Pinned straw:
Objective Corporation released their FY24 results this morning. From their presentation:
Overall a solid result headlined by a very strong cash flow compared to FY23. On my numbers FCF came in around $37.5m compared to $20m in FY23.
Remember that OCL changed their accounting policy to only expense 50% of R&D in the P&L which makes the comparison of NPAT between the 2 periods a bit misleading. However, on a like for like basis, I have NPAT using the old method of accounting of around $27.2m which is still 29% higher than FY23 ($21.1m).
In his letter to shareholders, CEO Tony Walls indicated that although they did not quite reach their targets of 15% growth in ARR, they were also more efficient in deployment of their services which in term lead to a decrease in costs. They attributed this miss to a softening in economic conditions in NZ. They do think that going forward, a 15% growth in ARR is the target.
Disc: Held IRL and on Strawman.
On the call the CEO said
- they are investing in R&D because the private equity is making acquisitions too expensive
- the ARR miss (11% vs target 15%) was because a lot of the big government deals slipped past the FY across the business. He couldn’t really explain why but said it was unusual. He thinks they will still close although they still haven’t as of today
Essentially steady as she goes IMHO