IRESS LIMITED — Earnings Release 2010

Feb 23, 2011

24 February 2011

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The Manager Company Announcements Office Australian Stock Exchange 10[th] Floor, 20 Bond Street SYDNEY NSW 2000

ELECTRONIC LODGEMENT

Dear Sir or Madam

2010 Full Year Results – Media Release

Please find attached a copy of the media release on the results for the full-year ended 31 December 2010.

Yours sincerely

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Stuart Bland Company Secretary

IRESS Market Technology Ltd A.B.N. 47 060 313 359

Corporate Office: Level 18, 385 Bourke Street Melbourne Vic Australia Tel: (03) 9018 5800 Fax (03) 9018 5844

Sydney Office:

Suite 4, 14 Martin Place Sydney NSW Australia Tel: (02) 8273 7000 Fax: (02) 8273 7003

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Media Release: 24 February 2011

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Adjusted Group profit $58.4 million (2009: $53.6m), up 8.9%

EBITDA up 4.2% on prior year

Solid performance in all divisions

Reported Group profit $50.5 million (2009: $42.8m) up 18% Final dividend of 24.0¢ partially franked plus 3.5¢ unfranked special dividend (2009: 21.0¢)

IRESS today announced its results for the financial year ended 31 December 2010. The Company provided the following breakdown of its results.**

Recurring Operational (a)

Operating Revenue 2010 2009 2008 EBITDA2010 2009 2008 Profit before tax (b) 2010 2009 2008 Profit after tax (b) 2010 2009 2008	Financial Markets Aust & NZ (A$m) Canada (C$m) Asia (A$m) 104.538 22.189 0.613 99.095 19.667 0.202 99.689 17.297 – 58.904 7.423 (0.586) 56.635 6.243 (0.176) 55.167 4.131 – 60.114 6.853 (0.780) 55.151 5.308 (0.268) 52.541 3.140 – 41.779 4.763 (0.542) 38.330 3.689 (0.186) 36.516 2.182 –	Wealth Management Aust & NZ (A$m) RSA (ZARm) Asia (A$m) 43.783 47.327 0.317 41.291 44.244 – 39.306 38.711 – 18.636 16.542 (1.121) 16.929 14.536 – 15.260 10.027 – 16.273 15.629 (1.131) 14.240 13.519 – 12.439 9.345 – 11.309 10.862 (0.786) 9.897 9.395 – 8.645 6.494 –	Underlying Group Ex Asia (b) (A$m) Underlying Group (b) (A$m) 178.880 179.810 169.275 169.477 163.848 163.848 87.851 86.144 82.816 82.640 76.491 76.491 85.959 84.048 77.433 77.165 69.843 69.843 59.741 58.413 53.817 53.631 48.540 48.540	Reported Group (A$m)
				50.479
				42.807
				35.623

** A more detailed breakdown of operating results is included as an attachment to this release and in the accompanying slide presentation.

(a) IRESS considers inter-period comparability of results is best presented as the underlying operating results of the relevant businesses calculated excluding share based payments, non-recurring items, and strategic amortisation charges and has presented results consistently in this way for the past 6 years.

(b) The Underlying Group profit before and after tax has been calculated before share based payment (“SBP”) expenses. Group SBP expenses recognised for the period was $6.899m (2009: $7.602m).

IRESS Directors declared a final dividend of 24.0 cents per share 66% franked at a 30% tax rate together with a 3.5 cents per share unfranked special dividend (2009: 21.0 cents per share fully franked) payable on 31 March 2011.

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Overall Group

IRESS Managing Director, Andrew Walsh said, “IRESS has produced a solid result for 2010, characterised as a period of heightened demand for our technology solutions amidst market conditions that are improved but remain challenging. Revenue growth did soften with the market in the second half when compared to the first, which with post-crisis cost base adjustments in 2010, has produced a solid but moderated financial result. Revenue and EBITDA growth for the year was 5.7% and 6.1% respectively, before allowing for our investment in medium-term growth in Asia.

The start of 2011 has seen a further increase in project and delivery activity across our divisions. Despite this, broader trading conditions have retained the flatter characteristics from the second half making the timing for broad uplifting conditions difficult to predict. Our priority at this time is on project delivery to our clients as they position themselves for growth and efficiency utilising our solutions, and we remain confident in the strategic and prospective value of projects underway.

In January, IRESS announced the acquisition of Peresys in South Africa. The acquisition, funded from existing cash reserves, is a significant expansion of activity in South Africa. It creates immediate scale in financial markets from which to grow through the unique combination of Peresys’ local strength and additional product opportunities.

Our growth outlook remains toward the medium term as we continue to look at a range of organic and acquisition opportunities within the parameters of our longstanding risk profile. Specifically for 2011, with contribution by Peresys, we anticipate similar levels of group EBITDA growth as for 2010, before our investment in Asia.

Dividend

In respect of second half earnings, a 24.0c dividend, franked at 66%, has been declared. The partial franking of the 2010 final dividend reflects reduced tax payments flowing from a period of non-recurring deductions realised on employee share grants.

As flagged in announcing the prior half results, to ameliorate for the particular impact on franking of these deductions, the board has also declared a special unfranked dividend of 3.5c. In declaring the special dividend, directors have sought to broadly supplement the financial impact of the less than 100% franked 2010 final dividend.

The long-standing IRESS dividend policy remains to target an annual payout ratio of 80% of underlying group earnings, excluding Asian losses during the establishment phase.

Taking into account the acquisition of Peresys, our current business mix and outlook, we expect that the sustainable level of franking going forward to be around 90%.

FINANCIAL MARKETS

Australia & New Zealand

The emerging revenue growth in the first half continued into the early second half as we experienced increased demand across the product range, though revenue growth rate wasn’t sustained throughout the remaining period. While momentum and a modest price increase carried through to the second half, trading conditions were subdued late in the half in line with market conditions.

The business achieved revenue growth of 5.5% over the year. Positive momentum from the first half combined with post crisis cost re-establishment in the second half produced EBITDA growth of 4.0% for the full year and 5.8% from the prior half.

Key points:

• IOS+ implementations remain the focus for institutional trading with a number underway and heightened demand.

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• Operator Trading Workstation (OTW) and Best Market Router (BMR) in production for automated smart routing to ASX Centrepoint.

• VolumeMatch – trading development now complete and released.

• Continued success with IRESS Portfolio System (IPS) providing leading portfolio management, modelling and reporting functions for full spectrum of client types.

• Low-latency trading eco-system launched based on co-located facilities connected by ultra lowlatency IRESS Optical Network (ION).

• IRESS Market Feed - low-latency normalised consolidated market data feed to be launched Q1 delivering full depth of book, quotes and trades.

Business Outlook:

Trading in the early months of 2011 has maintained a flatter profile even with unprecedented project activity with major clients to deliver our market leading solutions. Despite delays for commencement of alternative trading venues in Australia, clients are anticipating this microstructure change and drawing on IRESS’ multi-market product capability – from trading workstations, Order Management System (OMS), to low-latency consolidated market data and best market routing.

With the flatter momentum from the second half of 2010, the annualised impact of post-crisis cost re-establishment and anticipating current industry conditions to continue in the near term, we expect a similar level of EBITDA for the coming year. With our continued focus on product delivery and service, combined with the strategic and prospective value of projects underway, we are confident in the medium term.

Canada

Our Canadian financial markets operations produced a solid yet moderated result when compared to prior years, with revenue up 12.8% (CAD). There was a strong contrast between results in the first and second halves. Despite being buoyed by many client initiatives, the business experienced a challenging second half as a result of difficult conditions and client restructuring that translated to cost-cutting, consolidation, and heightened competition amongst vendors.

Reflecting the strong revenue momentum from 2009 and into 2010, EBITDA for 2010 increased by 18.9% (CAD), however with challenging conditions, EBITDA in the second half declined 0.5% against the prior half. Our focus remains fixed on the range of product initiatives being delivered and in meeting the additional opportunities being presented by our clients which are strategically important and have prospective value.

Key points:

• Further rollout of the institutional OMS project remains the highest priority in the first half of 2011. The rollout has now been broadened to include small and mid-sized trading firms.

• Significant enhancements to consolidated market data with liquidity fragmentation and other views in IRESS now in general release. Positive opportunities for market data desktop in retail segment now follow this.

• Deployment of IOS+/BMR alongside the Canadian back office provider Dataphile. This extends our retail reach into many other firms.

• Projects pursuing opportunities to extend reach into retail branch networks are progressing well with the first of a number of client opportunities nearing delivery and rollout stages.

• Early discussions are under way with potential webIRESS clients. We are confident these will initiate this strategically important market segment.

Business Outlook:

We remain positive on both near and medium-long term growth opportunities in Canada, however continue to be cautioned by the broader market conditions in North America and their impact on

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our business. Through the combined impact of additional revenue from new projects and the annualised effect of events in the second half of 2010, we will be targeting positive EBITDA growth for the twelve months to December 2011.

South Africa

The acquisition of Peresys was completed on 20 January 2011 and will form a material part of 2011 results. Our focus since completion has been on additional products from the IRESS suite to meet immediate client and product opportunities in South Africa. Specifically, our first priorities are delivery and integration of webIRESS, IPS, and the IRESS desktop.

Further detail on the acquisition, Peresys and the South African market will be provided in accompanying results presentation material.

Asia

Investment in the expansion of our Asian financial markets business has continued to progress well by our own measure, and is being received positively locally. Following development of core product capability, our initial milestone was to secure a seed broking client in the region, which has been achieved with a major Singaporean bank. Further, we are already in the delivery stage of many phases.

Key points:

• Market data progressing well with local users, expansion of coverage will add to fixed cost base over time.

• Product localisation now complete for initial requirements.

• Large seed client project progressing with potential to expand services in future phases.

• Expansion at other Singapore based clients with emerging revenue in second half. Leads in broader region also showing promise.

• Primary Singapore data centre now production grade with second data centre underway.

• Seed webIRESS client launching in London late in first half. Potential to explore further opportunities in the region.

Business Outlook:

Our cost base for the Asian financial markets initiative continues to gradually build in careful anticipation of sales, delivery and operational requirements. At this stage our self-constrained net loss remains limited to $2.0m pa, which will be reviewed and balanced against confidence in prospective opportunities. Growth opportunities in the region may also include acquisitions where these make sense.

WEALTH MANAGEMENT

Australia & New Zealand

Wealth Management in Australia and New Zealand has performed well through a period of significant change for the industry and our clients. The increased demand for our technology solutions has been driven by clients repositioning themselves for growth, and for a future that demands efficiency and scale, segmented services to clients and additional compliance. Our integrated advice platform is increasingly used as an enabler by dealer groups to assist with business redefinition, content and service delivery to their distributed adviser networks.

In financial terms, this activity with a modest price increase during the second half, has translated to an increase in net revenues for the full year of 6.0% with second half against prior up 5.5%. EBITDA for the division was up 10.1% for the year, and second half against prior was up 6.5%. The higher percentage growth in EBITDA was mainly as a result of savings in non-wage costs during 2010.

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Key points:

• IRESS appointed as Count Financial’s strategic software provider. Pilot complete and rollout commencing this quarter.

• Remaining VisiPlan clients actively engaged on upgrade to XPLAN.

• Ongoing demand for integrated technology solutions as basis for efficient advice delivery.

• XPLAN provides flexibility and configurability across range of functionality sought by groups requiring multiple concurrent advice offerings.

• Increased demand and attention to web/mobile/tablet interactions for distributed advice networks and client interaction.

• XPLAN 2.0 to be launched early Q2 delivering leading design and user-experience redevelopment.

• Industry surveys continue to rate XPLAN as the most widely used financial planning software tool, offering the most functionality and the greatest breadth.

Business Outlook:

With current trading conditions, that have started the 2011 year flatter than previous period, together with the annualised impact of post-crisis cost base reestablishment in 2010, and known revenue opportunities, EBITDA in 2011 is expected to grow modestly but below 2010 levels. Despite heightened project activity, we remain mindful of the significant level of industry change.

South Africa

South Africa has performed solidly over the year with focus on XPLAN rollouts and responding to client requirements and opportunities. Revenue growth over the year has been 6.9% (ZAR) and EBITDA has increased by 13.8% (ZAR).

Key points:

• Ongoing active engagement with clients regarding XPLAN opportunities, particularly where XLITE able to unlock offline client segments.

• A number of key clients looking at migration to XPLAN.

• Existing implementations include two of the largest banking networks, where broader use of XPLAN modules also sought.

• IRESSnet, platform and fund manager data feeds are seen as a key differentiator in delivering practice efficiencies.

• Project for automated compliance framework to systematise advice approval and audit is nearing finalisation. Meaningful for large distribution groups.

Business Outlook:

We remain positive about the medium term growth of wealth management in South Africa which is reconfirmed by the recent decision by Sanlam (second largest life insurer in South Africa) to migrate from Spotlight to XPLAN from 2012. In the short-term, revenue from additional opportunities will be insufficient to offset known client roll-offs which while small in a group sense, are material for this division. While difficult to predict, local currency revenues for the division in 2011 are currently anticipated to revert to around 2009 levels ahead of new rollouts.

Asia

In a similar manner to financial markets presence in Asia, wealth management has continued to progress well by our own measure as we focus on technology consolidation and localisation based on prospective opportunities. Following prioritised localisation of XPLAN, our goal has been to secure a seed XPLAN client in the region in addition to establishing migration paths to XPLAN for existing clients. We are now at this stage with several projects underway in Singapore and Hong Kong and Taiwan.

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Key points:

• Product localisation sufficient for immediate seed client opportunities, with seed XPLAN client in Hong Kong now in pilot phase.

• Additional XPLAN and XLITE projects expected regionally in 2011, both migratory and new.

• • Open architecture and willingness to integrate to any fund platform are key differentiators.

• Development of XPLAN-integrated offline portfolio design and sales tool for Asian requirements now complete for first phase client requirements.

Business Outlook:

Our cost base for wealth management tracks at its annualised limit of a $1.0m pa net loss. We will continue to carefully balance this against confidence in prospective opportunities and delivery requirements.

Group

As flagged with the Peresys announcement, realising the opportunities available from our increasingly diverse and significant international operations has prompted a necessary but modest increase in costs to support our expanded sphere of operations. These costs are anticipated to represent an increase to the group’s cost base of around $1.0m pa, and while not specific to any one division, they will be allocated out to the company’s divisions on an appropriate basis consistent with existing practice. These costs are already factored into the business outlook commentary provided in this announcement.

For further information please contact:

Andrew Walsh Stu Bland Managing Director Chief Financial Officer (03) 9018 5800 (03) 9018 5800

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Detailed Results Analysis:	Financial Markets A&NZ (A$m) Financial Markets Canada (C$m) (c) Financial Markets Asia (A$m) Financial Markets Total (A$m) Wealth Management A&NZ (A$m) Wealth Management RSA (ZAR m)(c) Wealth Management Asia (A$m) Wealth Management Total (A$m) Underlying Group (A$m) Strategic / Non – Operating Charges (A$m)	Financial Markets A&NZ (A$m) Financial Markets Canada (C$m) (c) Financial Markets Asia (A$m) Financial Markets Total (A$m) Wealth Management A&NZ (A$m) Wealth Management RSA (ZAR m)(c) Wealth Management Asia (A$m) Wealth Management Total (A$m) Underlying Group (A$m) Strategic / Non – Operating Charges (A$m)	Total (A$m)
Recurring Operational (a) Operating Rev 2010 2009 2008 EBITDA 2010 2009 2008 Profit before tax (b) 2010 2009 2008 Profit after Tax (b) 2010 2009 2008	104.538 22.189 0.613 128.639 43.783 47.327 0.317 51.171 99.095 19.667 0.202 121.400 41.291 44.244 – 48.077 99.689 17.297 – 118.895 39.306 38.711 – 44.953 58.904 7.423 (0.586) 66.161 18.636 16.542 (1.121) 19.983 56.635 6.243 (0.176) 63.479 16.929 14.536 – 19.161 55.167 4.131 – 59.753 15.260 10.027 – 16.738 60.114 6.853 (0.780) 66.574 16.273 15.629 (1.131) 17.474 55.151 5.308 (0.268) 60.849 14.240 13.519 – 16.316 52.541 3.140 – 56.026 12.439 9.345 – 13.817 41.779 4.763 (0.542) 46.269 11.309 10.862 (0.786) 12.144 38.330 3.689 (0.186) 42.291 9.897 9.395 – 11.340 36.516 2.182 – 38.938 8.645 6.494 – 9.6002	179.810 – 169.477 – 163.848 – 86.144 – 82.640 – 76.491 – 84.048 (9.560) 77.165 (13.916) 69.843 (14.802) 58.413 (6.644) 53.631 (9.672) 48.540 (10.287)	179.810 169.477 163.848 86.144 82.640 76.491 74.488 63.249 55.041 51.769 43.959 38.253
		58.413
		53.631
		48.540
SBP & Non-Recurring: Share Based Pmts. 2010 2009 2008 Total Non-Rec Exp. Before Tax 2010 2009 2008	– – – – – – – – – – – – – – – – – – – – – – – – (0.181) 0.070 0.085 (0.024) 0.268 0.198 (0.035) 0.261 0.018 (0.090) 0.012 (0.071) (0.001) 0.124 – 0.285 0.073 (0.057) – 0.009 (0.092) 0.137 – (0.063)	(6.899) – (7.602) – (5.952) – 0.237 – 0.214 – (0.054) –	(6.899) (7.602) (5.952) 0.237 0.214 (0.054)
Tax on SBP & Non Recurring items 2010 2009 2008			5.372 6.237 3.376
Reported: Profit after tax 2010 2009
			50.479
			42.807
2008			35.623

(a) More commentary on operating results, share based payment (“SBP”) expenses, non-recurring items and strategic charges are included in the accompanying slide presentation.

(b) The Recurring Operational totals have been calculated before SBP expenses as inter-period comparability is affected by changes in the vesting period of share grants.

(c) Please note figures in this column are reported in the underlying natural currency for this business segment.

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