TechOne, now the largest listed Australian software company, entered the S&P/ASX 200 Index on 19 September, surpassing the $1 billion market capitalisation mark for the first time.
Net Profit Before Tax is up 15% on the prior full year period to $40.2 million, which is at the higher end of market guidance of profit growth of between 10 and 15%.
TechOne attributed its strong growth to an 11% increase in licence fees, supported by strong customer retention and new product releases. The company signed more than 50 enterprise customers this financial year, including Bendigo & Adelaide Bank, Queensland’s first dual-sector university, CQUniversity and Campaspe Shire Council.
According to TechOne founder and executive chairman Adrian Di Marco, in addition to its traditional strength in local government, strong areas of growth have been in financial services and state government. Mr Di Marco said that TechOne had won business off Oracle in the state government area, while it had ripped business out of SAP's hands in financial services.
"It's well known that there have been blowups with Oracle in state government and we did a lot of business with the WA government," Mr Di Marco said.
"In the financial services area, clients are beginning to cotton on to the fact that projects don't have to take three years to implemet and cost enormous sums."
In 18 of the 50-plus new corporate customers, TechnologyOne says it replaced competitive systems from Oracle, SAP and Microsoft.
True to his message of recent years, Mr Di Marco used the positive financials as a platform to slam both global third party consulting firms and the multinationals enterprise software giants.
“Smart organisations are voting with their feet and moving away from the fundamentally broken model of using third parties such as IBM and Accenture for their implementations, and implementing monolithic systems from the large multinational ERP vendors,” he said.
“Inevitably, when problems arise during implementations where third-parties are involved, no one takes responsibility. All the parties start pointing fingers and playing the blame game. The customer, their workforce and the community are the ones who ultimately suffer from this lack of accountability, as we saw with the Queensland Health payroll disaster, New Zealand’s Novopay and others like it. Using third-party integrators is truly the worst of all worlds.
“Our customers have our complete support and our commitment that the software will be configured to meet their exact needs, but the software itself will not be modified. Once the system is implemented, they do not need to worry about being left behind on an outdated, highly customised system that becomes too expensive and risky to upgrade. Instead, they enjoy the benefits of our continuing strong R&D investment and new releases, which will take their business into the future, and onto the cloud if they choose - with no additional licence fees, or systems integrators required,” he said.
In FY 2014, TechnologyOne also secured 15 enterprise cloud deals including St Vincent de Paul Society, Tourism Queensland, Macquarie University, Assure Quality (NZ) and Aylesbury Vale District Council (UK).
“Our ability to evolve and adapt to a rapidly changing world, while remaining focused on what we do, has been the key to our long term success,” Executive Chairman Adrian Di Marco said.
“When combined with our innovation, creativity and substantial ongoing investment in new and emerging technologies such as cloud computing and smart mobile devices, we are well positioned for continuing strong growth in the coming years.”
R&D continued to be a significant investment for TechnologyOne at $38 million for the full year, representing 19 % of revenue, and largely attributed to the release of the next evolution of its enterprise suite, Ci Anywhere. Ci Anywhere supports any and all mobile devices and delivers on the company’s vision - any device, anywhere, any time.
“Ci Anywhere has met with a very enthusiastic response from customers,” Mr Di Marco said.
“As we rapidly move into a cloud-first, mobile-first world, organisations that fail to embrace these technologies will miss out on the efficiencies to be gained from a mobile-enabled workforce. With Ci Anywhere and the TechnologyOne Cloud, we are well positioned to help our customers exploit these benefits by delivering our enterprise software as a service on any device they choose.”