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TechOne reveals spike in profits as it celebrates win over global rival

Business

TechnologyOne lifted its after-tax profit by 48 per cent for the half-year to $28.2 million as it claimed a big win over global competitor SAP.

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The company warned there was likely to be an impact on its full-year result from its legacy licence fee business, which it said would be about $7 million over the 12 months.

TechOne also boosted its dividend for the first half by 10 per cent to 3.82 cents a share.

Once it winds back its licence fee business, TechOne chief executive Edward Chung said the company was expecting its software-as-a-service and its continuing business to grow by 15 per cent a year “over the next few years”.

“We also see our total annual recurring revenue increasing to $500 million by full-year 2026 from the current base of $233 million,” he said.

He also forecast pre-tax profit margins would grow to 35 per cent.

Chung said it was the 12th year of producing a record profit for the first six months.

“We had many significant wins in the first half,” Chung said.

These included being chosen by the federal Department of Agriculture, Water and Environment to modernise their business.

“This was a significant win against SAP,” Chung said.

He said the UK business was improving with a $500,000 profit before tax for the six months and Chung expected strong growth in the country for the full year.

Chung said that while the $7 million hit from lower licence fees was significant the shift away from the legacy business was part of its strategy to grow its software as a service business.

“We expect to see our SaaS annual recurring revenue continuing to grow strongly, up by more than 35 per cent over the full year,” Chung said.

Its full year guidance was for a pre-tax profit of between $94.3 million and $98.6 million, an increase of between 14 and 20 per cent on the 2020 result.

Chairman Adrian Di Marco said the results reflected a strong demand for its SaaS and 85 per cent of its revenue was now recurring subscriptions.

 

 

 

 

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