Profit growth looks solid on paper yet investors are not thrilled. Net profit after tax rises 6% to $66.8m in the six months to March 31 while annual recurring revenue jumps 17% to $598m.
New contracts with councils and universities, especially in the UK, fuel much of that momentum. Despite the growth, the market reaction is cool.
The company’s shares slide 2.9% on Tuesday, dragging its market value to about $9.1bn. That move runs against a roughly 1% gain across the broader share market.
Pre-tax profit climbs 9% to $89.1m but it still undershoots Bloomberg’s consensus forecast of $91.2m. Investors focus less on the growth rate and more on the gap to expectations.
Underlying demand for the product remains tied to everyday services. The company builds enterprise resource planning software used by councils, schools, universities, hospitals and government agencies to run core processes.
Many planning approvals, such as a new backyard pool or home extension, often flow through its systems. That kind of embedded role inside public institutions helps explain its strong recurring revenue base.
