Tech One announces record profit

ASX-listed Australian financial software outfit Technology One said it would report a record net profit before tax of $13.1 million on sales revenue of just over $50 million for its year ending 30 June.

The profit was a 30 percent jump over the previous financial year with the company adding a whopping 74 customers to its books during the year.

Tech One boss, Adrian Di Marco, claimed the result was achieved following a company restructure in July last year and an improvement in market conditions.

The restructure involved the company 'decentralising' its operation giving state-based managers the power to drive sales and service in their states.

"Activity is starting to pickup I think in the mid-market sector," said Di Marco.

He claimed that the company doesn't see the likes of SAP and Oracle -- which have recently targeted the SME market via channel partners -- as competitors in the mid-market.

"SAP.........we've seen them around, but we don't see them as a strong competitor -- it's an old product,' he said.

He also claimed that the reseller model in the 'mid-market' is flawed. "The reseller model in the mid-sector doesn't lead to happy customers," he said, adding that mid-market customers are price conscious and won't pay a premium.

"These applications [the likes of SAP] are complex [and] they are sold at a price/point and they [customers] expect these things to work," he said.

He added that the reseller channel don't necessarily have the resources to ramp up service and support infrastructure in the mid-market if things go wrong.

Tech One had secured nine local government customers including Adelaide City Council, Campbelltown City Council, the City of Sydney, Launceston City Council and Warwick Shire Council.

In Asia, the company won five new contracts with Align Distribution, KUB Teleomunikasi, Kusani, Quanterm Logistics and WCT Construction.

The company also fully expensed $9.7 million into research and development, or 19 percent of its turnover.

One of the products under development was Finance One Connected Intelligence (CI), which is now available for limited release, the company said.
"This investment in our new generation products positions the company well for our next stage of growth," Di Marco said.

The company's results are to be reviewed and finalised by its auditors with official numbers to be released on 27 August, the company said.

Earlier this month, the company announced that Ron McLean, the executive responsible for day-to-day operations had quit to pursue other interests. As a result, the company expanded its executive team by promoting four long-term senior managers into operating officer roles.

These managers included Mark Culverson (NSW, VIC and ACT), Roger Phare (QLD, SA, WA, TAS and NT), Richley Down (operating officer, international business) and Peter Cameron (operating officer, project services).