24 Nov 2020
- Local government digital transformation projects aid TechnologyOne’s UK growth during pandemic
- TechnologyOne sees strong Software as a Service (SaaS) growth in UK local government and education sectors
- Queensland Trade Commissioner says UK-Australian Trade Agreement could usher in new era of digital trade, ecommerce and investment in new technologies, with Queensland companies showcasing Aussie drive and innovation.
Australian enterprise Software as a Service company TechnologyOne (ASX:TNE) is looking to accelerate its growth in the United Kingdom, after today announcing strong growth with SaaS ARR up 22%, delivering a break-even result in the UK.
TechnologyOne’s UK financial performance has swung from a loss of AUS$1.9m to breakeven, for the financial year ending 30 September 2020. The turnaround has been driven by a growth in digital transformation projects at local councils during the COVID-19 pandemic, and improved operational performance.
Despite challenging financial pressures amongst local government and education sector clients, as a result of the pandemic, TechnologyOne expects to continue to see strong growth in the UK over coming years. It forecasts that the growth in remote working, distance learning and budgetary pressures will mean more and more organisations will look to make savings by digitally transforming their operations.
TechnologyOne’s SaaS platform is helping employees at UK local authorities and higher education institutions access vital business information via a secure web-based portal from any device, anywhere, at any time.
TechnologyOne's Chief Executive Officer, Edward Chung, said he was excited about the opportunities the UK market brings. While it currently represents a fraction of overall business, TechnologyOne estimates that the UK represents a large addressable market, three times the size of its Asia-Pacific core business.
“We’re confident the UK remains an exciting and large market for our products and will become a significant contributor of profit growth in future years. As a result, we’re continuing to invest strongly in the UK,” said Mr Chung.
The Brisbane headquartered company, which has UK operations in Maidenhead, Berkshire, has won a number of major contracts over the past twelve months, helping local councils and universities digitally transform their finance, HR, procurement, asset management and student experience functions. Recent contract wins and go-lives include West Lindsey, North Wales Fire & Rescue Service and Warwick District Council. One area where TechnologyOne has seen particularly strong growth is in Northern Ireland, where it has signed deals with nine local councils, including Mid and East Antrim Borough Council and Mid Ulster District Council.
A new UK-Australia free trade agreement could increase digital trade and innovation
With the UK and Australia concluding its second round of free trade discussions last month, TechnologyOne also believes closer bonds between the two countries could increase digital trade and innovation.
Linda Apelt, Queensland Trade and Investment Commissioner in the UK, added, “The UK is Australia’s seventh largest trading partner and as the two countries forge a new, post-Brexit free trade agreement, digital trade and communications will be at the heart of what we look to do.
“Queensland companies - like TechnologyOne - continue to showcase the Aussie innovation and drive in countries including the UK. I believe a new UK-Australian free trade agreement could create the perfect opportunity to reduce e-commerce barriers and stimulate investment in new technologies, for the benefit of all our citizens.”
Showing its support for UK economic recovery, TechnologyOne also partnered with the UK Tech Cluster Group, this year, to support its Recovery Roadmap. The initiative brings together over 400 technology leaders within local, regional and national public sector organisations to establish strategies for economic recovery and growth in a post-COVID-19 world.
The UK news comes as TechnologyOne announced overall record group revenues, including SaaS ARR AU$134.6m up 32%, and Underlying Net Profit Before Tax of AU $86.1m, up 13%.
The company said they had also made an R&D investment of AU$68.1m (up 13%), which equates to 22% of Revenue.