Reckon enjoys solid growth as revenues hit $57 million
Aussie accounting software provider Reckon is reporting strong growth for the six months to June 2016, with revenues growing by 6% to hit $57 million for the half.
Reckon Group CEO Clive Rabie says the strong result reaffirms the company’s 2016 full financial year guidance while it continues to invest in new markets with high growth potential.
“All areas of our business are performing well and we are seeing our revenue and customer volume continue to increase,” Rabie says.
“In the first half we ramped up our geographic expansion for Document Management, launched Reckon One into the UK market and expanded on an already impressive customer list in Practice Management,” he explains.
Rabie says the focus for Reckon remains on volume growth, and entrenching itself as a subscription business, with strong online offerings and international reach.
According to the results, Reckon remains on track for EBITDA guidance having achieved $18.5m in the first half of the year. Existing business EBITDA growth was 5%, while an additional $4.6m was spent on sales and marketing initiatives for new markets which is expected to provide increased revenue growth for future years. A further $2.2m was spent on developing new products for these markets.
Rabie says following recent investment in Reckon One, SME take-up is gaining momentum.
“We are delivering on our strategic focus to bring low cost, premium online accounting software to millions of small businesses globally,” he says.
“The recent launch of Payroll in Australia has resulted in increased customer retention and growth.”
The Document Management business performed well, with revenue increasing 45%. Reckon now has over 48,000 paying customers, and over 560,000 users sharing documents through its online portal.
The results are on the back of strong new customer growth across all divisions, particularly in online products and subscription revenue, which grew by 16% to $36.3m.
Rabie says the company’s transition to a subscription model is now mostly complete, with 78% of available revenue now subscription based.
“We have a leading product range in a number of territories and a solid subscription business. Our international expansion has been validated and is showing 11% underlying growth,” says Rabie.
“Our results show that we are delivering on growing the size and quality of all our businesses,” he says.
“Reckon is well positioned to take advantage of substantial market opportunities,” Rabie adds.
“We have proven we are a future-focused growth company, built on a strong and stable business.”