Technology One (ASX: TNE) has reported its full year result to 30 September 2019.
Technology One is one of Australia’s largest software as a service (SaaS) businesses with offices in six countries. It has been operating for more than three decades and now has over 1,200 businesses, government departments and statutory authorities as clients.
Technology One’s FY19 Result
The company reported that its revenue increased by 13% to $13 million over the year, driven by Software as a Service (SaaS) annual recurring revenue (ARR) growing by 44% to $102 million.
On a statutory basis, net profit before tax grew by 208% to $76.4 million and net profit after tax increased by 170% to $58.4 million with the new accounting change of AASB15.
Looking at the higher bar of the comparable result from last year, net profit before tax of $76.4 million rose 50%.
Cashflow generation (operating cashflow less capitalised development costs) was down 14% to $45 million. Research & Development investment of $60 million before capitalisation was up 11% and represented 21% of revenue.
Technology One Dividend
The rise in the profit allowed the Technology One Board to increase the FY19 total dividend by 8% to 11.93 cents per share.
Technology One Management Comments
Technology One CEO Edward Chung said: “I am pleased to announce our tenth consecutive year of record profit and record ARR.
“Our global SaaS ERP solution is transforming our customers’ business and makes life simple for them. This is resonating strongly with the market, driving our continuing strong results.
“Our Total Annual Reccuring Revenue has now hit $202 million and is set to exceed $500 million in FY24.”
Outlook
The company thinks it can double in size in the next five years. Management said the sales pipeline for the new financial year “remains strong” and the SaaS business will continue to “grow strongly” in the new financial year.
Technology One is aiming to grow its profit margins to 35% in the future through significant economies of scale.
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