Objective Corporation Limited (ASX: OCL) today announced revenue increased by 3.0% to $41.5 million for the year to 30 June 2010 (FY09: $40.3 million). The profit before amortisation and tax (PBAT) was $2.7 million, compared to $4.4 million in FY09. Net profit after tax (NPAT) for FY10 was $2.1 million.

European revenue grew 27.7% to $11.9 million (FY09: $9.3 million). Asia Pacific revenue was $28.6 million (FY09: $30.1 million). 

Objective’s balance sheet remains strong. At 30 June 2010, the company had $8.2 million in cash and cash equivalents, net of borrowings.

The Directors have declared an unfranked final dividend of 1.3 cents per share. 

Financial Summary

Results summary for year ended 30 June	FY2010 $m	FY2009 $m	Change (%)
Revenue	41.5	40.3	3.0
Profit before amortisation and tax	2.7	4.4	(38.7)
Net profit after tax	2.1	4.4	(51.3)
Asia Pacific Revenue	28.6	30.1	(4.7)
European Revenue	11.9	9.3	27.7
R&D (fully expensed)	9.4	9.6	(1.8)
Earnings per Share	1.7 cps	3.3 cps	(48.5)
Final dividend (unfranked)	1.3 cents	2.1 cents	(38.1)

Mr Tony Walls, CEO, Objective Corporation said: “FY10 has been challenging for enterprise software vendors globally. Government reorganisations, expenditure review committees, United Kingdom (UK) elections and a cautious predisposition to delay projects has impacted on operations. Subsequently, Objective has experienced softer software sales than anticipated. Additionally, United Kingdom and New Zealand revenue and earnings were negatively impacted by the relative strength of the Australian dollar.”

Operations

Asia Pacific

Asia Pacific operations performed below expectations. A contributing factor was the impact of the reorganisation of some state government departments, particularly in New South Wales.

On a positive note, our proactive engagement model with customers and strong understanding of their needs returned real benefits. During the year we delivered outcomes that provided financial, social and political return on investment for the public sector.  

This is further evidenced by our recent announcement on the extension of our long-term agreement with the Australian Defence organisation. The agreement includes additional capabilities and support of Defence’s existing Objective implementation. Objective is working closely with Defence to upgrade its current software to Objective 7.5.

We have had a high level of successful project outcomes for customers as a result of our service excellence. These customers include: Department of Building and Housing New Zealand, Queensland Police, Origin Energy, Port Kembla Ports Corporation and the Legal Practice Board, Health Corporate Network and Anvil Mining in Western Australia.

FY10 saw the successful launch of our software-as-a-service solutions in Asia Pacific. The uCreate, uEngage and ePetition solutions enable public sector organisations to streamline the collaboration and development process of policy and other documents. Launching these solutions into the Asia Pacific market broadens Objective’s portfolio of products that meet specific needs for the public sector. We anticipate that we will see the financial benefits from this in the coming year. 

Europe and United States

European and United States operations delivered a profitable year despite a large number of one-off costs associated with the Limehouse Software acquisition and UK governments mandating operating expenditure savings. 

The business integration of Limehouse Software has now reached its conclusion. We are very satisfied with the strategic benefits from the acquisition. Objective has grown market share and is leveraging its deep domain expertise in collaborative content creation, publishing and stakeholder consultation.

During the course of the year, the company invested to mature underpinning technology, develop new capabilities and create a series of new web based applications for the benefit of the public sector.

This investment has paid dividends for our customers. Wyre Borough Council was commended during the year for its public consultation uEngage portal from the Society of Information Technology Management (Socitm), the membership association for all UK IT professionals working in local public sector authorities.

We have strengthened our footprint in Europe and the United States with a number of new customer contracts signed including: Durham County Council, Southampton City Council, Hampshire County Council, Portsmouth City Council and State of Hawaii’s Community Development Authority.

Research and Development

Objective is well respected for its substantial investment in research and development. Fully expensed research and development in FY10 was 23% of revenue. As a direct result of this investment, the company will release an unprecedented number of new and upgraded solutions during FY11.

Outlook

Mr Walls said: “Objective is committed to returning a higher rate of growth in the period ahead. Governments globally are increasing their focus on efficiency, transparency and delivering better services to the community at a lower cost. 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. We remain cautiously optimistic for the year ahead.”

“Our focus on all levels of public sector continues to drive our business strategy. Throughout the year we have made a number of strategic investments across many facets of our business including research and development, product innovation, service delivery and operational capacity. 

“This investment combined with our increasing intimacy with our market creates a strong base for growth in the coming year. We are well placed to grow our share of targeted markets and continue to deliver high quality solutions that result in valuable outcomes for our customers.” 

The company continues to consider strategic acquisition opportunities that will add to our existing capabilities and provide opportunities for all stakeholders.

The board and management of Objective Corporation would like to thank the company’s customers, staff and shareholders, for their commitment and valuable contribution to the ongoing success of the company.