TechnologyOne Reports Record H1 FY20 Profit
TechnologyOne Limited (TNE), one of Australia’s largest Software as a Service (SaaS) companies, has released its H1FY20 results. The firm achieved a record half-year net profit before tax of $25.9 million, 6 per cent higher relative to the previous corresponding period. More importantly, the results also reflect TNE’s ability to deliver its 11th consecutive year of record profit.
Undeniably, the firm’s rising star is proven to be its SaaS business, where annual recurring revenue posted a 33 per cent increase to that of $110 million. TechnologyOne’s Enterprise Resource Planning (ERP) solution consolidates core business systems in real-time through SaaS. Since its introduction several years ago, the platform has since transformed the way businesses operate, especially in the COVID-19 environment where accessibility is vital.
SaaS is clearly well-liked by its users. This is evident in the first half report where it is now utilised by 475 enterprise customers, a significant 22 per cent higher from 389 customers relative to the previous corresponding period. Several clients that are currently using the software include The University of Melbourne, nib Group, Southern Cross Hospitals, and the Australian Government Department of Health. From a broader point of view, as SaaS customers now boast hundreds of thousands of users, this allows TechnonologyOne to be the largest multi-tenated SaaS offering within the country. Given the robust growth, the firm is therefore expecting to witness 1000 enterprise customers before 2022.
Despite the firm’s stellar performance, its performance in March was adversely impacted by the COVID-19 pandemic. However, the firm remains well-positioned as it continues to lift to its SaaS vision of “Any device, Anywhere, Anytime”. Within the firm, the firm has had no issues transiting to remote working and can therefore continue to support customers without having to consider underlying technologies. The outbreak of the coronavirus has posed as a serious threat to most companies. Yet, it is during such challenging times where consumers are better able to distinguish TechnologyOne from its competitors. More importantly, customers can differentiate between inferior ‘cloud-hosted’ solutions as opposed to the first-hand benefits experienced in TNE’s SaaS software.
Moving forward, TechnologyOne remains in an excellent position. To date, close to ninety per cent of its revenue has been locked in through recurring subscription. From a financial point of view, TNE remains debt-free and is backed by a robust balance sheet. Despite recording a loss of $800,000 in the United Kingdom, the region continues to make steady improvements and presents ample growth opportunities in the near term. With the above considerations in mind, the firm is confident in which the way the company is evolving. This confidence is subsequently reflected in the declaration of an interim dividend for the half-year of 3.47 cents per security, a 10 per cent increase relative to that of the previous corresponding period.
By Caroline Wong
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