Revenues for the period are up 10% on last year, from $79.7 million to $87.6 million. Growth in profit was even stronger, up 17% from $10.9 million to $12.8 million. The results follow five years of steady growth, as the ASX-listed company consolidates its hold on a number of vertical markets in Australia.
TechnologyOne specialises in government (with a very strong local government practice), education (universities and TAFEs), financial services, and health and community services. One of the most impressive aspects of the slide presentation it issued to accompany the release of the financial results was the extent to which revenues come very evenly from each of these sectors – the company is not overly dependent on any one vertical.
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.
Di Marco told iTWire that TechnologyOne was looking to substantial growth in the UK, and had strengthened its management team there.
Initial licence fees also grew by 24% in the half year, which Di Marco said was a strong indicator of the resilient nature of the enterprise software market, and the continuing success of TechnologyOne’s Connected Intelligence (Ci) product range.
Di Marco said the results were particularly gratifying because they did not yet include revenues from the company’s next generation Ci Anywhere mobile product range. “Ci Anywhere’s support of smart mobile devices offers unprecedented flexibility to mobilise our customers’ workforces. Its design and ease of use raises the bar for enterprise software.”
Di Marco also 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 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 Di Marco. TechnologyOne uses the Amazon Web Services cloud platform, with local hosting in Sydney.
“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,” Di Marco said. “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.”
Research and Development (R&D) continued to be a significant investment for TechnologyOne, at $18.3 million for the half year, up 6%. 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% on the previous year. The company has continuously paid a dividend since it listed in 1999.