TechnologyOne announces 2009 full year results
Technology One Limited (TechnologyOne) has announced its results for the year ending 30 September 2009, with revenue up 11% and licence fees up 8%
Executive Chairman, Mr Adrian Di Marco said "In a time of significant economic uncertainty and global financial crisis, when our competitors have reported dramatically reduced revenues and licence fees, TechnologyOne has posted our sixth consecutive year of record revenues and licence fees, with revenue up 11% and licence fees up 8%."
"We are continuing to win major deals against our multinational competitors, including new contracts with the New Zealand Stock Exchange, Beyond Blue, Lifeline Australia, City of Melbourne, Arab Bank, Sunsuper, Bank Negara (Malaysia), the University of Tasmania, Seqwater, the Children's Medical Research Institute, Scarborough Borough Council (UK) and the University of Hertfordshire (UK)."
In line with previous guidance provided to the market, the company's Profit After Tax was down 9% on the prior year.
Mr Di Marco said that the company's Profit After Tax result was because of delayed contract wins, continued strong investment in Research & Development (R&D) initiatives, and a significant increase in its cost base from the strong growth the company experienced in the previous year.
"In the prior year revenue increased 41% and expenses increased by 47%, as we continued our substantial R&D program," said Mr Di Marco.
"This year we successfully implemented a number of cost control initiatives and at the half year our expenses had only increased by 26%."
"At the full year we have successfully contained our expenses so that they were up 17% on the prior year. More importantly, we have been able to do this without impacting our R&D program or reducing our staff numbers."
Mr Di Marco said that the company continued to invest significant funds in its R&D, with expenditure at $25m, an increase of 18% on the prior year and representing 20% of revenue this year.
"In such a challenging economic period some would argue that we should have made substantial cuts to our R&D programs. Without a doubt R&D has underpinned our long term success in the market, and to this end TechnologyOne has taken a long term strategic view that has seen all our R&D projects continue, with no staff reductions."
"This is in contrast to our competitors who have significantly reduced staff numbers, losing valuable IP and expertise, which is ultimately going to impact their ability to continue current R&D programs and develop new ones. I believe that this will significantly hamper their long term success."
Mr Di Marco was clear that TechnologyOne's increased licence fees and revenue were due to the company's decision not to cut back its R&D program.
"This year we have introduced a new generation Student Management solution using the Connected Intelligence platform, preconfigured solutions for Local and Federal Government organisations, a Carbon Accounting solution, Grants Management, Fundraising, and Contact & Stakeholder Management solutions for the Not-for-Profit sector, and a new Mobility platform," he said.
"We're also expecting to deliver our recently acquired Performance Planning and Enterprise Content Management products on our Ci platform in early 2010.
This is in addition to delivering our ‘Loosely Coupled Architecture', which will allow our customers to upgrade the TechnologyOne enterprise suite as individual, discrete products over varying timeframes to substantially simplify the upgrade process."
Mr Di Marco said that the forthcoming year will see TechnologyOne focus on delivering pre-configured, best practice enterprise solutions.
TechnologyOne has established a Solutions Group to work with its customers and internal teams to develop pre-configured, ‘best practice' products, and its sales and marketing team has also been restructured around these solutions.
"Since we launched our first pre-configured solution in September 2008, OneFMA, for Federal Government agencies, which we designed in response to feedback from customers needing to streamline their financial reporting, we have seen more than $3m worth of new business" said Mr Di Marco.
"Our preconfigured solutions are focused on the markets in which we are already dominant."
"These solutions will dramatically reduce the time and risk typically associated with a large enterprise wide implementation by allowing a customer to take a ‘pre-configured solution' from TechnologyOne as the starting point, and then tailor it to their specific needs."