The following article by Adrian Ezquerro featured in The Australian, 19 October 2011.

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IRESS Market Technology Limited (ASX:IRE) is a principal supplier of sharemarket and wealth management systems in Australia, Asia, New Zealand, Canada and South Africa.

COMPANY: IRESS Market Technology Limited

ASX CODE: IRE

INDUSTRY: Software and Services

DIVIDEND PER SHARE: 41.5c (69 per cent franked)

IRE was established in 1993 and today has a global workforce in excess of 600 across 14 offices.

IRE recently reported subdued financial results for the first half of 2011 primarily reflecting a tumultuous period in equity markets. Given the market-leading position of IRE in its key markets and overall business quality, the recent pullback in its share price may well present an opportunity for longer-term investors.

IRE managing director Andrew Walsh said: “Flatter revenue, combined with the impact of headcount growth to support future growth opportunities, produced a stable albeit moderated financial result.”

The fundamentals of IRE appear to be very sound. The balance sheet is strong, with cash of $45m and no debt. IRE is a highly profitable business and is again forecast to achieve normalised return on equity in excess of 50 per cent in 2011. Operating cash flow has also been excellent in recent years.

IRE recently declared an interim dividend of 14c per share, franked at 90 per cent. Management reiterated their dividend payout ratio of 80 per cent of earnings, with franking likely to be in the vicinity of 90 per cent in the future. This would suggest IRE could be of interest to more income- focused investors. The MyClime valuation for IRE is $8 and a purchase at the market price would present an investor with a solid yield approaching 6 per cent.

Source: The Australian, 19 October 2011