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Reckon posts full-year results, bullish on MYOB deal

Technology

Reckon has announced modest figures for its 2017 financial year as it seeks to break free from fellow competitors by focusing on product diversification in 2018.

By Jotham Lian 11 minute read

The ASX-listed company posted a loss in net profit after tax, going from $11 million in FY16 to $7.6 million in FY17.

Reckon announced a 1 per cent increase in both revenue and earnings before interest, tax, depreciation and amortisation, with its business division posting $35.9 million in revenue in FY17, up from $35.5 million in FY16.

The accounting software provider now has subscription revenue of $67.9 million, an increase of 6 per cent over FY16, with subscription accounting for 75 per cent of its total revenue of $90.3 million.

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It took a hit in revenue, going from $14.1 million in FY16 to $13 million in FY17, with Reckon's chief financial officer attributing it to a raft of contracts being “moved into the new year” on top of a “very strong 2016” result.

Reckon chief executive Clive Rabie was particularly optimistic, telling Accountants Daily that it had achieved on its guidance by delivering shareholder value through the demerging of its document management division and the $180 million sale of its accountants practice management division to MYOB in 2017.

“We had a strategy to max shareholder value and the first time we did was in demerging the document management business and that's now floating on AIM and is valued at $31 million,” said Mr Rabie. 

“Second of all, we sold the accountants practice management to MYOB and that deal is ongoing and we are waiting for the regulatory authority approvals.

“Both deals in 2017 have resulted in a considerable uplift in shareholder value and has supported our long-held view that the sum of parts was always worth more than the whole.”

Mr Rabie was also keen to reiterate his stance on differentiating Reckon from its competition, although he remained mum on the specifics.

“We're not trying to do what Xero, MYOB or Intuit is doing; we're trying to do something different in every respect,” said Mr Rabie.

“We don’t want to just be small business accounting software and compete against our competitors, we have got other products that will be coming, that we will be announcing through this year but we only intend to do that after we have completed the MYOB deal and we'll start to look at some form of diversification from what we're currently doing to bring other opportunities into our business. 

“We did it once before when we bought APS and our accounting practice management division and now we intend to do a similar thing with our business division.”

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Jotham Lian

Jotham Lian

AUTHOR

Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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