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PRESS RELEASE<\/strong><\/p>\n Group revenue up 2% as Reckon reveals plans for 70% stake in SaaS developer, Zebraworks<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.16″ global_colors_info=”{}”][et_pb_row _builder_version=”4.16″ width=”60%” width_tablet=”75%” width_phone=”90%” width_last_edited=”on|desktop” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ pac_dcm_carousel_specific_module_num=”0″ global_colors_info=”{}”][et_pb_text admin_label=”Copy paste body text here” _builder_version=”4.16″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}”]<\/p>\n SYDNEY, Australia \u2013 11 August 2020<\/strong> \u2013 Reckon Group (ASX:RKN) today reported its half year earnings to 30 June 2020, delivering steady profitability that demonstrates organisational resilience in a year shaped by global economic disruption. The Group\u2019s capacity for future growth is further underscored by a merger with US start-up Zebraworks, a software-as-a-service (SaaS) practice management provider for mid-sized legal firms.<\/p>\n Despite widespread economic disruption caused by COVID-19, Reckon\u2019s revenue for the first half of 2020 was up by 2% over the previous corresponding period. Cashflow continually improved in the year, enabling a debt reduction of $6 million and a fully franked final dividend of 3 cents per share (2019: 3 cents). Quality of revenue continues to improve for Reckon, with subscription representing 95% of available revenue for the Group. Overall, total Group revenue closed at $39.8 million and EBITDA stood at $17.1 million.<\/p>\n Reckon\u2019s reliable growth in the first half of 2020 is underscored by its announcement of a 70% stake in US company Zebraworks, which saw the Group\u2019s Legal division merge with the start-up on 1 August 2020 to form Nqueue Zebraworks. Reckon has committed US$3 million to funding Nqueue Zebraworks\u2019 growth up to the end of 2023, subject to performance, with a further loan of US$2m which could be made available if required.<\/p>\n Reckon Group CEO Sam Allert praised the Zebraworks team for its successful track record in developing and distributing legal practice management software to the US legal industry. \u201cZebraworks\u2019 proven team will help Reckon execute on our considered future strategy for the Legal Group, which is to harness our significant tech expertise to grow our footprint in the legal practice management industry, both in the US and globally. We are excited to execute on the potential for Nqueue Zebraworks in what is a substantial global market,\u201d said Mr Allert.<\/p>\n Nqueue Zebraworks is expected to leverage the Legal Group\u2019s existing infrastructure in the US and expand on this as the business grows over the coming years.<\/p>\n Reckon\u2019s steady profitability in the first half of 2020 was driven by the Business Group\u2019s robust performance. A 41% increase in cloud users powered a 23% growth in cloud revenue, which in turn drove a 6% overall revenue increase for the division, continuing a strong growth trend from the second half of 2019.<\/p>\n Reckon\u2019s focus on cloud and mobile has delivered the launch of two new products, providing longterm sustainable revenue opportunities. The Business Group launched a new paid payroll app for mobile in May 2020 which already has more than 2,000 users, with more mobile apps planned for launch throughout the second half of the year.<\/p>\n The paid payroll app\u2019s strong launch comes off the back of a free payroll app introduced in May 2019 which has seen 35,000 users processing over 520,000 pay runs since going live.<\/p>\n For the Accountants Group, the release of a major Cloud Workflow module, with further modules to follow over the coming year, is expected to widen the addressable market for the division and power future growth opportunities \u2013 particularly with evolving workstyles accelerating the adoption of cloudbased digital collaboration tools for remote workers.<\/p>\n Reckon Group CEO Sam Allert said the first half of 2020 saw Reckon prove the resilience and efficiency of its team, business infrastructure and business interruption processes.<\/p>\n \u201cWe have experienced an eventful six months and are seeing the fruits of a clear, multi-year strategy \u2013 one which has shaped a business with the resilience, agility and expertise to weather storms while continuing to reliably deliver growth and profitability for shareholders. The next six months and beyond will be a critical time as the world grapples with continued economic uncertainty, but we\u2019ve shown that our solid fundamentals, coupled with our vision, can and does continue to deliver through tough times,\u201d Allert said.<\/p>\nHalf Year Financial Results Reckon\u2019s multi-year plan yields continuous growth and merger with US start-up<\/h1>\n
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Steady growth delivered in extraordinary times<\/h3>\n
US acquisition sees Legal Group become Nqueue Zebraworks<\/h3>\n
Cloud and mobile strategy fuels growth<\/h3>\n