TechnologyOne opens new R&D centre, posts strong profit

ASX-listed TechnologyOne has opened a new research and development facility in Brisbane, consolidating its three Brisbane offices into one. 

TechnologyOne executive chairman Adrian Di Marco said the $12 million fit out was "designed to improve collaboration and innovation" for the company's 350 plus software developers.

"Our facilities need to be at the cutting edge to attract and retain the best IT talent in the country and to compete effectively in the global software market," he said.

Di Marco said the move to the new R&D centre would allow the company to commence the development of its next generation of enterprise software.

"At a projected cost of $120 million, the project - codenamed "Next Gen" - will embrace leading edge concepts and emerging start-of-the-art technologies," he said.

Meanwhile, TechnologyOne has posted a strong profit report for the half-year ending 31 March, 2010.

The enterprise software provider reported $6.9 million in net profit before tax, a 38 percent increase over the previous corresponding period.

Net profit after tax was up 47 percent to $5.7 million.

Overall revenue was up 6 percent to $59.2 million with the strongest revenue stream being the TechnologyOne Project Services (Plus), up 24 percent and contributing $5.7 million to revenue.

Initial licence fee business grew by 6 percent, contributing $14.1 million; revenue from annual licences business was up 15 percent to $18.8 million, while revenue from consulting services fees down 4 percent.

Di Marco told CRN that business intelligence was a key driver to the licensing business growth.

Di Marco said the results are "especially pleasing" despite investment in the new UK office which contributed a loss of $1.1 million; CRM product development and research and development.

Di Marco told CRN he expected the UK business to perform better next year.

During the recent slowdown, Di Marco said TechnologyOne contained growth of costs but retained its team of "highly skilled staff".

"By retaining our staff we were able to continue our strategic projects to completion and this now places us in a strong position as the economy improves," he said.

In the half year, TechnologyOne signed new customers in all seven of its key vertical markets in recent months, the company said.

New customers included the High Court of Australia, Burwood Council and Moonee Valley City Council and Newcastle Aiport.

Di Marco said he expects profit to grow by 10 to 15 percent for the full year results.