Sydney, Nov 1 (Asia Pulse) - Australian accounting software firm Solution 6 Holdings Ltd will continue on the acquisition trail as it seeks growth and opportunities in the internet era.
Solution 6 managing director and chief executive officer Chris Tyler told shareholders today that Solution 6 would "pursue new opportunities and massive growth" in the new Internet-driven environment to capitalise on its leading position in the accountancy software market. "I think that the new economic environment looks absolutely fantastic for Solution 6, we are a big part of this economic environment," he said at a general meeting.
"(The Internet) environment is very much in the Model T era...the outlook for the next five to ten years is for massive performance improvement." As part of this plan, Solution 6 would continue to build its blue chip partnerships, with the shareholders today approving a 25 per cent majority shareholding by telco giant Telstra Corporation Ltd.
Also approved was the allotment of shares to New Zealand based company, Office resources Centre Ltd and Emphasys Corporation Ltd. The two companies have approval to secure 440,000 and 1.12 million shares respectively.
Mr Tyler said that the move, along with Solution 6's established venture with software developer, SAP and computer giant IBM, placed Solution 6 in a unique position to take advantage of future growth. "I don't think that there's another company that can claim high quality, strong blue chip partnerships...(we can continue to be) a real world class player in the new emerging business market," he said. These partnerships, he said, would allow Solution 6 to enhance the provision of services for accountants, whose needs were changing and growing rapidly. "They really allow us to apply more capability around (our accountancy products...we will be going into the market delivering and adding value capabilities," he said.
In response to a shareholder question about whether the company was similar to US based firm, Amazon.com in not making profits, Mr Tyler said that Solution 6 was a "unique firm" in "an irrational competitive environment." "We're not an Amazon.com...Solution 6 is a unique company because it's a very healthy cash cow business," he said. He added that the company would continue to spend on acquisitions rather then cut back on research and development to make huge profits. "(Acquisitions and partnerships) are what drive physical costs out of goods and services... its a big game and those who can link together stand to deliver massive capabilities and massive value," he said.
Mr Tyler added that Solution 6 would aim for a split of 35- 40 per cent growth and 15 per cent EBIT (earnings before interest and tax) over the next two years. The company would not however be seeking a NASDAQ listing or a share split in the near future to drive the business, he said. "The reality is that NASDAQ is the universal global currency (in the technology industry)...but we have through long and hard about the Australian Stock Exchange versus the NASDAQ or a combination, and we prefer an ASX listing," he said.
A share split was not on the cards as it was the company's responsibility to manage the "performance of a good healthy stock as opposed to driving the stock price up for short term gains," he said.