Enterprise software and services company TechnologyOne (ASX:TNE) has reported a 28.9% increase in net profit for the half-year ended in March.
The company earned a profit of $7.4 million, from 20.9% higher revenue of $71.6 million. Pre-tax profit grew by $2.2 million to $9.1 million.
In its first-half results, the company said it achieved the growth despite a $6.8 million impact from investments in areas including its new Solutions group and its UK business.
Revenue from initial licenses sales grew 10% to $15.6 million, with annual license fees increasing by 16% to $21.8 million.
Consulting services revenue also grew 5% to $19.6 million, while the contribution from the TechnologyOne Plus project services department increased 82% to $10.3 million.
But total expenses rose 19% to $62.5 million, with R&D expenses up 17% to $14.9 million as a result of the opening of a new Brisbane R&D centre in the second half of FY10.
Total R&D spend represented 21% of revenue - above the company's usual 18% target.
TechnologyOne is nevertheless also exploring opening another R&D centre offshore. The company will conduct a 6-12 month trial program to test the offshore R&D centre concept.
TechnologyOne is now forecasting a 10-15% increase in profit after tax for the full year, but said it expects expenses to be up by around 14% on the prior year.
TNE shares grew 4.76% in Monday's trading to $1.100.