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Diligent sees growing importance in European sales

Tuesday 16th April 2013

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Diligent Board Member Services sees major growth opportunities in Europe where companies haven't jumped on to the Boardbooks bandwagon, but still hasn't decided what to do with its growing pile of cash.

The New York-based firm, whose software helps company directors manage corporate governance information flows, lifted sales 84 percent to US$15.1 million in the three months ended March 31, with the fastest revenue growth in the Asia/Pacific region, where revenue surged 368 percent to US$1.1 million, followed by Europe, Middle East and Africa, up 127 percent to US$2.7 million

Chief executive Alex Sodi told a briefing that Europe has grown to 18 percent of its sales from 14 percent, and will become a lynchpin for future growth. Sales in the Americas, which grew 67 percent to US$11.4 million, now account for about three quarters of Diligent's revenue, having previously made up 80 percent.

"Europe has as many public and private companies as the US, so we see that market as big and that's obviously the goal," Sodi said.

That will hinge on Europe's struggling economy turning around and the region's company directors buying into a new way of doing things.

"The market's coming to us - we're not spending a dollar to get a dollar, we're replacing a manual way of doing things," Sodi said.

The software-as-a-service firm added a further US$3.1 million to its cash balance at the end of the period, but still hasn't decided whether to introduce dividend payments.

Last year, Diligent signalled it would look at ways to use those funds, though administrative errors that saw its executive receive more options than they were entitled to and a disagreement with the Financial Markets Authority over its auditor caused it to put that on the backburner.

The company plans to lift its spending on research and development this year, hiring seven staff to boost its programming and quality assurance in New Zealand in the period.

The sales growth comes after Diligent posted a tripling in annual profit last year with annual revenue more than doubling to US$43.7 million. Annualised sales were US$58.4 million in the 12 months ended March 31.

The shares slipped 0.8 percent to $6.30 today, and have gained 16 percent this year.

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