Tuesday, 14 February 2017 16:25

$70m in subscription revenues drives Reckon to new heights Featured

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Accounting software group Reckon has recorded a 13% growth to $70 million in subscriptions for the 12 months to the end of December last year, with cloud subscriptions now making up 82% of total revenues.

The listed (ASX:RKN) cloud accounting company reported overall group revenue of $97.8 million for the FY 2016 — up 7% from $91.4 million in FY15 — and solid profit growth on the back of increased subscribers.

The company also reported EBITDA of $35.3 million, which it says was at the higher point of full-year guidance, despite being affected by the exchange rate and business sold part way through 2016. The existing business EBITDA growth was 5%.

Reckon chief executive Clive Rabie says all areas of the business are performing well as a result of continued investment in development, sales and marketing initiatives for the company’s online business, document management and practice management products.

Reckon’s online business division user growth was 18% to reach 39,000 as its next-generation Reckon One solution — built in-house using Amazon Web Services — gained momentum, while document management revenue of $14.8 million was up 52% from $9.8 million in FY15, assisted by the acquisition of SmartVault.

According to Rabie, Reckon One is proving to be the best solution for the self-employed and small business market. “Our newly released Reckon Loans, powered by Prospa, (business lending product) is rapidly growing,” he said.

And, Rabie says acquisitions and strategic partnerships have also put the company in a “powerful position” to capitalise on the strong take-up of cloud accounting which, he says, has significantly increased Reckon’s subscriber base and positively impacted revenue growth.

“Reckon is a strong, stable and consistently profitable company with exciting future growth opportunities locally and overseas with good progress made in the competitive UK and US markets. We’ve executed our strategy and proved we can deliver on new market initiatives.

“During the year to 31 December 2016, Reckon continued its investment in growth and launched the new the payroll feature for the Reckon One platform in Australia which offers a game-changing pricing model and a smarter breed of online accounting software.

“Significant progress has been made towards achieving our development goals in 2016 as we enter the final year of above normal investment in our product suite. This reinforces our ability to deliver top quality and relevant technology to the largest accounting and legal firms in the world and business customers,” Rabie said.

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Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a 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).

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