TechnologyOne posts strong revenue, profit growth for 2010 and announces an additional special dividend
One week after it announced its new cloud computing strategy, Technology One Limited (ASX: TNE) has released its full year results for the year ending 30 September 2010 - showing its seventh consecutive year of increasing revenues and licence fees, and Net Profit Before Tax up 15% to $23.3m.
The Australian software company also announced that an additional special dividend of 1.5 cents will be paid, taking the total dividend for the year to 5.7 cents per share (up 52% on the prior year), which, based on a share price of 95 cents, represents a fully franked dividend yield of 6%. This is a result of the company's strong balance sheet, continuing growth and confidence in the future.
Executive Chairman, Adrian Di Marco, said "It is interesting to note that while TechnologyOne remains a high growth company, it will also now be a high dividend paying company. The Board has indicated that it will continue to consider paying a special dividend in future years if cash reserves remain high, growth continues as is expected, and there is no compelling alternative use for the cash reserves."
Mr Di Marco, said that the results were particularly impressive considering the company had also increased investment in its products, services, offices and people, and spent a record $27.2m on research and development (R&D).
In 2010, TechnologyOne moved into a new global headquarters, incorporating an R&D centre housing more than 350 developers, released the first of its preconfigured, sector-specific solutions, created new solutions and project management teams, and hired a number of high profile senior managers.
The Australian software company has announced a number of major wins during the year, including Multiple Sclerosis Limited, Victorian Skills Commission, Newcastle Airport Limited, High Court of Australia, Unity Water, Epworth HealthCare, and St George Community Housing Limited.
Overseas, it has also secured new contracts, including the New Zealand Department of Labour, MainPower New Zealand Ltd, and Carnegie College in Scotland.
Key to TechnologyOne's success this year has been the introduction of preconfigured, sector-specific solutions, which allow customers to purchase out of the box enterprise software designed to be an 80 per cent fit for their industry, and finetune it to meet their organisation's particular needs.
"This has reduced the time and the risk typically associated with a large, enterprise-wide implementations, and enhanced the value our solutions provide to our customers," said Mr Di Marco.
"We have already won a number of important deals with our preconfigured solutions across our target sectors and, and as we head into the new year, we're expecting many more customers to embrace this approach," said Mr Di Marco.
TechnologyOne's R&D investment has also resulted in new versions of key products, including Customer Relationship Management, Human Resource & Payroll, Enterprise Content Management, and Performance Planning.
Another key achievement for the company was the move to its new corporate headquarters; the largest Australian-owned commercial research and development (R&D) facility for enterprise software.
According to Mr Di Marco, the new R&D centre was a significant investment for the company.
"Our new HQ was designed to offer an outstanding work environment, improve productivity and increase collaboration across our expanding product range. It will also help TechnologyOne continue to attract the best R&D talent," he said.
"The R&D centre is critical to our next stage of growth and will impact positively on market perceptions as we continue to compete successfully against the world's biggest software companies."
Mr Di Marco announced a strategy to remain at the forefront of technology this month, with plans to restructure its business to develop the TechnologyOne Cloud Computing Suite (C2).
"TechnologyOne already delivers its Connected Intelligence (Ci) solutions in the cloud, but to take full advantage of all the benefits of cloud technology, and to deliver to our customers the significant benefits available through reduced operating and capital costs, and more streamlined business operations; TechnologyOne is completely restructuring its business model and re-engineering its software for the cloud" he said.
"Our C2 strategy will offer a markedly different approach from other vendors, who are building cloud strategies around the existing architecture of their products. This is in contrast to TechnologyOne's commitment to re-engineer its software and business from the 'ground up' around the new cloud paradigm.
Mr Di Marco also commented on the outlook for the new financial year saying that the pipeline of opportunities for the coming year remains good and TechnologyOne expects to see further growth in revenue in the 2011 financial year, positioning the company well for continuing profit growth.