth were its APAC Wealth and UK businesses, which reported a 3% and 11% increase, respectively.
Iress reported a 10% reduction in its operating expenses for the half. This was driven by a disciplined approach to cost management in high inflation environment and the sale of businesses. On a pro forma basis, the company recorded a 4% reduction.
Thanks to operating leverage, the ASX 200 tech stock's adjusted EBITDA increased 52% over the prior corresponding period to $67 million. Things were even better for its NPATA, which increased from $4.5 million to $17.2 million.
Iress shares are falling today even though management upgraded its guidance for FY 2024.
It now expects its adjusted EBITDA to be $126 million to $132 million this year. This is the equivalent of $135 million to $141 million before asset sales and represents a 9% uplift from its last guidance.
But that's not where the good news ends. Management also advised that it will be bringing back its dividend with its full year results in February.
The ASX 200 tech stock's CEO, Marcus Price, commented:
Through the sale of non-strategic assets, including our UK Mortgages early in the second half, we have considerably strengthened our balance sheet which now sits within our target range at 1.2x leverage. Pleasingly, we now plan to reinstate a final dividend for FY24.
But as positive as its performance and guidance is, judging by the way the Iress share price is falling today, it seems that some investors were expecting even more from the company.
The post This ASX 200 tech stock just reported a 280% profit increase appeared first on The Motley Fool Australia.
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