I think there are a number of factors at play. This has been a...

I think there are a number of factors at play. This has been a great result that shows how good a strategy the TNE has been working through over a number of years but experienced analysts will be looking at the following areas

• Most of the revenue has been flipping organisations from annual support and maintenance to SAAS fees. In many cases this has grown revenue per customer by 2 -4 times with significant consulting support for each flip. The issue is the sunset for this to happen is September 2024 and as each implementation takes at least 6 months but mostly more there are not many more left to flip. This has been the primary source of revenue growth (It has been great revenue growth though over the last number of years) and the better aspect is it has been recurring.
• The absence of new logos in their report. It is common knowledge that they have not won many new customers as a number of their markets are reasonable mature. They need to shift their business model from the relatively easy job of "flipping" customers to SAAS to the much more difficult job of acquiring customers from competitors.
• The UK coming to profitability has been great for the company, but they have been there for a lot of years and the numbers are largely immaterial to the company overall. It shows how difficult it is for an ERP company to establish in overseas markets.
• As per Appendix C R&D amortisation will grow as products that are capitalised get closer to 5 years. It only commenced in FY19 so it will grow substantially next year again.

The really positive aspects that analysts will love include:

• Strong Cashflow
• Big war-chest with over $200m to invest in acquisitions and a good criteria for investment.
• good dividends

This issue with the company is the market cap is now over $5b on a profit after tax of $102m. Is there enough growth left to justify the price as there is no question it is a well managed company that has had a great strategy.