A record level of recurring revenues combined with strong growth within the software-as-a-service (SaaS) sector led towards a revenue increase of 5.5 per cent to $49.1 million for the six months ending 31 December for Canberra-based Citadel Group.
During the first half of FY19, Citadel signed additional SaaS contracts across key verticals such as government, national security and defence, health and education.
The ASX-listed company’s CEO, Darren Stanley, said it had successfully transitioned its sales focus towards scalable solutions that provide annuity revenue streams, followed by an increased investment in SaaS platform development.
“Our customer base continues to expand across each of our key verticals, as we scale out SaaS solutions, notably Citadel-IX, our virtual responder application for citizen safety, and our suite of e-health solutions," Stanley told shareholders. “We now have in excess of 265,000 users across software and managed solutions, which we expect to significantly scale in the coming years.
“The investments we made to develop secure cloud-based software solutions led to a direct increase in SaaS revenue from new client wins and cross-selling opportunities.”
SaaS revenue grew 39.1 per cent to $16.8 million, while net profit from continuing operations grew 5.4 per cent to $6.7 million.
Some of the new customer wins include a nine-year deal with the Queensland Department of Transport and Main Roads to provide a secure, hosted managed service for the Electronic Development Application Management (eDAM) system, hosted on its Citadel-IX platform.
Citadel also secured a international client and a key government department pilot for Citadel-IX with further plans to extend it across 25,000 users.
Furthermore, the company landed a deal with the City of Yarra for electronic document and records management system (eDRMS) service, spanning 1,500 users as well as a further five-year eDRMS support deal with another government client with 1,500 seats also featuring a pilot migration program for Citadel-IX.
Citadel also developed a automated crime reporting tool, vResponder for Crime Stoppers.
A five-year contract was also inked with Queensland Health for a chemotherapy management information system (CHARM) as well as new CHARM oncology implementations with John Hunter Hospital, Slade Pharmacies, Prince of Wales Private Hospital and St Vincent’s Hospital.
It also secured a two-year extension deal providing managed services to Monash University.
“We have transformed Citadel from a business providing specialist advisory, training and technology services to government departments, to an innovative Australian technology company providing a comprehensive suite of enterprise information management SaaS solutions being scaled to both government and private sectors,” Stanley said.
Stanley added that its recent acquisition of Gruden provided access to additional government and telco panels and a new procurement-as-a-service offering.
“With strong client relationships across key verticals, we are benefiting from cross-selling developed and acquired products to our existing clients to enhance their operations. At the same time, we are utilising channel and reseller partners to help us rapidly scale our SaaS sales,” he said.
“We are confident of the outlook for the remainder of FY19 and beyond. In addition to our largest ever weighted pipeline that stands at $132 million, our SaaS recurring revenue model will allow us to grow and scale through shorter sales cycles, reduce client concentration and deliver larger numbers of new clients.”
In the meantime, Citadel co-founder, Miles Jakeman, has stepped down as director of the company. Jakeman along with his wife, Le-Anne, co-founded Citadel and during his tenure he led company through its IPO, listing on the ASX and driving its growth during the past four years.
“I have been extremely fortunate to have worked with such a great team of people, and am delighted to have seen Citadel grow from a specialist consulting and education provider into a leading software company providing services to government, health, education and enterprise clients,” Jakeman said.
“With the Company performing strongly and an excellent executive team in place, the time is now right to pursue other directorships and business interests.”