Iress Announces Appointment of New CEO - FVE Unchanged

We expect Iress to maintain its dominant position in the Australian financial markets and wealth management software sectors due to its narrow economic moat, which is underpinned by customer switching costs and network effects. However, we forecast the mature Australian financial markets division to contract in real terms, in line with the industry, with a revenue CAGR of around 1% over the next decade as active fund managers are displaced by automated investment solutions. In contrast, we expect Australian wealth management revenue to grow at a CAGR of 7%. We expect margin expansion within the wealth management division to more than offset margin contraction within the financial markets division, enabling the group EBIT margin to expand to 25% by 2031 and EPS to grow at a double-digit CAGR over the next decade.