Diligent hits maiden profit after record quarter

Corporate governance software maker Diligent Board Member Services says it has chalked up its first profitable year on an operating basis after new sales in the fourth quarter surged to record levels.

The company's shares rose 6.4 per cent in early trade today to $2.50.

In a statement released to the NZX today, the company said new sales in the quarter rose about 17 per cent to US$6m ($7.6m) compared with the previous three months.

On an annual basis, new sales soared 287 per cent versus the same period last year, equating to a total of 203 new client agreements signed versus 59 last year, with strong growth coming from Europe.

''This remarkable increase in sales growth has been achieved with only nominal growth in sales force and marketing expense and is resounding evidence of both dramatic heightened demand for the Diligent Boardbooks products and improved efficiency in out client acquisition cost ratios,'' the company said.

The New York headquartered software company noted that upgrades were becoming an increasingly important revenue stream for the business, earning US$920,000 in the fourth quarter, up from US$290,000 in the third quarter.

Cash flows increased by over US$4m in the period, leaving it with US$9m worth of cash in the bank.

''We expect positive trends in cash flow and improved balance sheet flexibility to continue in 2012 and feel we are well-positioned to deliver another year of exceptional performance and outstanding value to our clients and shareholders,'' Diligent said.

The company has been one of the most noted outperformers on the NZX, with the share price having gained over 250 per cent over the past 12 months.

- © Fairfax NZ News