Australia's TechnologyOne hits record high as profit rises on upbeat UK operations

TECHNOLOGY ONE

19/11/2024 01:50

Nov 19 (Reuters) - Shares of TechnologyOne  TNE.AX  surged to a record
high on Tuesday after the Australian enterprise software provider posted a
significant rise in annual profit, fuelled by strong growth in its UK
operations.    
    The stock soared as much as 12.4% to trade at A$30.070 per share, as of 0122
GMT. Shares emerged as top gainers in the benchmark index  .AXJO , which rose
0.8%.       
    The cloud service company posted a pre-tax annual profit of A$152.9 million
($99.34 million), up 18% on the previous corresponding period, and beat its
growth outlook of 12%-16%. 
    Visible Alpha, cited by Jefferies, had forecast fiscal 2024 profit before
tax of A$149 million. 
    Shares of TechnologyOne are poised for their best session since late-August
2006, if gains held.  
    TechnologyOne's profit jump was driven by strong growth in the UK business,
while its global software-as-as-service (SaaS) enterprise resource planning
solution added significant value for both new and existing customers, the
company said.
    The Brisbane-headquartered firm reported annual recurring revenue of A$470
million, a 20% year-on-year increase, and is on track to exceed A$500 million by
the end of fiscal 2025's first half. 
    "UK growth has shown continued strength, while the company's transition to
SaaS+ should ensure even greater earnings visibility going forward," Jefferies
analysts wrote in a client note.
    TechnologyOne updated its dividend policy, shifting from an 8%-10% growth
target to a payout ratio of 55%-65% to maximize shareholder returns, while
declaring an annual dividend of A$0.225 per share.




 (Reporting by Kumar Tanishk in Bengaluru; Editing by Sherry Jacob-Phillips)
 ((Tanishk.Kumar@thomsonreuters.com;))