[et_pb_section fb_built=”1″ admin_label=”Header” module_id=”header-plain” _builder_version=”4.16″ global_colors_info=”{}” text_orientation_phone=”center” text_orientation_last_edited=”on|desktop”][et_pb_row _builder_version=”4.16″ global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”0px||||false|false” pac_dcm_carousel_specific_module_num=”0″ global_colors_info=”{}”][et_pb_text content_tablet=”<\/p>\n
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PRESS RELEASE<\/strong><\/p>\n <\/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 15 February 2022<\/strong><\/p>\n \u2022 Normalised revenue of $71.3m, up 1.6% from $70.2m on the Prior Corresponding Period (PCP)1 \u2022 Seven new cloud-based products across all business divisions launched during CY2021 Reckon Limited (\u201cReckon\u201d or the \u201cCompany\u201d) (ASX: RKN) is pleased to report solid financial and operational performance for the 12-month period ended 31 December 2021 (CY2021).<\/p>\n Net Profit After Tax (NPAT) was $7.9m, a 7.8% increase on the PCP. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) were $29.5m, a 1.4% uplift on PCP and driven by ongoing adoption of the Company\u2019s cloud-based products, particularly through the Business Group. Rise in NPAT and EBITDA highlights Reckon\u2019s consistent growth trajectory and profitability.<\/p>\n Revenue increased 1.6% on PCP to $71.3m, with subscription based revenue across the Company accounting for $65.3m. The 2.9% rise in annualised recurring revenue was supported by strong operating cash flow of $30.9m (before development spend) from continuing operations and growth in cloud-users.<\/p>\n Investment into the development of cloud-based products, and continuing operations, continued for the fourth consecutive year from $18.8m in CY2020 to $20.2m in CY2021. The investment allowed Reckon to further enhance its existing offering and release seven new products across its three business groups during the period reinforcing the Company\u2019s ongoing commitment to cloud-based customer acquisition. The new products largely supported Reckon\u2019s high customer retention rate, added competitive advantage and unlock new large market opportunities across all business divisions.<\/p>\n Reckon\u2019s net debt position reduced by 52% from $30.7m to $14.7m. The decrease was due to a continued focus on capital management, and the sale of the Company\u2019s ReckonDocs business.<\/p>\n Given the Company\u2019s ongoing profitability and strong balance sheet, Reckon will reward shareholders with a fully franked dividend of $0.02 per share held, payable on 25 March 2022 for shareholders on the register on 23 February 2022. This takes the full year, fully franked dividend to $0.05 per share representing a 8% shareholder return before tax.<\/p>\n Reckon Group CEO, Sam Allert said:<\/strong><\/p>\n \u201cWe have continued to make progress in our transition from a stable on premise technology company to a cloud first technology company that remains profitable and cashflow positive. The Company\u2019s investment into cloud product development increased and has led to the further enhancements of our existing product suite and the launch of a number of new cloud products. This will allow us to continue our high customer retention and assist us in creating larger markets to sell new products and drive revenue.<\/p>\n \u201cWhile continuing on that transition journey, we again achieved strong results with revenue and profit both increasing. We continue to deliver dependable income streams to our shareholders with another fully franked dividend for the period. Our balance sheet has strengthened considerably, with solid operating cashflow helping us to aggressively pay down debt. All of which was achieved in a challenging market for SMEs and other corporates as the global pandemic entered its third year.<\/p>\n \u201cBoard and management are excited for the future in all business divisions. We have more cloud products in the market and will leverage our amazing team, client bases, and partners to continue year-on-year growth.\u201d<\/p>\n Business Group<\/strong><\/p>\n \u2022 Revenue increased by 4% to $39.9mReckon reports strong financial and operational performance for CY2021<\/h1>\n
Financial highlights<\/h2>\n
\u2022 Normalised EBITDA is up 1.4% to $29.5m from $29.1m in CY20201
\u2022 Normalised NPAT of $7.9m \u2013 a 7.8% increase on PCP from $7.4m1
\u2022 Normalised annual recurring revenue of $65.3m \u2013 a 2.9% increase on PCP $63.4m1
\u2022 Annual recurring revenue now 92% of total revenue
\u2022 Strong operating cashflow before development spend from continuing operations of $30.9m
\u2022 Net debt reduced by 52% to $14.7m from $30.7m in CY2020 despite $20m product development investment
\u2022 Stable growth continued despite challenging market conditions for Reckon customers
\u2022 Fully franked final dividend of $0.02 per share declared \u2013 takes total fully franked dividends for CY2021 to $0.05 per share<\/p>\nOperational highlights<\/h2>\n
\u2022 Continued product development investment allows for enhancement and new product launches, leading to customer retention and large new addressable market opportunities
\u2022 Accountants Group profitability improved by 3% to $11.9m
\u2022 Business Group cloud users increased 12% to 114,000
\u2022 Business Group revenue up 4% to $39.9m \u2013 highlights 3rd consecutive year of growth
\u2022 Business Group cloud-based revenue up 8% on PCP<\/p>\nManagement commentary<\/h2>\n
Segment performance<\/h2>\n
\u2022 Results highlight another consecutive year of growth
\u2022 Cloud subscription revenue rose to $21.4m \u2013 up 8% on PCP
\u2022 Subscription revenue is now 97% of group\u2019s total available revenue
\u2022 EBITDA up 4% on PCP to $20.4m
\u2022 Cloud users reached 114,000 \u2013 highlights annualised growth of 12%
\u2022 Three new cloud-based products launched \u2013 expected to underpin future revenue and user growth
Practice Management \u2013 Accountants Group
\u2022 Total revenue of $21.8m from continuing operations \u2013 a slight decrease on PCP
\u2022 EBITDA from continuing operations rose 3% on PCP to $11.9m
\u2022 Product suite remains entrenched with major customers
\u2022 22 new firms added as customers in CY2021 \u2013 majority secured in H2 CY2021 providing a solid order backlog for implementations in CY2022
\u2022 APS customers accelerating shift towards cloud products with 2,653 APS cloud users
\u2022 Sale of ReckonDocs business for $13m allowed Company to reduce debt and continue cloud focused transition<\/p>\n