Home Listed Tech Reckon sky high over earnings, subscription growth

Reckon sky high over earnings, subscription growth

Accounting software provider Reckon is boasting cloud users totalling 47,000 and attributing its 2017 earnings to growth of subscriptions to 75% of the total group revenue or $90.3 million. 

The ASX listed Reckon (ASXA:RKN) today reported full year earnings to 31 December 2017, reporting underlying revenue and EBITA growth, an EBITDA margin of 37% and underlying expenditure on development costs reduced to 19%.

According to Reckon Group chief executive Clive Rabie, the guidance provided for the continuing operations for 2017 was achieved and the quality of shareholder value substantially improved.

Rabie said it had been a milestone year for the Reckon Group, with its Document Management Business demerged and listed on the AIM market of the London Stock Exchange, enabling Reckon to fuel further growth within key Business areas of Reckon One, Reckon Loans and Reckon Accounts along with its Legal Practice Management division.

In addition, Rabie said the sale of the Accountant Practice Management Group to MYOB for $180 million (subject to ACC/NZCC approval), would support the long-term strategy to offer small businesses a complete suite of cloud solutions and pursue opportunities in the legal market.

“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,” Rabie said.

“Reckon is in a strong position with exciting future growth opportunities for our Business division and Legal Practice Management division as we look to sharpen our focus on the small business solutions market through improved products, investment in technology, new market initiatives and partnerships.

“It has also been a record year for one of our connected services with the Reckon Loans platform (powered by Prospa) experiencing continued growth attributed to the upward trend of businesses increasingly turning to alternative non-bank lenders to gain access to critical finance.”

Rabie noted that during the year to 31 December, Reckon had actively supported the need for enhanced education across multiple software platforms to support those looking for a career in the finance sector, “through exciting strategic partnerships and its own training programmes”.

“Reckon has recently partnered with TAFE NSW and Open Colleges, giving access to Reckon One for bookkeeping students to support and develop the next generation of bookkeepers and accountants with the right foundation to successfully run a business.

“Within the Legal Practice Management division Reckon has heavily invested in establishing new product streams over the past few years, focusing on the scan market and opportunities created through the digitisation of documents.

“This commitment reinforces our ability to deliver world class software used by some of the leading legal firms across the globe. The early stage transition from an upfront purchase model to subscription only model has built an impressive customer reach. Reckon’s subscription-based revenue through the uptake of our cloud based services will strengthen  the quality of our overall revenue.

“As we take advantage of the opportunity for the market to recognise the true value of Reckon’s refocused business, we’re now in a position to capitalise on the improved quality of revenue for shareholders and reinvest in product development, sales and marketing to drive the business forward.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).