Objective Corp share price rockets to record high on strong FY 2020 result and positive outlook

The Objective Corporation Limited (ASX:OCL) share price stormed to a record high this afternoon after revealing a strong FY 2020 result and positive outlook…

| More on:
Chalk-drawn rocket shown blasting off into space

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Objective Corporation Limited (ASX: OCL) share price has been a very strong performer on Wednesday.

In late afternoon trade the content, collaboration, and process management software solutions company's shares are up 11% to a record high of $12.20.

How did Objective Corp perform in FY 2020?

As you might have guessed from the positive share price reaction, Objective Corp was a strong performer in FY 2020.

For the 12 months ended 30 June 2020, the company reported group revenue growth of 13% to $70 million.

Approximately 75% of this revenue is now classed as recurring, up from 70% a year earlier. Annualised recurring revenue (ARR) now stands at $56.6 million, up 22% from $46.6 million a year earlier.

This was driven by strong ARR growth across all its core subscription software products. This includes the doubling of ECMaaS ARR, a 34% lift in Connect ARR, a 51% increase in Trapeze ARR, a 49% jump in AlphaOne ARR, and an 8% increase in Keystone ARR.

Pleasingly, although its cost base has increased following a series of acquisitions, it didn't stop the company's margins from expanding.

This led to Objective Corp delivering a 22% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $17.2 million and a 22% lift in net profit after tax to $11 million.

Also growing strongly was its operating cash flow, which lifted 24.8% to $29.2 million. This ultimately led to the company finishing the period with a healthy cash balance of $51 million with no external borrowings.

In light of this result and its strong balance sheet, the Objective Corp board declared a fully franked 7 cents per share dividend.

Management commentary.

Objective Corporation's CEO, Tony Walls, commented: "In FY2020 we successfully met the challenges we were presented; those that we had expected and those that demanded we change course and address immediately."

"In this unprecedented environment, our business delivered a strong financial performance with 13% revenue growth, 22% growth in EBITDA and 22% growth in ARR. The results reflect our uncompromised commitment to transitioning our business to subscription-based revenue models and growing our annual recurring revenue base," he added.

Outlook.

The good news is that the company is expecting more of the same in FY 2021.

Mr Walls said: "In FY2021, we expect a material lift in revenue and profitability. We will extend our market reach with increased global digital marketing capacity and invest further in broadening our offerings to every customer."

"Further we continue to seek opportunities to introduce new, strategically aligned products through acquisition where these can be acquired at reasonable valuations," he concluded.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Objective Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Dimerix, Newmont, Regal Partners, and Titomic shares are storming higher

These shares are having a good finish to the week. Let's see why.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Fortescue, Lynas, PEXA, and Regis Healthcare shares are charging higher

These shares are having a strong session on Thursday. But why?

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Why Capricorn Metals, Insignia, Perseus Mining, and Qoria shares are storming higher

These shares are having a strong session on Tuesday. But why?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Amaero, AMP, Block, and South32 shares are racing higher today

These shares are starting the week on a positive note. But why?

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another momentous session for ASX shares this Friday.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why BHP, Catalyst Metals, Mesoblast, and Pilbara Minerals shares are shooting higher

These shares are ending the week with a bang. But why?

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

The Mesoblast share price just rocketed 38%! Here's why

ASX investors just sent the Mesoblast share price up 38%. But why?

Read more »