Licence fee increase drives TechnologyOne profits

An increase in licence fees has played a central role in driving a 15 percent profit boost for Australian software company TechnologyOne for the 12 months ending September 30.

Australian software company TechnologyOne has reported a 15 percent surge in net profit before tax for the 12 months ending September 30, driven by increases in licence fees.

The Australian Securities Exchange (ASX)-listed company, which released its preliminary annual financial report (PDF) on Tuesday, told shareholders that it recorded its eleventh consecutive year of record revenues, surpassing the AU$1 billion market capitalisation mark, and gaining entry into the S&P/ASX 200 Index on September 19.

TechnologyOne reported a 15 percent boost to its net profit before tax for the period to AU$40.2 million, with the company attributing much of this growth to an 11 percent increase in licence fees.

It also pointed to strong customer retention and new product releases as two of the forces helping to drive its growth over the year.

The Queensland-based company saw a revenue boost of 8 percent for the year to AU$195.1 million, with an 11 percent increase in initial licence fees to AU$42 million, and a 16 percent increase in annual licence fees to AU$84.2 million.

Its net profit after tax was AU$31 million, a 15 percent increase on the previous year's result.

Over the year, TechnologyOne secured 15 enterprise cloud deals, with a number of contracts going to big-ticket clients, including Tourism Queensland, Macquarie University, and St Vincent de Paul Society.

In May, the company announced that it had signed an AU$13 million deal with Campaspe Shire Council in northern Victoria, offering the council its OnceCouncil solution, and in February, it won an AU$15 million deal with the Catholic Education Commission of Victoria to deliver enterprise software to 486 schools statewide.

Of AU$154.9 million worth of expenses for the year, TechnologyOne spent AU$38 million in research and development over the period, representing about 19 percent of its revenue, with this investment largely attributed to the release of the next iteration of its enterprise suite Ci Anywhere.

Executive chairman Adrian Di Marco said that the company's continued focus on its research and development activities will enable its long-term success.

"Our ability to evolve and adapt to a rapidly changing world, while remaining focused on what we do, has been the key to our long-term success," said Di Marco.