TechnologyOne announces half year Net Profit Before Tax up 33%

TechnologyOne (ASX:TNE) today announced its results for the half year ending 31 March 2011, reporting continued growth with Net Profit Before Tax up 33% to $9.1m on the previous period.

The company's revenue for the first half year also strengthened, up 21% to $71.6m, and Net Profit After Tax grew 29% to $7.4m.

The company experienced continued strong growth with initial licence fees, annual licence fees, consulting services and TechnologyOne Plus (the company's project services division) all up.

TechnologyOne Executive Chairman,  Adrian Di Marco,  said the half year results were pleasing and strong, given the challenging market conditions and the investment the company had undertaken in a number of future growth areas.

"On the back of the company's significant investments in areas such as the new preconfigured software solutions group, the new mobile solutions group, the United Kingdom business and the initial Research and Development (R&D) on our Cloud Computing enterprise suite (TechnologyOne C2), TechnologyOne continues to post impressive growth in profit and revenue," he said.

"These significant investments will in future years deliver us significant new revenue streams and it will allow us to continue to increase market-share over our multinational competitors.

"We are starting to see the return on investment into our preconfigured ‘One' solutions, with our customers enjoying the industry-specific software solutions we have developed following many years in our vertical markets.

"Customers such as Newcastle Airport, Hurstville City Council, St George Community Housing and The Disability Trust have signed up for our OneAirports, OneCouncil,
OneHousing and OneCommunity solutions respectively."

The creation of a new Mobile Solutions Group will enable the company to build a new mobility platform and a range of mobility solutions across its entire product range using iPhones, iPads and other mobile devices.

In the future, the new generation Cloud Computing suite, TechnologyOne C2, will also create a new platform for continuing growth.

The company's R&D expenses were also up for the half year, growing 17% to $14.9m, representing 20% of revenue. All R&D was fully expensed.

"Our sizeable investment in R&D makes us one of Australia's largest software R&D organisations, with our R&D expenditure budget for this year in excess of $30M," he said.

The half year also saw TechnologyOne make a significant investment in its people, introducing the ‘Compelling Customer Experience' program.

"For me personally, when our customers bet their business on our software, we have a moral obligation to deliver them a compelling customer experience." said Mr Di Marco.

Mr Di Marco said as part of the company's growth strategy, it was also trialling a new offshore Development Centre over a six to twelve month period.

"The new offshore centre will allow us to continue ongoing development on our current Ci (Connected Intelligence) suite of products, enabling our Australian R&D teams to focus their efforts on building our new C2 suite of products for the Cloud," he said.

"While C2 is our future, we remain committed to supporting our 800-plus customers currently using our existing Ci product suite and will continue to do so for many years to come.

"We will support our Ci suite for the long term - the next 5-10 years - with our customers continuing to enjoy new functions, features and an incredibly stable platform.

"The offshore Development Centre will also help us deliver against our Compelling Customer Experience promise by providing continued great support and ongoing development of our Ci suite."