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IRIS Group explains its results

Following yesterday's story on its results, the IRIS Group has issued the following statement…

IRIS demonstrates its financial strength, positioning itself as a software supplier of choice to weather the economic downturn

With average annual growth of 76% over the past 3 years, IRIS Software – – was recently identified as one of Britain’s top performing private companies, rising to 16th position in the February 2009 Sunday Times Deloitte Buyout Track 100 League Table, with annualised profits of £40.8m

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Reporting on both these results and the Group’s 2008 results, Martin Leuw, Group Chief Executive of IRIS commented: “As a private company, we have not historically announced our results beyond filing them at Companies House. However, in the current uncertain economic environment, we feel that it is beneficial for our employees, customers, prospects, suppliers and partners to fully understand  and have confidence in the strong financial position of IRIS and the significant long term covenant free cash facilities we have in place to continue to fund not only the future development of our products, but also to make complementary strategic acquisitions.

“Our first set of statutory accounts for the 10 month period to 30 April 2008, reflects the  £500m buyout and merger of IRIS Software  with Computer Software Group plc which we completed on 3rd July 2007 and was backed by Hellman & Friedman, now a majority shareholder,  one of the world’s largest and most successful private investment firms with over $8 billion currently under management.

“The accounts show that for the ten month period to 30 April 2008, when you add back the amortisation of goodwill on acquisitions and one-off restructuring costs at the time of the buyout, IRIS made an Operating Profit of £32.6m, had free cash flow in excess of 100% EBITDA to comfortably service its interest payments and had cash in the bank of £20.7m. The buyout package was funded by approximately £320m of long term bank debt, repayable no earlier than 2015 and loan capital of £200m from Hellman and Friedman and other shareholders, repayable no earlier than 2017. In addition IRIS had an acquisition facility of £75m, largely undrawn, repayable no earlier than 2015, which gives us the opportunity to continue to make acquisitions. Unlike many businesses both public and private, IRIS has no financial covenants on its debt package. With approximately 60,000 customers providing a wide spread of business, an average 95% renewal rate which is one of the highest in the industry and around 65% of annual revenues underpinned by maintenance contracts”.

Now the largest privately owned software and services business in the UK, IRIS’ unique differentiator lies in the fact that it is a sector specialist with leadership positions in the markets it operates in. IRIS is:
The No 1 provider to UK accountancy practices;
The No 1 provider to UK law firms, barristers and coroners’ offices;
The No 1 provider to the UK not-for-profit sector;
The No 1 provider of payroll and accounts software to GP practices
The No 2 provider of payroll and HR software solutions, providing payslips to circa 10% of the UK workforce;
An award-winning provider of accounting and ERP systems to UK businesses;
A leading provider of specialist software for:
•    sports clubs
•    field service companies
•    IT divisions of major organisations
•    higher education and commercial training
•    architects
•    engineers


6 replies on “IRIS Group explains its results”

The £75m acquisition fund was presumably set up for Vin who was clearly very adept in this area – may explain why it remains undrawn. Presumably the fund was established to raise revenue and develop the brand – maybe it should have been more actively used!!

erh I think that just makes it worse doesn't it? Don't worry we've got masses of debt that we have to pay back in about 5 years time and we can just about manage the interest right now.
Ok I don't have a great interest in the ins and outs of which supplier is better than another but this looks like a 'shutting the door when the horse has bolted' type of statement. Sadly it smacks somewhat of the financial sector last summer as has been said elsewhere on this blog – don't worry we're all fine.
As a taxpayer what really makes me annoyed about all of this is that the funders of this enterprise have made this type of loan/s that got us all into this financial mess the world is in.
Would this company be able to raise this kind of money in today's market – absolutely not so you make up your mind if it's a good idea/proposition.
The statement talks about goodwill write off's, restructuring costs etc etc. However, in simple laymans terms it lost money to the tune of £29m and has a debt of £520m.
For all those bankers out there, who like financial statements like the one from IRIS, the crucial bit is where the auditors put 'loss for the period £29m' and yes folks funny enough that means 'minus'.

With average annual growth of 76% over the past 3 years, IRIS Software – – was recently identified as one of Britain’s top performing private companies.
If you have a moment take a look at the type of statements RBS were making in the spring of 2008 – anything possibly strike you as familiar? All those No1's etc?

They just get worse don't they. Does anyone know that they have now got rid of Phil Barron, 'Head of Legal Services'??? He was just as inept as their decision to employ a 'non-legal' background Head of Department!!! Another hole, another day in the life of IRIS!

I think he was technically head of professional services within the group and, as such, nothing to do with the legal software side of the business.

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