Business Description:
Iress Market Technology Limited (IRE) supplies share market and wealth management systems in Australia, New Zealand, Canada, Singapore and South Africa. Services include real-time data, analytics and news, with products falling into two divisions; Trading Systems and Information Systems. Its subsidiaries include IRESS Market Technology, IRESS Wealth Management, IRESS Data, PlanTech Holdings, Visiplan and Sentryi.

Strategy Analysis:
The IRE business model is focused on entering a market where it has a considerable competitive advantage, then building scale through acquisitions until it is the dominant player. An important part of this strategy has been the growth of the Wealth Management division through the acquisition of Visiplan and Spotlight, coupled with the rapidly growing Xplan business and the continued operations of Plantech. IRE makes small, complementary bolt-on acquisitions in the Wealth Management division, increasing the number of modules available to financial planners. IRE has entered a supply agreement for the provision of Xplan in South Africa, representing an attractive growth opportunity for the company. Expansion into Canada should also provide strong medium-term growth and the recent move into Asia is positive but is coming from a very a low base. There is plenty of cash on the balance sheet to fund value-accretive bolt-on acquisitions, but management remains focused on organic growth on the back of improving operating conditions in equity and investment markets. The diversification into the supply of wealth management practice systems is a winner, generating 23% of EBITDA in FY11. Iress Market Technology reported NPAT down 19.1% to $21.74m for the half-year ended 30 June 2011. Revenues from ordinary activities were $101.07m, up 12.64% from the same period last year. Consistent with prior periods, the significant non-core operational items impacting on the current period's results include: acquisition related depreciation and amortisation charges of $8.86m (2010: $4.94m); and realised foreign currency loss of $0.26m (2010: $0.05m gain). Diluted EPS was 17.087 cents compared to 21.319 cents last year. Net operating cash flow was $22.33m compared to $39.76m last year. The interim dividend declared was 14 cents compared with 14 cents last year.