Diligent's June quarter sales almost triple

BUSINESSDESK: Software company Diligent Board Member Services' sales momentum continued in the June quarter, in which it says it made an operating profit for a fourth successive quarter.

Second-quarter sales nearly tripled to $US10.1 million in the three months ended June compared to $US3.7 million in the same quarter last year, the company said. That took first-half sales to $US18.3 million, up from $US6.6 million last year.

The software-as-a-service (Saas) company said it added 216 new clients in the latest quarter, up from 133 in the same three months last year

“Sales momentum in Australia, in particular, was gratifying as Diligent added 12 ASX companies to its client list,” it said.

The company now counts 224 Fortune 1000 companies as clients, with 35 of them added in the June quarter, as well as 30% of companies within Britain's FTSE 100 index, it said.

Client retention on a trailing 12-month basis was 97%, while client upgrades of $US1.4 million in the June quarter were up more than five-fold on the June quarter last year.

Diligent said its continuing profitability on an operating basis “highlights the financial leverage” of its Saas business model and further evidence of its operational and financial strength was shown in the $US5 million increase in cashflow in the latest quarter, which took cash at June 30 to $US17.2 million.

Annualised recurring sales at June 30 reached $US39.2 million, up from $US14.9 million a year earlier – “dramatic top line growth by any standard”, the company said.

“Most importantly, Diligent's senior management continues to deliver on both profitability and revenue growth.

“Diligent's management expects the positive trends in cashflow and improved balance sheet strength and flexibility to continue throughout 2012.”

Shares closed yesterday at $3.92, just below their record $3.97, and were being bid higher.

That is a long way from the year low of $1.02 and as low as 7 cents in March 2009, when the company's future looked doubtful.