The Objective Corporation Limited (ASX: OCL) share price has been a very strong performer on Wednesday.
In late afternoon trade the content, collaboration, and process management software solutions company's shares are up 11% to a record high of $12.20.
How did Objective Corp perform in FY 2020?
As you might have guessed from the positive share price reaction, Objective Corp was a strong performer in FY 2020.
For the 12 months ended 30 June 2020, the company reported group revenue growth of 13% to $70 million.
Approximately 75% of this revenue is now classed as recurring, up from 70% a year earlier. Annualised recurring revenue (ARR) now stands at $56.6 million, up 22% from $46.6 million a year earlier.
This was driven by strong ARR growth across all its core subscription software products. This includes the doubling of ECMaaS ARR, a 34% lift in Connect ARR, a 51% increase in Trapeze ARR, a 49% jump in AlphaOne ARR, and an 8% increase in Keystone ARR.
Pleasingly, although its cost base has increased following a series of acquisitions, it didn't stop the company's margins from expanding.
This led to Objective Corp delivering a 22% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $17.2 million and a 22% lift in net profit after tax to $11 million.
Also growing strongly was its operating cash flow, which lifted 24.8% to $29.2 million. This ultimately led to the company finishing the period with a healthy cash balance of $51 million with no external borrowings.
In light of this result and its strong balance sheet, the Objective Corp board declared a fully franked 7 cents per share dividend.
Management commentary.
Objective Corporation's CEO, Tony Walls, commented: "In FY2020 we successfully met the challenges we were presented; those that we had expected and those that demanded we change course and address immediately."
"In this unprecedented environment, our business delivered a strong financial performance with 13% revenue growth, 22% growth in EBITDA and 22% growth in ARR. The results reflect our uncompromised commitment to transitioning our business to subscription-based revenue models and growing our annual recurring revenue base," he added.
Outlook.
The good news is that the company is expecting more of the same in FY 2021.
Mr Walls said: "In FY2021, we expect a material lift in revenue and profitability. We will extend our market reach with increased global digital marketing capacity and invest further in broadening our offerings to every customer."
"Further we continue to seek opportunities to introduce new, strategically aligned products through acquisition where these can be acquired at reasonable valuations," he concluded.
