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Big NZ wins helps TechnologyOne hit $90 million revenue mark

Big NZ wins helps TechnologyOne hit $90 million revenue mark

“We are now preferred supplier for a number of very large contracts, which are under contract negotiation.”

Australian enterprise software provider TechnologyOne has reported revenue growth of 3 percent, totalling AU$90 million triggered by local wins in the New Zealand market.

According to the company, in announcing results for the half year ending 31 March 2015, results are in line with the market guidance provided at the start of this financial year, with profit before tax down 10 percent to $11.4 million.

As also previously indicated, the report claims that half year results “cannot be extrapolated to determine full year results”, with TechnologyOne subsequently expecting “strong growth” over the full year.

“TechnologyOne is well positioned for continuing strong profit growth of 10 percent to 15 percent over the 2015 full year based on the strength of our sales pipeline for the second half, which will also see strong licence fee growth over the full year,” says Adrian Di Marco, Executive Chairman, TechnologyOne.

“We are now preferred supplier for a number of very large contracts, which are under contract negotiation.”

Di Marco says the company continued to invest heavily in a number of key strategic areas including TechnologyOne Cloud.

“TechnologyOne Cloud grew strongly in the first half, with Annual Contract Value up 100+ percent to $4.1m,” he adds.

“We are on target to have 80 customers by December 2015, with Annual Contract Value of $8+ million, which will be up another 100 percent.

“We also recently welcomed Wellington City Council – one of New Zealand’s largest councils, Glenorchy Council and AsureQuality as cloud customers.”

As the cloud computing industry matures, Di Marco believes organisations are increasingly avoiding the “dirty hosting approach” - software that is ‘lifted and shifted’ into a hosting environment - and choosing vendors that can deliver a complete enterprise Software as a Service (SaaS) offering.

“The SaaS model serves our customers far more effectively, by simplifying their IT infrastructure, optimising the performance of their platform and enterprise systems, and delivering enormous economies of scale and a future proof solution in a way that hosting providers will never be able to do,” Di Marco adds.

Di Marco says the market also reinforced its confidence in TechnologyOne’s SaaS offering, with the company being named as a preferred supplier on the Australian Government’s Cloud Services Panel.

“This shows significant growth as we transition customers to a cloud first, mobile first world,” he adds.

“The next phase of our TechnologyOne Cloud will provide a massively scalable platform with significant economies of scale, delivering us and our customers an even stronger competitive advantage.

“We expect this strong momentum to continue in the years to come.”

There was also positive market sentiment during the company’s first six months in the S&P/ASX200, with the share price up 26 percent to $4.02 at the end of the period and hitting $1.2 billion market capitalisation.

In light of confidence in the full year outlook, Di Marco says TechnologyOne has increased its dividend for the half year to 2.15 cents per share fully franked, up 10 percent on the prior year, representing a payout ratio of 75 percent.


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