Shares of Technology One Limited (ASX: TNE) have rocketed almost 11% higher today after the group announced its results for the full-year ended 30 September 2016. The shares were fetching $5.88, compared to a recent high of $6.17.
For those investors not familiar with Technology One's business, the company provides enterprise software for its customers with a particular focus on government clients, financial services and education.
Given how deeply integrated this product can become in its customers' businesses, this provides security for Technology One's revenue as its customers are less likely to switch to an alternative provider.
The company reported its 17th consecutive year of record revenues today, driven by its 'cloud first, mobile first' strategy. Revenue grew 14% for the year to $249 million, up from $218.7 million in financial year 2015, with net profit growing 16% to $41.3 million. That exceeded management's guidance for growth of between 10% and 15% for the year.
Commenting on the result, Technology One's Executive Chairman Adrian Di Marco said:
"We've experienced huge growth in SaaS, with our largest wins in 2016 all coming from SaaS… This growth is across all industries, from federal government to local government, education and financial services, which speaks volumes about the market shift towards a cloud first, mobile first world."
Interestingly, Di Marco also founded the business in 1987 and owned almost 34.4 million shares at the end of the year. This reflects the fact that his interests are very much aligned with regular shareholders. Non-executive director John Mactaggart also owned 45.9 million shares in the business.
Indeed, there is no doubt that Technology One is a quality business that has produced incredible returns for shareholders in the past. It isn't cheap, however, and investors who are prepared to be patient could receive a better price sometime down the track.
