TechnologyOne announces continuing growth for first half 2010

TechnologyOne (ASX:TNE) today announced its results for the half year ending 31 March 2010, reporting continued growth with Net Profit After Tax up 47% on the previous comparative period.

The company's revenue for the first half was $59.2m (up 6%), with Net Profit Before Tax of $6.9m (up 38%) and Net Profit After Tax $5.7m (up 47%).

Expenses excluding R&D were $39.6m (up 3%) with R&D expenses $12.7m (up 1% on the previous comparative period).

Executive Chairman, Adrian Di Marco, said the result was especially pleasing, given the challenging and uncertain economic environment.

"TechnologyOne has posted continuing growth in revenues and profits in a challenging and uncertain economic time. This is particularly encouraging because, in order to continue to grow our business, we are winning new customers from our competitors," said Mr Di Marco.

TechnologyOne acquired a range of new customers across its key vertical markets during the period, including: the High Court of Australia, Land Development Agency, and the Department of Labour (NZ) in the government sector; Burwood Council and Moonee Valley Council in the local government sector; Newcastle Airport and Unitywater in the utilities sector; Multiple Sclerosis Limited and Australian Home Care Services in the not for profit sector; Carnegie College (UK) and 13 Victorian TAFE colleges in the education sector; and National Transport Insurance and Vision Super in the financial services sector.

The company is leveraging its extensive experience in the key markets it services by introducing a new internal vertical market solution group to deliver pre-configured industry solutions for each sector.

"Our new vertical market solutions will draw on the company's longevity and experience in key markets to deliver pre-configured solutions that address the key needs of each industry sector, with flexibility to tailor and accommodate for the unique requirements of each organisation," said Mr Di Marco.

"This is in direct response to increasing expectations from the marketplace that enterprise vendors should provide customers with quality advice and direction regarding best practice for their particular industry," he said.

"Our industry solutions will dramatically reduce the implementation times, costs and risks associated with large, enterprise-wide implementations."

TechnologyOne moved into its new international R&D centre in Fortitude Valley, Brisbane, on 14 May 2010. The centre is the largest Australian R&D centre for software development and has been designed to enhance collaboration and stimulate innovation as the company commences development of its next generation of enterprise software.

At a projected cost of $120m, the project - code named ‘Next Gen' - will embrace leading edge concepts and emerging state of the art technologies.

Next Gen will follow the success of TechnologyOne's Connected Intelligence platform, released in 2005 and now used by more than 800 of Australia's largest corporations, government departments, universities and utilities providers.

Mr Di Marco said the operating environment remains uncertain and challenging.

"The company is continuing to experience aggressive tactics from competitors, customers delaying decision making, and longer contract negotiation timeframes," he said.

"Having said that, market conditions have not deteriorated any further in the last 12 months - they have now stabilised and we expect in the next 12 to 24 months to see conditions improve.

"Clearly our first half year result has been very strong and the company is positioned well for continuing growth this year."