Why is this ASX software share price up 11.6x in 5 years?

Enterprise management services have always been in demand. Especially during COVID-19 pandemic when many businesses had to shift online. Content management, workflow management, process digitalisations and web content management services saw demand inching higher. One ASX listed company seems to have made the most of it with its share price appreciating 44% in the past one year alone. 

Objective Corporation Limited(ASX:OCL)

Headquartered in Sydney, Objective Corporation Limited (ASX:OCL) is a software business engaged in enterprise content management. It is involved in creating information databases and automating processes that support an enterprises’ information, governance and regulatory needs. OCL helps its clients with digital transformation. It has over 1000 customers across the globe, including government departments like, Queensland Police Service, Department of Premier and Cabinet, NSW and others.

OCL has four business lines based on the type of services it offers. These are-

Image Source: © 2021 Kalkine Media

Ongoing projects at OCL-

  • Under content business line, OCL launched its updated product Objective ECM 11 with enhanced process automation functions.
  • In Reg tech it renewed a five-year contract with transport NSW for its Objective IQ product which helps streamline in-field compliances.
  • Professional subscription version products were with enhanced functionalities are being offered under its planning and building solutions business, for clients in Australia and New Zealand.
  • Under keystone projects OCL is engaged with the Australian financial services and insurance industry. It has also welcomed new customers in UK for statutory planning solutions. 

OCL’s performance on ASX-

Over the last five years OCL share price has gone up 11.6x, from AU$1.76 in October 2016 to AU$20.46 in October 2021.

Image Source- Refinitiv

More investors have bought OCL shares on ASX in last five years, with peaked buying witnessed before dividend dates. Shares have given a return of over 70% YTD on ASX. In last one month alone, shares prices have jumped over 17%. OCL share price is topping its’ five year charts at AU$20.46 as of 20 October 2021.

 

Let’s now look at how this software company has performed in terms of fundamentals in the last five years.

OCL’s Financial performance in last 5 years-

Objective corporation has maintained its revenue and seen an uptrend in profits over the last five financial years (FY17-FY21).

Data Source- Refinitiv

Image Source: © 2021 Kalkine Media 

From the above chart it is evident that OCL has improved its margins, over the last five financial years.

In addition to this, OCL’s financials reflect a top line growth, with revenue improving from AU$62.60 million in FY17 to AU$95.06 million in FY21. EPS has also gone up from AU$8.20 in 2017 to AU$16.09 in 2021.

Gross distributions to shareholders have also increased year-on-year, from AU$4.59 million in FY17 to AU$8.46 million in FY21. OCL’s current annual dividend yield stands at 0.44% (as of 20 October 2021), based on last fully franked distribution of AU$0.090 per share.

OCL’s road ahead-

With robust results in FY21 and strong growth in recurring revenues, OCL’s business has remained resilient to COVID-19. Its services and solutions especially in the Reg tech business line growing with a number of government clients getting added as its customers globally. Further, OCL expects a continuation to its growth momentum in FY22. The company is also planning to add new products to its portfolio in FY22. It seeks to make most of organic and inorganic growth opportunities. 

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