Shares in $1.65 billion enterprise software developer Technology One Limited (ASX: TNE) jumped around 4% on Tuesday after the group released its half year results to the market after the close of trade on Monday.
Here are the key takeaways from those results:
- Revenue grew 12% to $101 million
- Net profit before tax fell 1% to $9.4 million due to a 16% rise in total expenses
- The interim dividend was increased by 10% to 2.36 cents per share fully franked
- Guidance was provided for total expenses for the full year to come down dramatically
- The group reconfirmed profit growth of 10% to 15% for the full year
- Cloud service fees increased by over 100% on the prior year, with 21 new customers signing up for the group's cloud service
- Annual License fee growth of 15% was recorded in the half to $43.7 million
- Research and development expense increased by 13% to $21.8 million
Foolish takeaway
While many investors become enamoured with unprofitable but highly exciting technology growth stories such as cloud computing newcomer XERO FPO NZX (ASX: XRO), Technology One's business which is highly profitable and can boast of a track record of continuously paying a dividend since it listed in 1999 remains under the radar.
The quality of Technology One's business has translated into superb share price performance. Over the past decade the stock has gained around 700% compared with a rise of just 4% in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
