TechnologyOne announces half year Profit up 17 per cent

27 May 2014 - TechnologyOne (ASX:TNE) today announced its results for the half year ending 31 March 2014, reporting strong profit growth and putting the company on track to deliver 10 to 15 per cent growth for the full year.

The half year results see a 17 per cent growth in Net Profit Before Tax and in keeping with very high customer retention and satisfaction rates, Annual Licence Fees once again grew strongly by 13 per cent.

The company signed a significant number of new customers in the first half of the year, including OneCare Limited and Auckland University of Technology. TechnologyOne also continued to increase its footprint in the UK, adding new customers Edinburgh Leisure, The East Riding of Yorkshire Council and Pepper Finance Ireland.

Initial Licence fees also grew by 24 per cent in the half year, as a strong indicator of the resilient nature of the enterprise software market, and the continuing success of TechnologyOne’s Connected Intelligence (Ci) product range. 

Executive Chairman Adrian Di Marco said the next generation of the company’s Ci product range, Ci Anywhere provided a platform for continued strong growth in licence fees in future years. “Ci Anywhere’s support of smart mobile devices offers unprecedented flexibility to mobilise our customers’ workforces, and its beautiful design and ease of use truly raises the bar for enterprise software,” he said.

Mr Di Marco said the TechnologyOne Cloud, which delivers the TechnologyOne Ci Enterprise Suite as a service to customers, would also become a major new platform for growth. “The TechnologyOne Cloud enables our customers to prepare for a cloud first, mobile first world,” he said.

“Cloud computing has become the next gold rush in the IT industry, with many IT companies attempting to cash in on the cloud bandwagon. Of particular concern are the cloud hosting providers,” said Mr Di Marco. “Cloud hosting should be seen as the last resort, because it is limited in what it can realistically offer. Cloud hosting providers adopt a ‘lift and shift’ approach, simply installing software in the cloud. 

“On the other hand, software as a service sees the company that builds the software, also run the software as a service for its customers. Software as a service, which is what Google, Facebook, Salesforce and TechnologyOne offer, is the future of cloud computing,” said Mr Di Marco.

“Software as a service providers continue to invest tens of millions of dollars each year in improving and optimising their customers’ experience, seamlessly taking advantage of the latest technology. This approach future proofs organisations and helps them to embrace rapid technological advances, while also delivering unprecedented reliability, elasticity and scalability.

“The TechnologyOne Cloud is a game changer. There really is no other enterprise software provider in the Australian and New Zealand market doing what we are doing,” he said.
TechnologyOne showcased Ci Anywhere and the TechnologyOne Cloud at its Evolve Customer Conference in February this year, which hosted 1,200 customer attendees. Mr Di Marco said the new initiatives were well received by customers, generating much excitement. The company will continue to roll out the new offerings across a series of regional Showcase events over the coming months.

As the new initiatives fully roll out to market this year, we expect they will facilitate the next stage of growth in licence fees for future years,” Mr Di Marco said. 

Research and Development (R&D) continued to be a significant investment for TechnologyOne at $18.3 million for the half year, up six per cent. The company expects full year R&D expenses to be up 6 per cent, which is substantially below its 8 per cent long-term target set in 2011. The ongoing development of Ci Anywhere and the TechnologyOne Cloud will continue to be a significant focus for R&D over the coming years.

 

In light of strong first half results and confidence in the full year outlook, TechnologyOne increased its dividend for the half year to 1.95 cents per share, up 10 per cent on the prior year. This represents a payout ratio of 62 per cent. Previously the company expected the dividend to be 85 per cent franked over the full year. It is now expected it to be 100 per cent franked over the full year. The company has continuously paid a dividend since it listed in 1999. 

About TechnologyOne

TechnologyOne (ASX:TNE) is Australia’s largest publicly listed software company, with offices across six countries. We create solutions that transform business and make life simple for our customers. We do this by providing powerful, deeply integrated enterprise software that is incredibly easy to use. Over 1,000 leading corporations, government departments and statutory authorities are powered by our software.

We participate in only seven key markets: government, local government, financial services, education, health and community services, utilities and managed services. For these markets we develop, market, sell, implement, support and run our preconfigured solutions, which reduce time, cost and risk for our customers. 

For 26 years, we have been providing our customers enterprise software that evolves and adapts to new and emerging technologies, allowing them to focus on their business and not technology. Today, our software is available on the TechnologyOne Cloud and across smart mobile devices. 

For further information please visit: TechnologyOneCorp.com  

 


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