Back-office software specialist, TechnologyOne, has reported strong profits on the back of key customers wins in the first half of year.
The company reported a 17 per cent increase in net profit before tax in its half year results and predicted 10 to 15 per cent growth for the full year.
It posted $9.9 million in interim net profits, up from $8.7 million in the first half of 2013, with revenues also lifting 10 per cent.
Annual license fees grew 13 per cent, while initial license fees also grew 24 per cent.
The news pushed share up 5.2 per cent to $2.60, nearing record highs of $2.63 posted earlier this year.
The company said it would lift its interim dividend to shareholders by 10 per cent to 1.95 cents per share, fully franked.
The solid result was helped by the addition of a number of new customers in the first half of year, including OneCare Limited and Auckland University of Technology.
In February, it won a $15 million contract to jointly develop an integrated school administration package with and for the Catholic Education Commission of Victoria (CECV).
It also continued to increase its footprint in the UK, adding new customers Edinburgh Leisure, The East Riding of Yorkshire Council and Pepper Finance Ireland. TechnologyOne executive chairman, Adrian Di Marco, said the next generation of the company's Ci product range, Ci Anywhere, provided a platform for continued strong growth in licence fees in future years. "Ci Anywhere's support of smart mobile devices offers unprecedented flexibility to mobilise our customers' workforces, and its beautiful design and ease of use truly raises the bar for enterprise software," he said. Di Marco said the TechnologyOne Cloud, which delivers the TechnologyOne Ci Enterprise Suite as a service to customers, would also become a major new platform for growth.
"The TechnologyOne Cloud enables our customers to prepare for a cloud first, mobile first world," he said. "Cloud computing has become the next gold rush in the IT industry, with many IT companies attempting to cash in on the cloud bandwagon.
He said Cloud hosting providers were of particular concern.
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"Cloud hosting should be seen as the last resort, because it is limited in what it can realistically offer," he said.
"Cloud hosting providers adopt a 'lift and shift' approach, simply installing software in the cloud. "On the other hand, software as a service sees the company that builds the software, also run the software as a service for its customers. Software as a service, which is what Google, Facebook, Salesforce and TechnologyOne offer, is the future of cloud computing."
He said Software as a service providers continued to invest tens of millions of dollars each year in improving and optimising their customers' experience, seamlessly taking advantage of the latest technology.
"The TechnologyOne Cloud is a game changer," he said.
"There really is no other enterprise software provider in the Australian and New Zealand market doing what we are doing."