(Reuters) -Shares of TechnologyOne are headed for their worst day in nearly 23 years on Tuesday after reporting annual profit short of analyst expectations, as its shift to a software-as-a-service delivery model weighed on near-term margins. The Australian enterprise software provider's stock sank 16.6% to trade at A$16.68 per share, on track for its weakest session since late November 2002, as of 0250 GMT. The company's shares were the biggest laggard on the benchmark index, which is down 1.7%. The Brisbane-headquartered firm posted a rise in annual profit after tax to A$137.6 million ($89.29 million) for the fiscal year ending September 30, falling short of the A$139.9 million consensus from Visible Alpha. The company's shift to SaaS+, which bundles enterprise software solutions and implementation in a single fee, shaved 2.7% off margins, keeping its profit-before-tax margin flat at 30%. Total revenue for the year rose to A$610 million, and annual recurring revenue (ARR) reached A$554.6 million, up nearly 18% from last year. TechnologyOne’s UK operations, which boosted earnings last year, saw profit nearly halve to A$1.5 million from A$2.9 million last year, even as ARR leapt 49% compared to last year to A$51.8 million, as the company further invested in growth in the region. The company declared a final dividend of 20 Australian cents a share, down from 22.45 cents a year earlier, and added a special dividend payout of 10 cents. ($1 = 1.5411 Australian dollars) (Reporting by Kumar Tanishk in Bengaluru; Editing by Ronojoy Mazumdar)
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