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Tough market conditions continue, but Tech One to deliver growth

  • 31 October, 2003 15:37

<p>At Technology One’s Annual General Meeting today, Chairman Adrian Di Marco said he did not expect market conditions to improve until the 2005 financial year. Despite this, the company’s recent restructure, which delivered profit and loss responsibility at a regional level, should see Technology One deliver growth in the current year. Trading for the first quarter supports this outlook.</p>
<p>“The company has a very clear strategy in place, which includes the release in 2004 of its next generation of software, called the Connected Intelligence (CI) series. This will go far beyond the current boundaries of traditional client server or HTML-based internet applications and will underpin the next stage of the company’s growth,” Mr Di Marco said</p>
<p>“Our strategy over the past few years has been in contrast to our competitors, who have significantly reduced research and development (R&amp;D) and embarked on an aggressive program of acquisitions, leading to consolidation in the market,” he said.</p>
<p>“There is no evidence to suggest that acquisitions of overlapping products are in the interest of customers or investors, as the key to the long term success of a software company is its people and its culture, which inevitably suffer after such an acquisition.</p>
<p>“Technology One’s strategy has been to specifically avoid acquisitions of overlapping products, and to continue to invest heavily in R&amp;D throughout the tech stock crash, which has enabled us to take a clear product leadership position in our market.”</p>
<p>Future growth is also expected to be underpinned by capitalisation on an emerging phenomena, which Mr Di Marco calls ‘Buyers Revenge’. As a result of the Y2K boom, software vendors over promised and under delivered, resulting in customer dissatisfaction, and clients who are now looking to replace their systems.</p>
<p>“The name of the game in the next five years will be retention of customers - those companies that have continually delivered strong products and good customer service to keep their customers happy, and those that haven’t,” Mr Di Marco said.</p>
<p>“As Technology One has implemented a unique, customer-centric business model, and is the only ERP vendor who develops and then markets, sells, implements and supports its products, we will ensure we retain our customers, and win new business from our competitors who have over promised, and under delivered.”</p>
<p>Technology One is already realising the potential of the ‘Buyers Revenge’ trend. In 2003, the company replaced SAP at the Wollongong City Council, and Oracle at the Environmental Protection Agency in Victoria and at the Wodonga Rural Council.</p>
<p>Summary of 2003 Financial Year Performance
“Technology One has performed well in a very difficult market, due to continuing strong demand for its products and services, including 46 contracts with new clients signed in the 2003 financial year,” Mr Di Marco said.</p>
<p>Highlights of the 2003 Financial Year:
·Net Operating Cash Flows of $9.56 million, up 40%
·EBITDAR* of $20.01 million, down 7 percent
·Revenue** of $ 47.44 million, up 2 percent
·R&amp;D Expenditure (fully expensed) of $9.3 million, up 14% and representing 20% of Revenue**
·Net Profit Before Tax of $10.1 million, down 21 percent
·Earnings Per Share of 2.30 cents, down 17 percent
·Dividend Per Share of 2.50 cents, up 25 percent
·Net Profit After tax of $7.03 million, down 20 percent
*Earnings before interest, tax, depreciation, amortisation and R&amp;D, ** Revenue excluding interest</p>
<p>The slides from the AGM and the full annual report are now available in the Investor Relations section of the Technology One website - www.TechnologyOneCorp.com <http:></http:></p>
<p>About Technology One
Technology One is one of Australia’s largest publicly listed software companies. Its focus is the design, development, implementation and support of powerful, enterprise wide software applications using Client Server, Internet and eBusiness technologies for the corporate and government sectors.</p>
<p>In particular, Technology One delivers totally integrated, powerful enterprise solutions developed to meet the specific requirements of vertical markets, including: Financial Management and Accounting (Finance One), Higher Education and Universities (Student One), Retail (Retail One), Wholesale and Distribution (Sales One), Human Resource Management (People One), Local Government (Proclaim One)</p>
<p>Technology One also provides large scale, fixed time, fixed price custom software development services through its Project Services Group to meet the exact requirements of a specific customer, using Internet, eBusiness and Client Server technologies. Technology One employs approximately 300 staff in Australia, New Zealand and Malaysia.</p>
<p>Contact Details
Adrian Di Marco, Executive Chairman, Technology One
Phone (07) 3377 7300</p>
<p>Stephanie Wilson, Public Relations Consultant, Technology One
Phone (07) 3377 7518, Mobile 0405 133 871</p>

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