Licence fees help Diligent sales across $5m mark

Sales grow 69 percent in 2009

NZX-listed software company Diligent Board Member Services says its 2009 calendar year sales crossed the $5 million mark, helped by record third and fourth-quarter licence fees.

Diligent shares shot 7c or 23 percent higher to close at 37c after the fourth-quarter update was released by the "paperless" host of corporate board paper information.

The firm — which has a software development arm in Christchurch with 12 staff — said 2009 net sales were up 69 percent from $2.95 million in calendar 2008.

Diligent's business model is to provide corporate board papers online to directors, executives and administrators.

For its fourth quarter ended December 31, Diligent reported net sales of US$1.54m (NZ$2.09m), up from US$0.87m in the previous corresponding quarter — growth of 78 per cent.

Chief executive Alex Sodi said Diligent had produced another record-breaking quarterly performance, with new or fresh annualised licence fees soaring to US$0.75m in the fourth quarter, surpassing the previous record of US$0.66m in 2009's third quarter.

Customers included Fortune 500 companies to non-profit organisations.

"To have back-to-back record-breaking quarters in the current worldwide economic environment demonstrates the strength and appeal to our potential clients of the Diligent Boardbooks offering," Sodi said.

When asked if Diligent was targeting sales growth in 2010 of a similar level to the 69 percent and 68 percent achieved in the previous two years, Sodi said the company had minimum growth targets: "If you look at our growth, we always look to improve," he said.

The company — with nine sales staff — had gained considerable traction since it began offering Boardbooks licences eight years ago.

Diligent had reached an agreement in principle for a US$1m line of credit from Spring Street Partners.

This would allow Diligent to implement new strategic directions - including the possibility of adding new sales personnel and initiating new marketing efforts.

Diligent sales staff also added 41 new licence agreements, up from the previous best quarterly result of 30 - added both in the third quarter of 2009 and the fourth quarter of 2008.

Diligent now had 284 worldwide clients and 7300 users of its Boardbooks products, Sodi said.

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