My name is Pat O'Sullivan, and I'm the Chair of Technology One Limited. I would like to begin by paying our respects to the Meanjin peoples of the Turrbal and Jagera Indigenous groups, who originally inhabited the land we're upon today. For the first time, today's meeting will be run as a hybrid meeting with shareholders attending face-to-face and via the Link online platform. This enables shareholders to participate in the meeting irrespective of where they are in the world, and I warmly welcome those of you participating online. I'd particularly like to welcome those who've been unable to physically make it to one of our AGMs in the past. Before we start, I would like to play a short video to introduce our new shareholders to Technology One.
From information provided to me by the Company Secretary, I advise that a quorum is present, and I declare the meeting officially open for business. I would now like to introduce my fellow directors. From my right, Mr. Ron McLean, Mr. Peter Ball, Chair of the Audit and Risk Committee, Mr. Clifford Rosenberg, Chair of the Nomination and Governance Committee, Sharon Doyle, and to my left, Dr. Jane Andrews, Chair of the Remuneration Committee, Mr. John Mactaggart, and Mr. Richard Anstey. Let me also introduce our CEO, Edward or Ed Chung, our CFO, Paul Jobbins, our Chief Operating Officer, Mr. Stuart MacDonald, and Mr. Stephen Kennedy, our Company Secretary. There have been no apologies tabled for today's meeting. Also, I note our company's auditors, Ernst & Young, are represented here today by Mr. John Robinson and Ms. Jennifer Barker.
We have a number of Technology One staff here today in Technology One shirts mainly. I would like to thank them for helping us. I would like to recognize the company's founder, Adrian Di Marco, who 35 years after founding Technology One retired from the company on the 30th of June, 2022. Adrian has built an incredible market-leading software business through his vision, energy, and commitment to greatness. He left the business in excellent shape for future growth. Everyone associated with the business wishes him well in his future endeavors. I would also like to acknowledge Ron McLean, who will retire as a director of Technology One at the conclusion of today's meeting.
Ron was appointed as a non-executive director in 1992 and was then appointed as general manager in 1994, chief operating officer in 1999, and then promoted to chief executive officer of operations in 2003. Ron retired from this executive role in 2004 and has remained on the board. Ron has made a substantial contribution to the success of Technology One. His deep industry knowledge, advice, guidance, and enthusiasm has always been greatly appreciated, as has his commitment to the company. I personally had the benefit of Ron's years of Technology One experience to call upon when I first joined the board. Ron was always readily available to impart his knowledge. On behalf of myself, the board, and the whole company, thank you, Ron.
Before I start the formal part of the meeting today, Ed would like to take the opportunity to provide an overview of the company's performance in FY 2022 and our strategic direction going forward. The slides that you will see today have been lodged with the ASX. Ed.
Thanks, Pat. Good morning, everyone. Welcome to the FY 2022 AGM. You know, Tech One has delivered consistently strong results since listing all the way back in 1999. Our ability to do that is quite simple to me. It's our consistent vision, strategy, values, compelling customer experience. We call that the DNA of Tech One. It's not changed over that whole time. We've got lots of sayings in Tech One, lots of mantras, and one of them is, "We say it and we do it." What it does, it builds this huge alignment and commitment in our organization. If we hit our goals, great. If we miss, we've got some to anchor all our conversations about. What that does, it builds lots of credibility and trust in the market.
It's why we disclose our ambitious plans, our ambitious targets, because we sometimes get asked, "Why do you do that?" Up here you can see our clear strategy. It's consistent, it's never changed, and we're resolute in maintaining it. We're an ERP company. We provide really broad and really deep software for our customers. If you go back to 2008, we had about 11 products. In 2022, we now have 16 products, and each one of those products has 20-30 modules. There's about 400 modules that provides really deep and mission-critical software for our customers. We provide the deepest functionality for the markets we serve. We're not all things to all people. We focus on those core markets, 6 markets only, and we solve complex problems. Our software runs and powers local government.
They can't survive without it. It runs and powers universities, hospitals, governments, large infrastructure providers. We've got our global SaaS ERP, one code line, hugely efficient. With that efficiency we invest back into our software, back into our customers, and the majority of our customers are now on SaaS. On SaaS, they get 2 releases every year. They're always on the latest tech. They've got the highest level of cybersecurity certification of any ERP provider on the planet. Being on the latest release, all modules are available to them. They can take them with little friction. Also in doing it, coming to our SaaS, they save 30% by moving to TechOne SaaS. During the year, we completed what we call our 4th-generation ERP. If you think about TechOne, 16 products, 400 modules, it's mission-critical software. It's in our DNA.
We've rewritten it not once, not twice, but four times in the history of TechOne. There's no other company in the world that's done it 1. TechOne's done it 4x to keep our customers abreast of technology, digital revolution, working anywhere, any device. That's our 4th generation. We call it Ci Anywhere. The 5th thing there is Power of One. We build it, market it, sell it, implement it, support it, and run it. No one else does that. It's quite amazing. That's enabled us to release our latest strategy solution and service. I'm gonna talk about that a little bit later. Our final piece of our clear strategy is we're an innovation-led company. We invest strongly in R&D to build for the future, that's about 25% a year. You saw on the slides we had AUD 92 million last year.
This year it'll be plus AUD 100 million of investment back into R&D. We've got that consistent strategy. We've been there for 35 years, hasn't changed and will not change. With that, we've delivered really strong results. You can see it up there. Record SaaS growth, 43% growth last year to AUD 274 million. When you look at our total ARR, that's now AUD 320.7 million, up 25%. That's the highest growth in the history of Technology One. We now have 800 customers on our SaaS platform. It is the largest single instance ERP SaaS platform in Australia. We've learnt two new terms going to SaaS, and the first is land and expand. All we need to do is sell you one product and one module and expand over many, many years.
The second, we learned this from Adobe, cloud is war. When you get you on our cloud, you'll see all of our products, you're sticky, and we won the war. We will sell you lots of products over time. With this strong ARR growth, I'm proud to report we delivered record profits last year. Record net profit after tax, up 22%. That's the 13th consecutive year of profit growth, record profit growth, and the top end of guidance for TechOne. We had a target. Those big targets we talk about, AUD 500 million worth of annual recurring revenue by FY 2026. If we finished FY 2022 with AUD 320.7 million, you'll do the math. We're gonna beat that target. We're gonna surpass that target. We sometimes get criticized for putting those big targets out there.
If we don't, the market makes it up. We put it out there, it builds commitment. We say it, we do it, and we will deliver it. We'll beat that target. By all measures, you can see TechOne's going really well. We've got that mission-critical software that local governments and units can't do without. It runs their business. Got really strong recurring revenues, 99% customer retention over 35 years. That's also unheard of. All this results in consistent strong cash flows and large cash reserves. As a result, we declared a special dividend at the end of FY 2022, giving shareholders some extra return, and that was a AUD 0.02 per share special dividend, just like we did many years ago in 2014. To sum up, we've got huge confidence in the future.
We've got significant firepower to keep investing in growth, the full year dividend has been increased 22% in line with the profit growth of TechOne. We also focus in margin in TechOne, you can see our margin there without the acquisition of Scientia group from 31% to 32%. It did come down just temporarily because Scientia is a business we acquired with a lower profit margin. During the year we've delivered on the synergies that we targeted, you'll see that profit margin increase again this year and continue the trajectory to 35% over the next few years. When we get there, in the TechOne way, we'll set another ambitious target. We've got a strong balance sheet. Cash was up 22%. We have no debt, we have very strong cash flow generation.
You can see there, up 21% as well. This is just repeating our investment in R&D. We've delivered during the year CiA, our fourth generation ERP. Over the last 35 years, TechOne has invested AUD 800 million to not only refresh its technology, but build those 16 products, those 400 modules. In this fourth generation, we've rewritten the software fourth time. No other company has done it once, let alone four times. You can see our results are very strong, and we're poised for our next phase of growth. To do that, we need to reinvigorate our values, our purpose, our mission in TechOne to teach the new-timers that join TechOne and remind us old-timers what makes us special. It's not about changing them. It's just about writing them and making them succinct and teaching everyone in our organization what makes us special.
We call it the DNA of TechOne. If you cut us, we bleed TechOne, we bleed code. We're also investing significantly in leadership in TechOne. We've announced a leadership academy, we ran our first series of summits starting in July last year, where we got 130 of our leaders into TechOne to rewash them, re-indoctrinate them in the TechOne way, teach them our values. That's a six-part series that will continue. We ran another one just last week on compelling customer experience. To wrap up the results for FY 2022, you can see there we had record profits, record SaaS revenue, record ARR. Profit after tax was up 22%, cash flow generation up 21%.
SaaS ARR up 43%, we're on track to beat that ambitious target of AUD 500 million of annual recurring revenue by FY 2026. We now fast-forward to FY 2023. We'll go through the outlook for 2023. The markets we serve, they are highly resilient. Higher education, local government. We provide the software that runs their business. They can't do without it. With our global SaaS ERP, we take care of all of the technology issues, they can focus on running their business. We've got a strong pipeline for continuing strong growth in annual recurring revenue and profit for the year, we're excited what the future holds. We will surpass that target of AUD 500 million annual recurring revenue by FY 2026.
When we do our first half results in May, we'll give updated guidance, more specific guidance, as we usually do. I now just wanna spend a couple of moments on the long-term outlook, the future. People ask me, "If you're gonna beat AUD 500 million annual recurring revenue by FY 2026, what's next? What's your next ambitious goal?" As you expect, our plans don't end with AUD 500 million. Our plans don't end in FY 2026. In TechOne, we plan out long term, 10 years. Our R&D investments are for the future. we spend lots of money. We invest AUD 100 million this year to build for the future. With the completion of CiA, the fourth generation of software, we've now released to our customers our next generation of products.
Things like Digital Experience Platform, things like App Builder, which will continue our momentum and will continue to double in size every five years. We grow by a number of ways. Traditionally people have looked at Technology One and said, "You must grow by winning," we call new logos, new customers, Technology One, "and by being successful in the U.K." That's true. We will be successful in the U.K, and we will then win new logos. We're also particularly excited about our existing customer base here in APAC. We've always said to the market, we're no more than 15% penetrated into any vertical market, which means there's a bucket load of runway in the customers in APAC. Think of that saying, cloud is war and land and expand. Our marketing up there said 77% of us live in a council powered by Technology One.
That's totally true. That will only be one product or one module, and then they'll take all of the products and modules over of TechnologyOne over time. There's a bucketload of opportunity in our existing customer base. In the SaaS world, that's called net revenue retention or NRR. You can see there, TechnologyOne last year recorded 116% NRR. That means existing customers bought 16% more software off TechnologyOne. The world's best NRR is between 115% and 120%. TechnologyOne is up there with world's best in terms of net revenue retention. If we continue that growth, that strategy alone will double in size the business of TechnologyOne over the next five years. We stay true to our core beliefs in TechnologyOne. That's why we invest heavily in R&D.
We invest not for now, but for the future to continue those platforms for growth. We had, as I said, in 2008, 11 products. 11 products. We now have 16 products. That's our investment in R&D that creates that. TechOne's a SaaS company, and we've come from on-premise to SaaS. It wasn't TechOne that invented SaaS. It was a company called Salesforce.com. Great company. They changed the world. There was an on-premise way where you had to buy servers and put memory on it, install software. That was how software used to be done. Salesforce came in and said, "You don't need any of that. We're gonna take care of all your problems and change the world to SaaS." They had the vision and the conviction to make that happen. They truly changed the world.
Like Salesforce changed the world to SaaS, TechOne's gonna change the world. It's the next logical evolution for us. It's a game changer, and we call it Solution as a Service. Many companies now sell SaaS, but they do these long, drawn-out implementations with consultants, and we call them system integrators, you know, third parties that come in, to work out what you need configured. We're gonna take away all that complexity and do it all for our customers in 1 single fee. Get rid of all the complexity, get rid of all the implementation time frames, and change the world. Solution as a Service is long-term strategy and a game changer, can only happen through the Power of One. Can only happen because TechOne has the software, has the IP, and has the consultants all within what we do. It's the next logical evolution.
Solution as a Service is very exciting. In short, we're confident in the strategies we have in place. You can see up there on the slide. Net revenue retention of 115% alone will double the size of the company. We've got today, we call it AUD 2 billion of white space in APAC. That's the products and modules our customers don't have. There's plenty of opportunity. With the new products we're building, with Solution as a Service, that grows from AUD 2 billion- AUD 4 billion over the next five years. As I said, Solution as a Service is a game changer. That increases our annual recurring revenue alone by 40%. We continue our strategic acquisitions. Last year, we acquired a company called Scientia, who we've known for many, many years, 20 years. They have the world's best timetabling and scheduling solution.
If you go back to 2001, we acquired Property & Rating, which is the software that powers local governments, and we'll continue our quest for those strategic acquisitions. Of course, we'll continue to win new logos in Australia, APAC, and in the U.K. You can see that we've got many, many strategies to continue to double the size of the business, and we're very well-positioned for the future. Just wanna spend a few moments now talking about our staff. None of what you see in these results happens without the talented TechOners who solve complex problems for our customers. We compete against some of the world's largest multinational companies. You know them, like SAP and Oracle. They have tens of thousands, hundreds of thousands of developers. TechOne has 400. With as much functionality, take on the world's biggest and wins.
It's through the amazing people at TechOne. We've been independently recognized as an employer of choice, and we invest holistically in our staff. Yes, we invest in remuneration, we invest in their careers, but we also invest through a whole lot of these programs you see up there on the screen. Grad programs, buddy events, CKO, hack days. We invest quite a lot in our people. Talking about our people, the TechOne Foundation is a very important part of our culture in TechOne. We have that ambitious goal to lift 500,000 kids and their families out of poverty, and we're on track to do that. We also participate in the 1% Pledge. 1% of our product, 1% of our profit, and 1% of our time goes to the charities that we support. As a growing company, that 1% grows every year.
Ladies and gents, thank you for your time today. FY 2022 has been an amazing year by all measures. I'd like to thank you, our shareholders, for your continuing support. I'd also like to thank the TechOners. You can see them in the room here. You see them with their shirts on. There's another 1,200 back at the ranch. None of what you see in these results happens without them. Thank you to all those staff in TechOne. They're ambitious, they're loyal, they're passionate. They make the impossible possible. Just now I'd like to play a short video which shows you a little bit of insight into our staff and our culture. Thanks, everyone.
Thank you, Ed, for that excellent presentation.
If you're a shareholder and would like to ask a question through the online platform, please click on the Ask a question tab at the bottom of the screen and follow the instructions provided. We will endeavor to answer as many questions as we can. You may submit questions now or at any stage during the meeting. You do not need to wait until a relevant item of business. We will seek to address your question during the discussion on the appropriate item of business. Questions being sent through the online platform may be moderated to avoid repetition, and if the questions are particularly lengthy, we may need to summarize them in the interests of time.
We will provide time for questions on each item during the meeting, but I would now like to provide the opportunity for shareholders to raise any questions they may have specifically regarding the content of Ed's presentation. If you have a question, I ask that you raise either your voting card or your registration card, and we will have one of our staff come over and give you a microphone. At this time, could you please stand up, identify yourself, and then proceed with the question if there are any in the room.
Good morning. My name is Paul Donahue. I'm representing the Australian Shareholders' Association today. We're representing 80 members who have shares in the company. First of all, congratulations on spectacular results, the strategy you've just presented, looks fantastic, congratulations. Just got a few questions on the migration to SaaS and how it's going. You mentioned there's 2 releases a year. Are any of your customers pushing back on that? Like, is the frequency too much and causing too much business impact? If it is, how do you deal with that?
We've been at it a long time now, Paul, the two releases a year. Probably at the beginning there was a little bit of pushback to be honest. Our customers are all used to the cadence now, so there's no pushback. It's in their benefit to go the latest release because we're always on the highest level of cybersecurity.
Thanks. Second question, similar topic. The report says that 90% of your customers will have moved to SaaS by October.
Yeah.
When the on-premise business finishes. At least 10%, what's the plan for those customers?
Yeah. We'd hope not to lose any. There are some that are probably too small that we've won over many years, Paul, that won't come with us and we've included that in all of our forecasts. Our intent is to get every customer over, and we're working with the last. There's only a couple hundred left now. We're working closely with every single one of them to bring them across.
Thank you. Another question. You mentioned United Kingdom.
Yeah.
There's been a expansion to that geography for a few years now. The U.K. economy is slowing down I think the end of 2022.
Yeah.
got so close to recession, it's not funny. Are you expecting any slowdown in new sales over there, or are your customers resilient to recession?
Yeah. It's the same no matter where they are in the world. In those markets we serve, whether local government or higher education, those types of organizations look to Technology One to save money during slowdowns. We don't expect any slowdown because of what might be happening in the economy in the U.K.
Okay. Excellent. Another geographical question. The annual report talks about, soon will it explore opportunities in new geographies, including the United States. In that context, how soon is soon?
I think we deserve to be in the U.S., right? We've got a great strategy and we're ready. When we take a step back and we look at the huge investment we've made in the U.K, getting student management live, HRP live, excellent reference ability, that's where our main focus is, to be honest, Paul. I think when you think about the markets there, they're five times the size of APAC, and with that huge investment to get customers live, that's where we'll focus our time, energy, and attention to really double down in the U.K.
One last question. If you think back to last year, there was cyberattacks, it seemed to be every week.
Yeah.
with big companies like Medibank and Optus and things like that. Have you had to bolster your cyber defenses at all in response to that?
We haven't had to. Probably way back when we went on our cloud journey, which is now SaaS. One of the core tenets we said to ourselves is, cybersecurity had to be built in at every layer, number one. Number two, we would always be at the leading edge of cybersecurity certification. Cyber is one of those things where you have to keep investing. Today, we have the highest level of cybersecurity of any provider on the planet, but we can't rest on our laurels. We have to keep investing to maintain that. No change because of what happened, but we just keep our focus on those certifications and keep lifting the bar.
Excellent. Thanks very much.
Thanks, Paul.
Any other questions in the room? Paul, are there any questions?
Yes, there are, Pat. There's three questions from shareholders. I'll read them out now. The first one is from shareholder Ray Tollefson, and he asks: The third last paragraph on page 139 of the annual report appears to imply that the acquisition of Scientia may not be performing as well as originally expected, as there's no provision for additional earn-outs. Is this interpretation correct? Please comment on how Scientia is performing.
Do you want me to take that one? In any acquisition that Technology One does, we have earn-outs in place, which stretch the business to overachieve. But Paul, is that right? These are the overachievement earn-outs? Yeah. Okay. We agreed with the founder and the sellers at the time, to pay them, you know, a certain price. If they overachieve the numbers and get higher ARR growth and higher profit growth-
They would earn more money. It's not that it has underperformed. They haven't achieved those over-performance targets.
Thank you. The second question is from shareholder Stephen Mayne. He asks, "I'm a local government councilor at the City of Manningham, which uses TechnologyOne, but I was surprised by the CEO's comment that local government can't survive without us. How many of Australia's circa 550 local governments are currently surviving without TechnologyOne, and who are our biggest competitors when it comes to servicing the Australian local government market?
Thanks, Steve. I can't do the math. What's 23%? 77% live in a local government powered by TechOne. 23 don't use TechOne.
Okay, thanks, Ed. The next question was also from Stephen Mayne. He asks: Did any of the five main proxy advisors, ACSI, Ownership Matters, Glass Lewis, ISS, and ASA, recommend a vote against any of today's resolutions?
Which of the proxy advisers are covering us, and have there been any material proxy protest vote? Will you disclose the proxy votes before the debate on each resolution, so shareholders can ask about the reasons if there have been any protest votes? Why not disclose the proxies to the ASX with the formal addresses like others now do?
Thanks, Steven. The answer is yes, we will show the proxy votes and there has been a vote of 23% against the REM report, which I'll address when we get to that report. Any other questions?
That's all the questions online.
Any questions from the phone line?
Chair, there are no questions via the phone lines.
Excellent. Let us now return to the formal part of the meeting. The notice of meeting was issued to all registered members on the 16th of January, 2023. I propose that the notice of this meeting provided to all members be taken as read. Everyone present here today is required to have registered at the front desk. This includes shareholders, proxy holders and visitors. If you're not already registered, I would ask you to please see the representative from Link at the registration desk located outside. All proxies that have been received have been inspected, and all those validly lodged have been accepted and registered. A register of proxies received is also available. I've been advised that 506 valid proxy forms have been received, representing more than 240 million votes, being approximately 74% of available votes.
We will now go through the procedures for today's AGM. We will be conducting a poll for each resolution at today's meeting. Shareholders and proxy holders intending to vote would have been given a yellow voting card on registration, which you will need to use at the time of voting by completing the voting card at the appropriate time, either in favor or against a resolution. Shareholders that have already voted prior to this meeting will have today been given a blue card on registration. For those shareholders participating in the meeting via the online platform, you can cast your vote using the electronic voting card that you received when you validated your registration. If you have any questions about casting your vote online, please refer to the online platform guide or call the number set out in the guide or on your screen.
Those registered shareholders attending the meeting online today will have the functionality to vote and ask questions on the devices and via the phone link provided. I will consider the questions submitted online after I've taken questions from the floor. Please note that visitors are not eligible to vote or to ask questions, as this is a meeting for shareholders. Visitors are welcome to stay and observe the proceedings. Visitors have been given a red card at registration today or view-only access online. We will now move into the items of business for this meeting as set out in the notice of meeting. The first item of business today is to receive and consider the financial statements and reports of the directors and the auditors for the year end of 30 September 2022.
The annual report, including the financial statements, was distributed to members on the 16th of January, 2023, and has been held by the members for a time that meets the statutory period. Ladies and gentlemen, this is not an item which requires a vote, but this is now an opportunity for to ask any questions that you may have on the annual report. Shareholders that wish to ask a question, please raise either your voting card or your registration card, and we'll have one of our staff come over and give you a microphone. Are there any questions in the room?
Paul, are there any questions?
Yes, there is, Pat. There's one online question from shareholder Stephen Mayne. He asks, "Some of our critics believe our profits have historically been overstated because we capitalize some software expenses. Similarly, a few years ago, we were being more aggressive than presently on revenue recognition. Please summarize the change we made to revenue recognition principles, and could the external auditor and Audit Committee chair explain why we don't more aggressively expense software and IT expenditure?
Thanks, Stephen. I think we've been over that ground over the years. The company is audited. Yes, we do capitalize costs, absolutely consistent with other Australian technology companies, and our revenue recognition are in line with accounting standards. I don't intend to address that further.
Thank you. There's no other online questions.
Are there any questions from the phone line?
Chair, there are no questions via the phone lines.
Thank you. As previously discussed, we will undertake a poll for each resolution at today's meeting. Shareholders and proxy holders intending to vote will have been given a voting card on registration, which they will use as a record of their vote, either in favor or against a resolution. If you need assistance with completing your voting card, please ask one of the Link Market Services staff members that are available at the registration desk or in the room. I now declare the poll open. You may cast your votes at any time from now until the close of the meeting. A representative of Link Market Services will act as Returning Officer for the purpose of conducting and determining the results of the poll. The official results of the poll will not be available by the close of the meeting.
The results of the poll will be released to the markets on the ASX company announcements platform as soon as they are available, which will be later today. Given the large number of proxies that have been registered for today, we expect to be able to provide a clear indication if a resolution is likely to pass or fail. We will now move on to the items of business for this meeting as set out in the notice of meeting and which require a vote. These are ordinary resolutions and therefore require more than 50% of the votes cast in favor by members entitled to vote on the resolution for the resolution to be passed. Resolution one is in relation to the remuneration report.
To consider, if thought fit, pass the following resolution in accordance with Section 250R of the Corporations Act, that the remuneration report as contained in the annual report be adopted. I would like to make a few specific comments in relation to the remuneration report, and in particular, recognizing, as I said earlier, the 23% vote by shareholders against supporting this report. Technology One is an outstanding entrepreneurial success story built by Adrian Di Marco over three decades. The company, as Ed showed, is today valued at an enterprise value of over AUD 4.5 billion. A very large part of that success is attributed to the efforts, focus, and energy of our bright, smart, and visionary executives and staff.
When Adrian announced his retirement last year, the company's executives were aggressively headhunted by other global technology companies who saw an opportunity to poach some outstanding talent who've been very loyal to Adrian and the company and who they felt might now make a move away from the company. The remuneration packages being offered by other companies were eye-watering at a time when we were at the height of the global tech reign. We, your board, made the decision that we should work hard to retain all key executives in order that we could seamlessly get on with growing the business.
We determined that we did not want to permanently inflate the company's cost base by increasing fixed remuneration or the short-term incentives, but rather put in place a one-off long-term incentive in the form of long-dated options, whereby the executives need to be employed by the company in November 2026. If the share price grows, they would benefit in perfect alignment with the shareholders. These retention options were issued to a very small group of executives, and with this one-off retention in place, 2 of our 3 key management personnel have total employment packages that rank them below the 60th percentile for their peer group when we do the benchmarking. In our opinion, hardly overpaid, and the majority of our remuneration is invariable at-risk pay. Technology One has delivered sustainable total shareholder returns over a long period of time.
Our five-year returns are 18%, when the All Ordinaries is 7% for the same period. We've consistently delivered strong growth. Our revenue and profits have grown at strong double-digit levels, as Ed showed, over a long period of time. We have committed to doubling the company over the next five years. If I was standing here this morning telling you that we had lost Adrian and a number of our key executives all at the same time, I expect there would be many questions as to why we let that happen and what exposures that leaves us with. Let me re-emphasize that your board is a very commercial board that is focused on delivering sustainable shareholder returns for you over the long term. We value tremendously the commitment of our executives and staff who are the key IP of this company.
Further, we believe the remuneration policies adopted by the company align with best practice for an ASX company. Executive remuneration continues to be clearly aligned with shareholder value creation. Total continuing executive KMP remuneration grew by 8% year-on-year, excluding the retention LTI. When you include the retention LTI, it grew by 14%. When the company's net profit before tax grew by 15%. Short-term incentives across our continuing executive KMP were up 14% in line with the growth in net profit before tax of 14%. Executive net profit before tax has always been the basis for Technology One's STI.
The deferred STI earned was up 14%, again, in line with growth in net profit before tax. The company's long-term incentive plan based on earnings per share growth and total shareholder returns relative to technology companies resulted in a 97% of at-risk LTI vesting for the executive KMP. The board set challenging LTI targets which drive superior performance and long-term shareholder value creation. Section 250R of the Corporations Act requires that a company's members vote on whether or not the remuneration report should be adopted. This vote is advisory only. The outcome will not be binding on the board. Please note that the directors and executives are excluded from voting on this resolution. I can confirm that any proxy votes submitted by directors and executives have been excluded from the proxy count.
If you have a question, I would now ask you raise either your voting card or your registration card, and we will bring the microphone to you. Is there anybody in the room who would like to ask a question in relation to the Remuneration Report?
My question's about the retention LTIs. I understand the context in which they were conceived, and it makes sense that the board had to find some way of retaining the key staff, and I agree that letting senior executives leave at that time would have been detrimental. My question is the other long-term incentives all have performance hurdles, but the retention LTIs have none. I note that the report says there's an implied hurdle in that the options aren't worth exercising unless the share price has gone up. The expiry date's a fair way in the future. They're already well above that. It's not much of a hurdle because in 2026 we expect the share price will have risen.
My question is, why did the board not add some performance hurdles to the retention LTIs?
The short answer, Paul, is we went through a whole bunch of different scenarios as to what was appropriate or not appropriate, and in the context of what was happening in the market at that point in time, which fortunately, I think most global tech companies have seen come off the boil in the last few months, which is great. That was the decision we took. To me, as a shareholder of the company as well as a director, if they do well, then I've done well as a shareholder
Yeah. Thank you. Second question is, you alluded to the fact that maybe some of the executives are underpaid compared to their peers, and the retention LTI is meant to be a one-off thing. The market forces that led to the situation, they haven't gone away. The IT market's incredibly competitive still. I'm sure any number of companies would want to poach your chief executives and other executives. How do we know there won't be another similar grant in the future?
Are you with the Australian Shareholders' Association or the Union for the Executives? The short answer, Paul, is we are constantly benchmarking, yeah. Again, for those that, you know, follow global markets in terms of technology companies, the last 12 months have been unprecedented, yeah. Like I say, you know, fortunately, I think we're coming back to more normalized markets. We benchmark all of our executives, not just the KMP, and we make decisions around pay, you know, when somebody joins the company, when somebody's with the company based on performance, based on promotions, et cetera, et cetera. You know, that's something which, you know, led by Jane's committee, we spend a lot of time on. Yes, there's always risk of losing executives.
For this moment in time, like I say, it's an incredibly unique moment in time for those that have been shareholders of this company for a long time, which I have not been. You know, Adrian has built something very special. I, as an outsider, if I was looking in, would say, "Hey, here's an opportunity to go poach some people who've worked with him for a long time." It was a very unique moment at the height of that tech boom. That's the decision we took, and we stand by it today, and we would do the same thing tomorrow if we were back in the same position.
Thank you.
Any other questions from the floor on the remuneration report? Paul, have you got questions?
Yes, Pat, there's two questions which I'll paraphrase from Stephen Mayne. Before last year's AGM, the now departed executive chairman authorized the release of an ASX announcement defending pay and attacking proxy advisors and industry funds based on their commentary on the company's pay arrangements. Did any of the non-executive directors on the Remuneration Committee see this statement because it was lodged with the ASX? Do you agree that this statement shouldn't have been lodged? Further, do you, the chair, think the proxy advisors and some ACSI members have taken their revenge by recommending and voting against the REM report after the founder's performance last year?
Thanks, Stephen. The short answer to your first question is yes, directors did see it. One proxy advisor has voted against the REM report. Jane, myself, and you, Paul and Stephen, spent a lot of time talking to proxy advisors and shareholders. What I would say is we had a fair hearing in relation to this particular topic. The reality is that certain proxy advisors have a box to tick in relation to remuneration, and if the word retention's mentioned, they can't support it. I think we've had a very fair hearing. As I just said earlier in answer to the earlier question, we would do the same thing again tomorrow if put in the same position.
Thanks. There's no other questions.
No other questions.
Any questions on the phone?
Chair, there are no questions via the phone lines.
Thank you. I will ask you to complete your voting card with how you intend to vote on this resolution. The proxy votes received prior to the meeting are now displayed on the screen. From the proxies we have, I expect this motion should pass. Resolution 2 is to consider and if thought fit, pass the following resolution as an ordinary resolution. That Jane Andrews, who retires by rotation in accordance with Rule 16.1 of the company's constitution, and be eligible, be re-elected in accordance with Rule 16.2 of the company's constitution. I would now like to ask Jane to address the meeting and provide a brief background on herself and the experience she brings to the board of Technology One.
Thanks, Pat. Welcome fellow shareholders. It's a great privilege to be able to address you today, more importantly, a great honor to have been able to serve on your board for the last 7 years. I really have immensely enjoyed it, I'm grateful for the opportunity. I'd like to start by taking you through my background. I have spent my entire career in the technology industry, starting as a research scientist, moving through a range of roles in venture capital. As an entrepreneur, I founded a business, a biotech business, which is developing new therapeutics. I've worked in leadership roles in collaborative research organizations, I've also been an active investor and director in a number of technology companies.
I guess for a lot of you, biotechnology might seem like a bit of a stretch from an enterprise software business like Technology One. I'd like to explain some of the similarities, I guess, with some of the organizations I've worked with previously and Technology One. I think most notably, the fact that we have to focus on the long term as a board. As Ed alluded to previously, the investments that we make today will not be seen in our results for around 10 years. That's a really long time horizon that we need to be focused on, and we need to manage those investments carefully. We need to have courage, creativity, and diligence about how we manage those investments to ensure that we are looking after shareholders' interests over the longer term.
We also need to focus on the short and medium term, and I think this is an area that Technology One does exceptionally well. As Ed alluded to in his presentation, there is an extraordinary level of rigor around every aspect of this business. It is absolutely in the culture of Technology One to set clear commitments and be held to account on those. There's a really regular cadence at which we review, performance and look at how we're tracking. It gives me immense confidence as a director to see how reliably, the team delivers on those returns. Biotech companies like Tech One also have to manage risk, because if we muck up, the consequences are significant for our customers.
We really wear that responsibility heavily around looking into things like cybersecurity to ensure that our customers and our business is safe into the longer term. Finally, although we talk a lot about products with Technology One and in biotech as well, as Ed alluded to previously, it's really about our people. People are our power. It's a core value of Technology One, and it's not one that we just pay lip service to. We truly recognize them as our most valuable asset. I'd just like to recap really quickly on my seven years at the business, because we talk about evolution of this business. When I talk about evolution as a biologist, I'm thinking thousands and millions of years. In the seven years I've been with the business, there's been massive transformation.
When I joined in February 2016, the company's shares I think were valued around AUD 4.60. I'm sure all of you have been keeping an eye on the share price, as I have, and it's been really reassuring to see that that has more than tripled over the 7 years that I've been around the company. I think more exciting than that is some of the initiatives that have happened over the time that we've been, over the last 7 years. Particularly when I think when I started, we were really a legacy license software business.
We had very kind of lumpy cash flows and, I think about the evolution to SaaS and how smoothly that transition has been executed without any effect on profitability or customers, and it really is an extraordinary achievement and a testament to the team to have done that. Other things have changed dramatically over that time, too. We were just starting to talk about the cloud, and we really only had a few customers back in 2016. It wasn't a profitable part of our business at that point in time, and it now really drives a lot of the profits. At the time, we were also led by Adrian as our founding Executive Chair, who was a great visionary.
I think to his testament and to the rest of the board, the succession to Ed as CEO and Pat as Chair has been done incredibly smoothly. I think there's been a lot on the journey, and there's a lot to go in the future that I'm really very excited about. It's a great honor to put myself up for re-election today. Thank you.
Thank you, Jane. I'm not gonna read all the words again, but is there any questions in the room? If so, we'll get the microphone to you. All good? Paul? No questions? Are there any questions on the phone line?
Chair, there are no questions by the phone line.
Excellent. I will ask you now to complete your voting card with how you intend to vote on this resolution. The proxy votes received prior to the meeting are now displayed on the screen. From the proxies we have, I expect this motion will pass. Resolution 3 is the re-election of Cliff Rosenberg as a director. That Cliff Rosenberg, who retires by rotation in accordance with Rule 16.1 of the company's constitution, being eligible, be re-elected in accordance with Rule 16.2 of the company's constitution. I would now like to ask Cliff to address the meeting.
Many thanks, Pat. Hi everyone. Good morning. It's a real pleasure to stand here today for re-election. I joined the board February 2019, so 4 years ago. Just as Jane alluded to, share price increase, I think when I joined we were in the early AUD 7s, and for those of you watching the share price today, we're probably in the AUD 14s or something. By all standards, it's been an absolutely exceptional performance, and it's been an absolute privilege to watch world-class leadership by Ed and his exectives , and the superb guidance and support of my board around me. As well, a brief background on myself. I've had about a 30-year career in the technology sector. I was previously on the boards of Afterpay and Nearmap. I'm sure some of you have heard those names before.
Both of those companies have delisted as they were sold to American entities. I also opened the Australian offices as well as the Southeast Asian offices for LinkedIn in 2009, just before we IPO'd in 2011. Today I sit on two other public boards, one of which is listed in South Africa, and we do quarterly Zoom meetings. I think we've yet to be able to catch up in person due to COVID. Yeah, besides that, I sit on three private boards, basically early-stage tech companies, just to keep myself in sync with the tech sector and provide some coaching and to give something back to the tech community that I'm part of. That's my background. I'm delighted to stand here for re-election, and I'm happy to take any questions. Thank you.
Thank you. Any questions in the room? We have a question, Cliff. Don't go away.
Yeah. Hi, Cliff.
Hi.
My question's about workload. You mentioned you've got 6 directorships in total. Tech One, a few listed ones and some unlisted ones.
Yep.
Obviously they're all different sized organizations.
Correct.
with different levels of commitment, or effort, sorry. You also mentioned some of the ones that you worked on before, Nearmap and Afterpay. Both those organizations have been through quite intensive corporate actions with takeovers. Has that recent experience, have you noticed spikes in your workload, and have you been able to manage the differing commitments on your time?
Thank you. Great question. I think the key thing for director responsibilities is to be available for crisis. When things are going well, director roles actually, I mean, we go to board meetings, we have a few interactions in between board meetings and on some boards, they're quarterly meetings. If you add up the hours, it's really not much. The key thing is, are we available for the event of a crisis? We had our fair share at both Afterpay and Nearmap, there were many calls on weekends and late nights. I was always available. I don't think I ever missed a call, I think at the time I probably had a higher workload than I have now. In fact, during some of those calls, I was still working full-time.
Today my JSE-listed company that I'm on, it's quarterly board meetings for 2 hours via Zoom at 7:00 P.M. at night. My other listed board is 6 weekly meetings. They're down the road from me where I live in Sydney. They're maybe 3 hours or 4 hours and a couple interactions in between. The early stage companies, it's mostly coaching and counseling, and I basically speak to entrepreneurs when I'm on the phone in the car sometimes. I hate to say it, but I've got a lot of spare time on my hands and I use it to spend time with my family and go traveling and participate in other things. Thank you. I appreciate the question.
Thank you very much.
Thank you.
Any other questions on the floor? Paul, have we got any questions?
There's one question, Pat, from Stephen Mayne. Could Cliff please comment on how he believes the new independent chair is traveling?
I've got an Uber here, Stephen, yeah. Yeah.
Could Cliff comment on Pat's independence and how often you're communicating with the founder?
Thank you. Pat, what's this with? I mean, I had the pleasure of serving alongside Pat on the board of Afterpay, we've known each other for many, many years and dating back before that. I've always had a superb experience with Pat, and I continue to do so. I can only applaud the work he's been doing, and I think my colleagues around me would support what I'm about to say, that he's an absolutely superb chair. Independence factor, no comment really for me to talk about on that side. I do speak to Adrian from time to time because we have a lot of mutual interests, and obviously we've got the TechOne background. Thank you.
No more questions? Any questions from the phone line?
Chair, there are no questions by the phone lines.
Excellent. We will now vote on this resolution. I will ask you to complete your voting card with how you intend to vote on this resolution. The proxy votes received prior to the meeting are now displayed on the screen. From the proxies we have, I expect this motion should pass. Resolution 4 is the approval for increase in directors' fee pool. To consider and if thought fit, pass the following resolution as an ordinary resolution. That the maximum aggregate amount of value available to be paid or provided as remuneration of the non-executive directors of the company for any financial year from and including the financial year ending 30 September 2023, be increased by AUD 500,000 from AUD 1.5 million per annum to AUD 2 million per annum. An independent market review of non-executive director fees was conducted during the year.
The board believes that the proposed increase in the director fee pool is appropriate for the following reasons. The current director fee pool of AUD 1.5 million was set four years ago. Since that time, the company has appointed three new directors and restructured the director fees to facilitate the appointment of an experienced non-executive board chair. The director's workload has increased due to significant growth in size over the last three years, additional responsibility transitioning from a founder-led company, and the continued international expansion in the U.K. Director fees were below market and inconsistent with market practice, where additional fees are paid to recognize the additional workload in chairing a board committee. To provide capacity for moderate increases in director fees going forward.
While the fee pool is a maximum annual limit available to be paid or provided to all directors, the proposed increase to the directors' fee pool does not imply that the fees payable to the directors will be increased according to that limit or that the full amount of the directors' fee pool will be used. The company policy regarding setting director fees is to have the fees independently benchmarked every three years and for a CPI-type increase for the years in between. Are there any questions in the room on that resolution?
This is a comment rather than a question. The ASA provides voting intentions for our members, talking about each of the resolutions and saying how the organization intends voting their proxies. We intend voting for this resolution.
We've had some feedback from members against that recommendation. I just wanted to explain the rationale. We also have access to independent.
Remuneration advisors, and they've confirmed that the current fee pool is low and the director fees are low compared to your peers. I say I'll be voting in favor of the resolution.
Thanks, Paul. Any other questions or comments in the room? Paul, questions? No questions? Any questions from the phone line?
Chair, there are no questions via the phone lines.
Thank you. We will now vote on this resolution. I will ask you to complete your voting card with how you intend to vote on this resolution. The proxy votes received prior to the meeting are now displayed on the screen. From the proxies we have, this motion will pass. Resolution 5, adoption of amended Omnibus Incentive Plan. To consider and, if thought fit, pass the following resolution as an ordinary resolution, that the company's Omnibus Incentive Plan, the terms and conditions which are summarized in the explanatory memorandum, be approved for the issue of securities under the plan for the purpose of Listing Rule 7.2, Exception 13 in sections 200B and 200E of the Corporations Act 2001, and for all other purposes.
The plan has been put to shareholders for approval at this annual general meeting for the purpose of Listing Rule 7.2, Exception 13 pursuant to this resolution. If the plan is approved by shareholders, issues of securities under the plan over the next three years will fall under this ASX Listing Rule exception and will not affect the company's ability to separately issue up to 15% of its capital in any 12-month period without having to obtain further shareholder approval. The board considers the plan to be a key part of the company's remuneration strategy going forward and to assist in the alignment of shareholder, director, employee, and contractors' interests. No issues of securities, directors, or other related parties can be made under the plan without separate shareholder approval being received. Are there any questions in the room in relation to this resolution?
I understand the administrative need for this resolution, but could you give us some insight into what were the drivers behind the changes to the plan?
Yeah. Jane, do you have it in?
Thanks for the question, Paul. Essentially, the main driver was really just to open up the option plan to a broader set of employees. We had intended to issue a Matched Share Plan, and the previous plan didn't enable that.
Okay. Thank you.
Thanks. Paul, any other questions in the room? Paul, any questions?
Yes, Pat, there's one question from Stephen Mayne. It's a question for Ed. He asks: Could the CEO summarize his past LTI grants as to whether they have vested or lapsed? Have you ever sold any shares in the company or bought on market without relying on the incentive scheme?
Thanks, Stephen. I am a proud shareholder of Tech One. I stand here in front of all shareholders and say all of my share wealth is in Tech One. I have no other stocks. I have earned that through the option plans over many, many years. I've sold some, where we get tax obligations and other family needs along the way. Thanks for your question.
Any other questions, Paul?
No, there's not.
Excellent. Any questions from the phone line?
Chair, there are no questions via the phone lines.
Thank you. I will now ask you to complete your voting card on how you intend to vote on this resolution. The proxy votes received prior to the meeting are now displayed on the screen. From the proxies we received, this motion will pass. Before collecting the voting cards, are there any general questions from the floor, online, or the phones that any shareholder would like to ask? Nothing in the room. Paul, you have 1 question?
There's one question online from Stephen Mayne. He says, "Thank you for offering shareholders a hybrid AGM this year. Are you a supporter of hybrid AGMs, and will Technology One commit to keep providing this in the future to maximize shareholder participation?
Yep. Stephen, I know you're a big fan, mate, 'cause you're probably sitting on 3 other AGMs as we speak, multitasking, the busy man that you are. We will consider this every year depending on what best practice is. Thank you that you're happy. Any other questions?
No.
Any other questions on the phone line?
Chair, there are no questions via the phone lines.
Excellent. As this is the last resolution on the notice of meeting, please now complete your yellow voting card if you've not already done so, as we will be closing the poll at the end of this meeting. As you leave the meeting, please place your voting card in one of the ballot boxes on the way out. There will be a representative from Link Market Services standing there to assist you if needed. Voting online on all items will close in 5 minutes. If you've not done so already, please submit your electronic voting card. The official poll results will be published to the market via the ASX company announcement platform as soon as practical, which is expected to be early this afternoon.
I would like to advise the meeting that we will retain the proxies and voting cards from this meeting for a period of 6 months, after which time they will be destroyed unless there is a reason for them to be kept longer. Before I close this meeting, let me say a few final things. I would like to specifically acknowledge the efforts of the TechnologyOne team. Their skills, commitment, and hard work have allowed us to continue our success and to overcome the challenges we face in the fast-changing world of information technology. The achievement this year are a testament to the caliber of people at TechnologyOne under the strong leadership of our CEO, Ed Chung. I would like to acknowledge and thank my fellow board members for their hard work and support and substantial contribution.
I would also like to thank you, our shareholders, for your continuing support and faith. With our highly integrated strategy, our current momentum, our technological vision, and strong financial position, we look forward to continuing success. For those of you here in the room today, I invite you to join me, my fellow directors and management, for refreshments in the foyer outside this room. For those shareholders and visitors attending online, we are pleased that our technology enabled your attendance today, and thank you also for joining us. I now declare the meeting closed. Thank you, everybody.