Software solutions provider, TechnologyOne (ASX:TNE) is expecting pre-tax profits to reach at least $6.4 million in its preliminary for the half-year to March 31.
This will represent about a 30 per cent increase on the previous corresponding period.
In a statement, TechnologyOne executive chairman, Adrian Di Marco, attributed the first half results to an increase in license fees and other revenue, coupled with cost control initiatives.
“Given the operating leverage that exists in our business, this had had the impact of driving up our first half profits substantially,” he said.
Di Marco said the operating environment remained challenging. The company continued to see aggressive tactics from its competitors, delayed decisions, and contract negotiations taking much longer to complete.
“In such an environment it is important to note that we are not losing business to our competitors, in fact, we’re actually winning a greater share than in the past, as customers look for ways to improve their efficiencies and challenge existing supplier arrangements,” he said. “ For us the biggest challenge in the last 12 months has been contract delays in a more cautious and risk averse market.”
“Clearly our first half-year result has been very strong but we don’t necessarily expect the strong profit momentum in the first half to continue into the second half,” he said. “Over the full year, the company remains on track to deliver continuing profit and revenue growth.”
Contract wins for the first half including Skills Victoria, which will implement its Connected Intelligence Student Management solution across 13 TAFE institutes in Victoria.