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