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Objective (ASX:OCL) share price continues its rise in 2021 after doubling last year

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The Objective Corporation Limited (ASX: OCL) share price wasted no time in 2021 proving that its performance last year wasn’t just a one-off aberration.

Since the start of trading in 2021, the Objective share price has risen by more than 12%. This occurred after the share price doubling in 2020, which put it into the list of top performers in the ASX SaaS shares sector.

Shares in this $1.2 billion software company have continued to outperform its peers in 2021. In comparison, the Altium Limited (ASX: ALU) share price is down by 12% on a year-to-date (YTD) basis, while the TechnologyOne Limited (ASX: TNE) share price has dropped 5% YTD.

So what’s been boosting the Objective share price?

Solid sales performance

During FY20, the company saw fast growth for its product, the Objective GOV365. This is a governance product for Microsoft Teams, which grew from 20 million to 75 million daily users in 2020.

As a result, for the 12 months ending 30 June 2020, the company reported revenue growth of 13% to $70 million – with 75% of this revenue classed as recurring.

The company followed up by issuing an upbeat guidance for FY21. At its annual general meeting (AGM) in November, Objective said it expected material growth in revenue and profitability in FY21. It did not, however, provide any figures.

The company also said it planned to do this by making efforts to target a broader customer base with cross-sell opportunities, as well as transitioning customers into subscription-based contracts.

The company also outlined its long term strategy of investing 20% or more of its revenue into research and development and expanding its global footprint by executing the right acquisition opportunities in 2021.

Why the strong demand for its products

The company’s products are tailored towards the use by government agencies. Recently, they benefitted from the COVID-19 pandemic, which forced governments to spend on governance-related software to control the transition into online work.

Objective also owns a suite of software that streamlines efficiencies across work activities. Its core offerings include the Objective ECM (Enterprise Content Management), Objective GOV365, Objective Perform, and Objective Trapeze.

All these products help government organisations to transition away from paper-based work into doing things digitally.

For example, Objective Trapeze helps surveyors approve digital plans, and Objective Connect helps government officials to share files securely across other departments.

At the time of writing, the Objective share price is down by 1.76% to $12.87.

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Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Objective Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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