The Iress board has stated that it is considering selling its Mortgage Sales & Origination (MSO) business.

In a market updated released today, the financial software firm said that the potential divestment is one of the initiatives identified via a business review launched in February upon the appointment of Roger Sharp as non-executive director and chair elect.

It points out that valuations for UK software businesses are at “record highs” and that the market is looking for platforms with “strong client relationships and recurring revenue.”

Recurring revenue made up 46% of MSO’s total revenue of AUD$26.9m in 2020 and 31% of 2019’s figure.

“Since acquiring MSO in 2013,” the market update reads, “Iress has transformed the business such that it is now the leading mortgage origination software in the UK.

“The product and technology has been rearchitected, the business has been transitioned to a recurring subscription model and significant client implementations and revenue momentum have been delivered.”

Iress adds that it believes a different owner could achieve higher returns than under its current owner.

The market update says that the appointment of a financial adviser “is imminent” and that surplus capital will be distributed to shareholders if a sale does occur.