TNE Highlights The Details Of Its Performance At The UBS Conference

  • Nov 13, 2018 AEDT
  • Team Kalkine
TNE Highlights The Details Of Its Performance At The UBS Conference

In the UBS Australasia Conference, TECHNOLOGY ONE LIMITED (ASX: TNE) presents the background of the company, TechnologyOne as a SaaS company, about its uniqueness as well as its long-term outlook. The company highlighted that it was formed in the year 1987 and it has 14 international offices in the regions of Australia, New Zealand, South Pacific, Asia, and the United Kingdom. It has around 1000+ employees across all its branches. It has the largest R&D center in Australia with more than 300+ employees. It has a track record of making a continuous profit over the past 26 years. The company is associated with 1200+ high profile enterprise customers.

The company highlights about its financials to be very strong. At present, the company has cash and cash equivalent worth $93.4 million. The company maintains a strong leverage as the debt-equity percentage is 0.01%. Since 1996, the company has a 22 years record of paying the dividends annually and the company is making a continuous profit. The company also has a strong cash flow. The customer retention of the company is 99%. In every 5 years of duration, it is seen that the company’s financials have doubled in size. At present, the company is associated with 340+ enterprise customers TechnologyOne SaaS. Now the company is targeting 1000 enterprise customers to get associated with them by the end of 2022.

The company claims itself to be a successful SAAS company. All its business is based on SAAS. Also, it expects that the company will have $180+ million in annual recurring revenue (ARR). In FY2019, the company will adopt AASB15 for stronger SaaS revenue recognition and a better business. In this the company will focus on the revenues that will be recognized on a daily basis, free cash flow does not change, there will be minimal impact on the profit & loss statement, build simple revenue models, improve predictability of earnings.

At present the ARR is growing at the rate of 20% per annum. There are certain key functions which make the company unique from its competitors. They deliver deep functionality for the market they serve. These include local government bodies, education, government bodies, health and community services, financial services and corporates. The company follows one global code line “Massive economies of scale”. The economy of scale means Massively scalable, highly efficient, Cost effective. The company is also moving at ahead at an incredible pace of innovation in terms of SaaS. The company always tries that its SaaS customers are always on the latest release with new features, new functionalities, a frequent bug is being fixed with no extra cost taken from the customers.

The foundation of the company is its strong customer base. By 2027, the company projects that their customer base is going to increase the ARR by $420 million. The company is continuing its growth in the APAC region’s local government bodies, Education, Government, Health & Community Services, Asset & Project Intensive Industries as well as Financial Services & Corporates. It is also continuing its growth in the UK which has a 3 times larger market than Australia. At present, the market price of the share is A$5.88 (AEST: 3:23 pm) with the market capitalization of A$1.85 billion and PE ratio of 41.110x.


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