TechOne profit down as cloud revenue more than doubles

TechnologyOne has said it will hit its total annual profit growth target of 10-15 percent despite a drop on profit the half year.

TechnologyOne has reported a 10 percent drop in net profit before tax for the half year ending 31 March 2015, down to AU$11.4 million, with revenue up 3 percent to AU$90 million.

Executive chairman Adrian Di Marco said TechnologyOne is well positioned for continuing profit growth of 10 to 15 percent over the full year based upon their sales pipeline for the second half of the year, which will bring strong licence fee growth.

With the continued investment in areas including the TechnologyOne Cloud, Di Marco said that Cloud grew strongly in the first half, with annual contract value up more than 100 percent to AU$4.1 million.

At the same time last year, the Queensland based company reported a 17 percent boost in net profit, posting $12.8 million in pre-tax profit on AU$87.6 million in revevnue. For the end of financial year 2014, TechnologyOne had reached their projected 15 percent net profit, accredited to the increase in licence fees.

The company signed a number of customers in the first half of the year, including Wellington City Council, Glenorchy Council, and AsureQuality.

Di Marco said that TechnologyOne are on target to have 80 customers, bringing with them an annual contract value in excess of AU$8 million by the end of the calendar year.

"We are now preferred supplier for a number of very large contracts, which are under contract negotiation," he said.

"The next phase of our TechnologyOne Cloud will provide a massively scalable platform with significant economies of scale, delivering an even stronger competitive advantage."

Research and development continued to be a significant investment for TechnologyOne at AU$19.2 million for the half year, up five per cent. The company will continue to follow their research and development program over the coming years, focusing again on the ongoing development of Ci Anywhere and the TechnologyOne Cloud.