Jade continues growth with 36% revenue boost

A series of offshore deals powers top-line growth

Jade Software lifted revenue by 36% year-on-year for the first half of 2008. However, comparing profitabililty is difficult because of acquisitions and one-off gains from divestments.

Revenue from operations grew from $16.9 million in the first half of last year to $23.1 million in the six months to June 30. Growth was fuelled by two acquisitions during the second half of 2007 and organic growth from existing customers. The two acquisitions were Empower Masterpay, an Australian HR and payroll IT services company, and Methodware, a global supplier of governance, risk and compliance software.

The company says major new projects to go live in the first half included harbour and fleet management software for Rio Tinto, HR and payroll for Toll New Zealand, new rules engines for the NZ Electricity Commission, a new operating theatre system for the Department of Health and Families in Australia’s Northern Territory, train scheduling systems for Toronto’s Passenger Rail System, and governance, risk and compliance software for Royal Bank of Scotland.

Upgrades and extensions with existing customers included UK mortgage processor HomeLoan Management and health software company Ascribe, as well as HR and payroll solutions for the Department of Education in Tasmania and Bendigo Bank.

Over the past five years, Jade has boosted its revenue from $32.2 million for the year to June 30, 2004 to $45.5 million for the year to June 30, 2008.

“Last year we invested more than $12 million in acquisitions without recourse to debt or our shareholders. In the first half of this year we invested $2.3 million in software development, which was capitalised, and $1.8 million in software research and development, which was expensed; that’s over 17% of revenue for the period. In addition, we invested more than $2 million in marketing, sales and customer management.

“These accelerated levels of investment, one-off gains from divestments, and contributions from acquisitions make it difficult to compare profitability between the first half of 2008 and the comparable period in the prior year. While EBITDA fell from $6.7 million to $4.4 million for the half-year, EBITDA from continuing operations in the first half of 2008 was 19% ahead of the comparable period in 2007.

Carr says Jade's shareholders have left every cent in the business to fund growth and investment on research and development. Jade employs more than 340 people, two thirds of them in New Zealand.

75% of Jade's shares are held outside New Zealand, foreign investment that Carr says has "created stability, growth, investment and jobs". He says Jade has a full order book till the end of the year.”

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