Proactive Investors - Run By Investors For Investors

Objective Corporation downgrades earnings for FY2018, positioned for margin expansion

The company creates information and process governance software solutions.
stock market concept
Shares were off 19.2% to $2.90 intraday

Objective Corporation Ltd (ASX:OCL) had downgraded earnings for FY2018 and now expects them to be largely in line with last year’s results.

Based on unaudited management accounts as at June 30, 2018, revenue totalled $63.0 million (FY2017:$62.8 million) and EBITDA $10.5 million (FY2017: $10.4 million).

Transition to subscription-based revenue, cash flow strong

The company continues to focus on transitioning its customer contracts to subscription-based revenue, now accounting for 61% of total revenue.

Positively, cash flow from operations increased by 18% to $11.3 million representing 107% of EBITDA for the year.

This confirms good conversion of P&L earnings into cash alleviating working capital concerns.

Margin expansion expected in FY2019

The company is confident it can deliver significant margin expansion in FY2019 due to its R&D investment, operating leverage and transition to subscription revenue.

Objective also remains confident that the fundamental drivers of customer demand for its products has not changed.

Four business units

The company has four main business units, Objective ECM which accounts for the majority of revenue and earnings and Objective Keystone, Objective Connect, and Objective Trapeze.

ECM stands for enterprise content management and ECM software helps business manage their content such a digitalising documentation.

View full OCL profile View Profile

Objective Corporation Ltd Timeline

Related Articles

growth concept with stairs going upwards
October 26 2018
Patersons' price target of 95 cents implies significant upside to the share price.
marketing
September 18 2018
New business from the likes of Vodafone and GSK and a strong contribution from The Corner, which it acquired in December, meant revenues jumped 70% in the first half
1535732048_universal-mcloud--wind-turbines.jpg
September 01 2018
The tech group is increasingly expanding its geographical reach and gaining traction in China

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use