TechnologyOne (ASX:TNE) posts record profit in 1HFY22

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TechnologyOne (ASX:TNE) posts record profit in 1HFY22

TechnologyOne Limited (ASX:TNE) shares
Image source: © Tashatuvango | Megapixl.com

Highlights

  • TechnologyOne has booked its 13th consecutive year of record first-half earnings.
  • The company’s SaaS ARR is up 44%, and profit after tax is 18%, driven by continued high demand for the TechnologyOne global SaaS ERP system.

Enterprise software company TechnologyOne Limited (ASX:TNE) has shared its financial results for the half-year ended 31 March 2022 on Tuesday (24 May 2022).

The company has booked its 13th consecutive year of record first-half earnings, with SaaS ARR up 44% and profit after tax up 18%, driven by continued high demand for the TechnologyOne global SaaS ERP system.

However, shares of TechnologyOne were trading 4.08% lower today at AU$9.99 per share on ASX at 11.17 AM AEST.

Despite the positive results, the company's shares were bleeding. This might be because of the overall ASX 200 Index, which was 0.23% down at 7,132.10 points at the same time. Moreover, IT was one of the worst performing sectors today, followed by telecommunications services, healthcare and industries.

A look at TechnologyOne’s 1HFY22 results

TechnologyOne's SaaS and Continuing Business currently generates AU$169.5 million in revenue for the half-year, up 21%, and accounts for 97% of our total revenue, marking a significant change from our old licence business.

Here are some highlights which are compared with the previous corresponding period.

Image Source: © 2022 Kalkine Media ®

Data Source- Company announcement dated 24 May 2022

TechnologyOne also announced a significant R&D investment in expanding the functionality and capabilities of its worldwide SaaS ERP solution, including the launch of a new Local Government - Digital Experience Platform (LG DXP).

TechnologyOne purchased Scientia in late calendar 2021 as a strategic addition to its ERP and accelerate higher education expansion in the UK and Australia.

Image Source: © 2022 Kalkine Media ®

Data Source- Company announcement dated 24 May 2022

Future Outlook

Chung stated, that the company is well-positioned to produce continued strong growth for the whole year, with net profit before tax growth of 10% to 15% over FY21. As TechnologyOne aggressively builds its SaaS business, it will continue to shrink its old licence fee business, down to around AU$12 million for the full year (from AU$18 million pcp).

Besides this, TechnologyOne will continue to invest in outstanding employees and new development opportunities. In long-term, the company expects substantial growth, fuelled by its worldwide SaaS ERP solution, greater product adoption by existing clients, new customers, and global expansion.

From a current base of AU$288 million, the company claims that it is on track to produce a total ARR of AU$500 million or more by FY26. Profit before tax margins will continue to grow to 35% due to its worldwide SaaS ERP solution's economies of scale.

Also Read: TechnologyOne (ASX:TNE) Profit up 19%, Revenue gains 9% in 2021

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