By PETER GRIFFIN IT writer
Software giant Microsoft's New Zealand operation made a $9.5 million profit in New Zealand in the year to June.
And despite sluggish industry conditions it increased its revenue by $10.5 million.
In accounts given to the Companies Office, Microsoft reported revenue of $54.1 million, up from $43.6 million in the previous financial year.
Restrained spending on software affected the industry during the financial year to June.
But Microsoft, whose products such as Windows, Office and SQL Server are on the vast majority of computers, lifted its revenue with a software licensing scheme that commits companies in advance to buying software upgrades through an annual fee.
The scheme, known as Software Assurance, came into effect in 2001.
The introduction of Microsoft's gaming console, the Xbox, will also have boosted revenue but not necessarily profit.
Microsoft received a foreign investor tax credit of $2.6 million and paid tax of $5.9 million.
It reduced bad and doubtful debts down from $37,500 in the 2002 financial year to $7900.
The company has accumulated profit in New Zealand of $17.4 million.
The results precede a raft of new software products going on sale in the second half of this year.
Software Assurance will have a "revenue-smoothing" effect, because income from software licence fees is booked as it is received.
The scheme initially angered Microsoft customers, but it has achieved the desired effect of moving more users to operating systems such as Windows 2000 and Windows XP, the latest version of the operating system.
Early in the new year, Microsoft will end support for Windows 98, still a widely used operating system.
In Australia, Microsoft has reported after-tax profit of A$30.2 million for the year to June on revenue of A$261.5 million, up 14 per cent from the previous year.
Microsoft makes money in quiet times
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