TechnologyOne announces record profit up 17%

Technology One Ltd (ASX:TNE), a leading Australian provider of enterprise software solutions, has announced its results for the full year ending 30 September 2008, showing continuing strong growth with Revenue up 41% to $110.2 million.

Highlights of the results are as follows:
  • Net Profit After Tax (NPAT) up 17% to $17.23 million
  • Net Profit Before Tax (NPBT) up 17% to $23.13 million
  • Revenue up 41% to $110.2 million
  • Total Licence Fees up 23% to $22.6 million
  • Consulting revenue up 59% to $32.7 million
  • Plus/Project Services revenue up 29% to $10.7 million
  • R&D expenditure up 53% to $21.2 million, representing 19% of revenue, fully expensed as incurred during the year
  • Expenses excluding R&D up 47% to $65.9 million
One of TechnologyOne’s biggest success stories this financial year was the launch of its new Business Intelligence and Enterprise Budgeting solutions. Since the general release of these products in September 2007, more than 70 customers have signed up for one or both of these solutions.

TechnologyOne also developed a new Customer Relationship Management (CRM) product during the period, which will ship in the next 6 months and has the potential to profoundly impact on all of the company’s products and markets.

The organisation’s new Connected Intelligence series of applications continued to drive sales and over 80% of customers have now migrated onto this platform, with 98% of customers committing to move onto this exciting new generation of products.

TechnologyOne Executive Chairman, Mr Adrian Di Marco, said that this positions the organisation very well for future growth, as competitors have still not released a new generation product and continue to face the considerable hurdle of attempting to migrate their customers onto a new platform.

“In recent years we have won new customers who have moved their business to us because of the inability of our competitors to provide cost effective, seamless upgrade paths,” he said.

A significant event during the year was the acquisition of the Avand Enterprise Content Management (ECM) company, followed later in the year by the acquisition of the Outcome Manager Performance Planning business. In both cases we were acquiring strategically important technologies that have significant potential to drive sales growth in the medium term. The current economic environment means that future acquisitions are also possible.

All regions across Australia performed well during the period. The United Kingdom continued to gain traction and experienced strong growth with a number of significant wins.

Mr Di Marco said the results have been achieved during a period of significant upheaval in the financial markets.

“This is a good indicator of the strength of our business, and the importance placed by our prospective and existing customers on their enterprise software systems.”

The company will continue its focus on providing end to end solutions to meet the specific requirements of customers in the education, health and community services, financial services, utilities, managed services (incorporating commercial, media, entertainment, property and construction), Local Government and Government (State/Federal/Central) sectors.

“Our concentration on these seven core vertical markets will enable us to focus our sales, marketing, R&D and consulting teams to deliver an exceptional customer experience, with the aim of becoming the dominant supplier in our chosen vertical markets.”

Mr Di Marco said that the sales pipeline for the company remains strong as it enters the 2009 financial year.

The dividend for the year has once again increased, this year by 10%, to 4.12 cents fully franked, making this the eighth consecutive year of increasing dividends.