Objective Corporation halves profits in FY2010

FY2011 outlook better for the collaboration and content software provider

Objective Corporation (ASX:OCL) has seen a halving of its 2010 financial year profits off the back of a strong Australian dollar and soft software sales in New Zealand and the UK.

The public sector content, collaboration and process management solutions specialist recorded a net profit of $2.1 million for the year to 31 June 2010, down 51.3 per cent on 2009’s $4.3 million result.

The company also recorded revenues of $41.5 million, up three per cent, for the year to 30 June 2010. Earnings per share also halved to 1.7 cents, down from 3.3 cents in the 2009 financial year.

In an ASX statement, chief executive, Tony Walls, said government reorganisations, expenditure review committees, UK elections and a cautious predisposition to delay projects had contributed to the decline in profits in the past year.

“Additionally, united Kingdom and New Zealand revenues and earnings were negatively impacted by the relative strength of the Australian dollar,” Walls said.

Domestically, the company said the reorganisation of some state government departments, particularly in NSW, has negatively affected the company.

“On a appositive note, our proactive engagement model with customers and strong understanding of their needs returned real benefits,” the ASX statement reads.

“During the year we delivered outcomes that provided financial, social and political return on investment for the public sector.”

During the year, the company signed a $10 million, five year, extension to its current deal with Defence..

It also scored a content, collaboration and process management deal with the Port Kembla Port Corporation, and an expanded records management rollout with Queensland Police Service.

The company has also delivered projects for Queensland Police and Origin Energy and had also launched its software as a service offering in the Asia Pacific.

In addition, the company finalised its acquisition of UK-headquartered virtual collaboration provider Limehouse Software.

Looking ahead, Walls said the company was likely to improve its profit line thanks to governments around the globe increasing their focus on efficiency, transparency and lower cost service delivery models.

“Whilst public sector budgets are under pressure, Objective is well positioned to capitalise on these market drivers which we believe will deliver positive results for us,” he said.

The company said it continued to consider strategic acquisition opportunities that would add to its existing capabilities and provide opportunities for all its stakeholders.

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