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Brisbane-based TechnologyOne (ASX: TNE) has reported 1H19 profits before tax up 130 per cent on the back of higher value annual software as a service (SaaS) contracts.
Net profit before tax at the end of the first half was up 130 per cent to $24.5 million, with profit attributable to members up 119 per cent to $17.9 million.
Revenue was also up by 5 per cent to $129.3 million, and the company has declared a dividend of 3.15 cents per share (up 10 per cent).
The company says the record profit was driven by record SaaS fees, putting it on target to deliver full year net profit before tax between $71.6 million and $76.3 million.
"Today, TechnologyOne is a successful SaaS company," says CEO Edward Chung (pictured).
"Our results clearly show we have a strong SaaS growth engine."
During the half SaaS fees were up 42 per cent to $37.5 million, and the number of large-scale enterprise SaaS customers were up to 389 (compared to 280 at the same time in 2018).
"These customers have hundreds of thousands of users, making ours the largest multi-tenanted enterprise resource planning (ERP) SaaS offering in Australia," says Chung.
The company has performed well in the local government sector with more than 300 council customers.
The group's UK expansion is tracking well, with the company reducing losses from that venture from $3.2 million to $900,000 for the half year.
"We will continue to grow quickly, and like we have in the past 32 years, we expect to double in size again in the next five years," says Chung.
The company has also hinted at a big announcement coming soon about the group's proper foray into machine learning and artificial intelligence.
Shares in TechnologyOne are down 9.94 per cent to $8.15 per share at 10.15am AEST.
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