TechnologyOne shares were harshly dealt with yesterday after it shocked the market with an almost halving in its profit growth rate for 2016-17.
The shares fell more than 12% at one stage yesterday and ended the day down 10.7% at $4.52.
Investors didn’t like the profit downgrade from the Brisbane-based software and services firm.
The firm cut its full year profit growth guidance range to 7% to 9% for 2017, down from a previous guidance range of to 10% to 15%.
The company releases its results on November 21.
TechnologyOne CEO Edward Chung said that the profit downgrade was due to a slower-than-expected return to profitability in the company’s consulting business.
The consulting business is now expected to post a profit of $5.4 million, a drop $4.3 million from 2015-16.
“We had expected that we could substantially overcome this shortfall but unfortunately a number of significant deals for which we are preferred and for which contracts have been negotiated have not been able to be closed by year end," Mr Chung siad.
Chairman and long time CEO, Adrian Di Marco said yesterday
"TechnologyOne’s cloud business has continued to grow strongly. Cloud profit was up more than 200 per cent and the company’s overall expected result, excluding significant events, is for underlying profit to be approximately 20 per cent higher."
