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FY19 Result – Why Integrated Research (ASX:IRI) Shares Climbed 7%

The Integrated Research Limited (ASX: IRI) share price rose 7.7% in reaction to the released FY19 result.

Integrated Research describes itself as the leading global provider of proactive performance management software for critical infrastructure, payments and communication ecosystems. The company has been operating since 1988 and now has over 250 employees across five countries with 1,000 organisations as clients in more than 60 countries – some of them being Fortune 500 businesses.

Integrated Research’s Pleasing FY19 Report

Integrated Research reported that its total revenue increased by 11% to $101 million. Revenue from licence fees rose 19% to $62.8 million, maintenance fees fell 3% to $25 million and revenue from software as a service (SaaS) increased 472% to $669,000. Over 95% of the revenue was derived outside of Australia.

Some of the more significant sales during the year came from Airbus, Barclaycard, Target, Walgreens, Mastercard, Visa and Westpac Banking Corp (ASX: WBC).

I thought that Integrated Research’s expenses were all going in the right direction. Research & development expenses rose 17% to $17.89 million, sales & market expenses increased 9% to $49.79 million. A growing business should be spending more on these categories. R&D should turn into future revenue.

But general and admin expenses fell by 5% to $5.56 million, showing operational leverage.

Integrated Research’s EBIT (click here to learn what EBIT means) rose by 12% to $28.9 million and net profit after tax (NPAT) increased by 14% to $21.85 million. Market consensus was that net profit would be $21.5 million, so the company slightly beat expectations.

Integrated Research Dividend

The Board declared total year dividends of 7.25 cents per share, an increase of 11.5% compared to last year.

The company finished the year with cash of of $9.3 million.

Is The Integrated Research Share Price A Buy?

The company continues to grow profit at a solid pace and it has been compounding for many years.

A high level of recurring revenue and a high retention rate is attractive, as is the growing dividend. It could be one to watch as a lower priced growth option at 22 times earnings. But, the growth shares in the free report below could be even better.

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