Shares in TechnologyOne (TNE), the country’s largest local enterprise software jumped more than 5% at one stage yesterday after it slipped out solid first half results late Monday.
The shares eased in late trading and closed at $5.23, up 4% as investors gave the thumbs up to the half year result and its 12% jump in revenue and small lift to interim dividend.
Technology One executive chairman Adrian Di Marco said his firm was on track to post continuing profit growth of 10% to 15% over the 2016 full year, with revenue for the March 31 half up 12% at $101 million.
Net profit before tax was down 17% to $9.4 million, due to total expenses up 16%. But the company said total expenses will come down dramatically over the full year and earnings will rebound.
Interim dividend was lifted from 2.15 cents a share to 2.36 cents a share.
“We are now part of an elite group of companies globally delivering true enterprise software as a service, making our software the premier enterprise cloud offering in Australia and New Zealand,” Mr Di Marco said in a statement.
“We are also the only enterprise provider offering a fully configurable solution, with a mass production line of servers running our software for our customers.
Mr Di Marco said TechnologyOne’s cloud business was growing rapidly with cloud services fees up by more than 100 per cent on the previous year and 21 new customers signing up for its cloud service.
He said the company is now focused on migrating all cloud customers onto its 5.0 architecture.
“Cloud 5.0 introduces the start of our mass production Software as a Service (SaaS) offering, which is massively scalable with significant economies of scale,” said Mr Di Marco.
“Our enterprise software as a service offering is massively scalable, resilient and fault tolerant, and we keep investing in and improving our software.”
Research and Development (R & D) spending rose 13% in the half year to $21.8 million.
“R & D represents 22 per cent of revenue, which exceeds the average of our competitors by approximately 10 per cent,” Mr Di Marco said.
“It is absolutely critical that we continue to invest in our future. The success of our SaaS cloud offering in particular, has been because we have invested heavily in R & D, and are focused on driving our technology forward,” he added.
