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Diligent first quarter profit jumps 58% as sales increase 40%

Diligent Board Member Services [NZX: DIL], the governance app maker which was forced to restate its financial statements, posted a 58 percent rise in first quarter profit as it increased the number of Diligent Boardbooks users.

Profit jumped to US$1.94 million in the three months ended March 31, from US$1.23 million a year earlier, the New York-based and locally listed company said in a statement. First quarter sales rose 40 percent to US$19.1 million, and second quarter sales are expected to rise as much as 28 percent to between US$19.7 million and US$20 million, it said.

Diligent said today it expects full-year sales will rise as much as 27 percent to between US$80.5 million to US$82 million. In the latest quarter, the number of Diligent Boardbooks users increased by about 4,500 to more than 77,100. American sales represented 71 percent of total revenue, with Europe, Middle East and Africa accounting for 21 percent and Asia/Pacific at 7 percent.

"The first quarter was a solid start to 2014," chief executive Alessandro Sodi said in the statement. "Our performance reflects continued global demand for our Boardbooks product."

The shares rose 2.6 percent to $4.69 and have gained 20 percent this year.

The company said its revenue retention rate exceeded 95 percent in the latest quarter.

In April, Diligent said new customer growth slowed, with a net 113 new client agreements in the three months ended March 31, taking its total number of customers to 2,563. That's up 28 percent from a year earlier, though the pace of new additions shrank from 201 in the first quarter of 2013.

The company is emerging from protracted administrative errors that forced it to restate its accounts for the 2010 through 2013 financial years after incorrectly recognising revenue, having also had to backtrack after granting too many options to Sodi.

(BusinessDesk)