By Jenny Ruth
Wednesday 9th March 2011
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Diligent Board Member Services' success in 2010 is attributable to increasing recognition of its Boardbooks software, increasing acceptance of the service by existing customers with the level of upgrades accelerating and its sales force generating increasing levels of revenue, says broker McDouall Stuart which organised Diligent's late 2007 float.
Despite solid growth with net additional licenses sold up 56% and net sales up 66%, the company retained tight control on costs and improved margins from 56.3% in calendar 2009 to 67.9% in the fourth quarter of 2010.
"This margin improvement shows the leverage available in this subscription business model," McDouall Stuart says.
"Further, the quarterly reduction in EBIT (earnings before interest and tax) loss continues. This reduction enabled the company to achieve maiden operational cashflow for the year of US$18,000 (NZ$24,367) and accumulated cash has risen to US$3.2 million which will assist expansion into Asia," it says.
Diligent's 2011 sales prospects have been boosted by the introduction of an Apple iPad compatible version of Boardboods last September and its acceptance into the Apple App store in January 2011 “has created unprecedented demand.
McDouall Stuart is forecasting Diligent will report an adjusted net loss of US$0.5 million this year compared with the US$2.2 million net loss last year and move to a $2.1 million net profit in calendar 2012.
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