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Technology One profit jumps 16pct

AAP logoAAP 22/11/2016 Petrina Berry

Business software provider Technology One says it has beaten a number of multinational rivals to score major contracts after unveiling a strong rise in annual profit.

The Brisbane-based company, which creates and manages purpose-built software for government, financial, health, education and utility companies, booked a 16 per cent rise in net profit to $41.3 million for the year to September 30.

Shares in Technology One soared on the result to close 59 cents, or 11.1 per cent higher at $5.89 on Tuesday.

The group's revenue climbed 14 per cent to $249 million, driven by its Software as a Service (SaaS) licensed software business.

TAFE Queensland, La Trobe University, the University of Dundee and the UK's Leicester City Council were among new major enterprise customers to sign up with Technology One during 2015/16.

The company said its products and service continue to win against large multinational competitors.

"This year we added more than 60 major new corporate customers to our expanding customer base," the company said in a report.

"Of these new customers, 12 of them were for the replacement of our competitors' systems including systems from Oracle, SAP, Microsoft."

The group's cloud business, TechnologyOne Cloud made a $2.2 million loss for 2015/16, largely due to investment in building the product.

The company said it had originally expected its cloud business to break even in the 2017 financial year but it now expects it will make a $1 million profit.

"We've experienced huge growth in SaaS, with our largest wins in 2016 all coming from SaaS," executive chairman Adrian Di Marco said.

"This growth is across all industries, from federal government to local government, education and financial services, which speaks volumes about the market shift towards a cloud first, mobile first world."

The company has been operating for 29 years and first listed on the Australian share market in December, 1999.

TECHNOLOGY ONE FULL-YEAR RESULTS:

* Net profit up 16 per cent to $41.34 million

* Revenue rose 14 per cent to $249 million

* Final dividend of 5.09 cents, up from 4.63 cents.

* Special dividend of $2 unchanged from 2014/15

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