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The accounting software provider has delivered an increase in profit and subscribers despite a flat year of revenue growth.
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Reckon posts flat revenue, increase in subscribers
19 February 2020
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Reckon’s results for the 12 months ended 31 December 2019 showed a 5 per cent increase in its net profit to $8.1 million.
However, total group revenue for the year remained flat at $75.4 million.
Revenue growth was impacted by the Practice Management Accountant Group, which posted a subscription revenue loss of 4 per cent at $22.4 million, as it continues to feel the effects of its aborted sale to MYOB in 2018.
Total revenue for the division fell by 7 per cent to $27.4 million from $29.4 million.
In contrast, Reckon’s Business Group had a subscription growth of 38 per cent in users for cloud products, pushing a 6 per cent increase in revenue for the second half of 2019.
This resulted in a 9 per cent year-on-year growth in cloud revenue, with cloud revenue accounting for 47 per cent of the division’s available revenue.
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Subscription revenue was reported as $29.6 million, a 7 per cent increase from $27.8 million the previous year.
The Business Group’s white label partnership with the Institute of Public Accountants (IPA) was also extended for another five years.
Reckon’s Legal Group is “well underway” in transitioning from an upfront sales model to a subscription model.
The division posted a 7 per cent increase in subscription revenue for the year, up to $9 million from $8.4 million.
The Legal Group had an overall 9 per cent increase in revenue for the year.
Reckon chief executive Sam Allert sounded a positive note for 2020, pointing towards the impending launch of APS’ new cloud suite and the extension of mobile capabilities across the business.
“While 2018 was a year centred on creating stability and certainty, 2019 has been a year of transformation and overall progress,” Mr Allert said.
“For 2020, we expect to pick up momentum as our cloud and subscription growth strategy continues to accelerate.”
The company reported a $7 million reduction in debt for the year and a fully franked final dividend of 2 cents per share, taking the total dividend to 5 cents per share.
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