# RKN - Reckon Limited



## bloomy88 (15 March 2009)

Been doing a bit of research on RKN lately and noticed that there is no thread for it currently.

RKN own QuickBooks, Quicken, ReckonElite and APS which are accounting software. Quicken focuses on small to medium businesses and APS is used i large scale corporate firms.

RKN haven't suffered to much in the current economic climate, their SP is currently $1.08 compared to their 52 week high of $1.33. At $1.08 their yeild is around 6% fully franked.

As a long term hold i think that they can represent a solid purchase considering there will always be a need for accounting software and RKN is continuing to improve their products. At the moment they are effectively in an oligopoly with MYOB for the small to medium business software.

Just wondering if anyone else had any thoughts on them?

Thanks in advance for any comments


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## oldblue (15 March 2009)

I've held a few RKN for about 3 years now and they're around what I paid for them. Not exciting but not a bad performance considering the market of late.
At a P/E of over 12 they're not exactly cheap but a reasonable yield and probably a good defensive stock in the circumstances. Given a better market I would probably be looking to quit them for something with better growth prospects but for the meantime I'll hold.


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## bonkerrs (9 February 2010)

RKN announced their dividend and timetable for it today.

Declaration of dividend: 09.02.2010
Trading Ex: 15.02.2010
Record Date: 19.02.2010
Payment date: 05.03.2010

If I sell my shares in the next couple of days (before 15.02.2010) will I still be entitled to the dividend?


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## peterh (9 February 2010)

bonkerrs said:


> RKN announced their dividend and timetable for it today.
> 
> Declaration of dividend: 09.02.2010
> Trading Ex: 15.02.2010
> ...




If you sell before the 15th you won't be entitled to the dividend. Not sure if you sell between the 15th and 19th.


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## oldblue (9 February 2010)

"Trading ex" means trading without the div, ie the buyer doesn't get the div from a trade on 15 Feb onwards. Before that date, the buyer gets the div.

But because it's not unknown for companies to change their timetables at short notice, I'd be inclined to check with my broker if I wanted to sell on 15th.


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## peterh (9 February 2010)

Oops, sorry about that, brain now out of neutral.

space fill, space fill, space fill, space fill, space fill


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## bonkerrs (9 February 2010)

Again... thanks Oldblue!!
space fill - love the space fill trick space fill - love the space fill trick space fill - love the space fill trick  space fill - love the space fill trick  space fill - love the space fill trick


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## oldblue (10 August 2010)

A good result from RKN.

NPAT up 44%, higher interim dividend of 3.5 cents.

I'm holding.


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## robusta (22 March 2012)

I like to look at the daily loosers and the 52 week lows, RKN down almost 10% today got me interested. Considering they will loose the right to distribute Quicken & Quickbooks in a few years I think they may be on the 52 week low list soon.

Not sure what % of the business these products are but I think the fundamentals of this business will change dramatically.


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## McLovin (22 March 2012)

robusta said:


> I like to look at the daily loosers and the 52 week lows, RKN down almost 10% today got me interested. Considering they will loose the right to distribute Quicken & Quickbooks in a few years I think they may be on the 52 week low list soon.
> 
> Not sure what % of the business these products are but I think the fundamentals of this business will change dramatically.




This agreement has changed?

ETA: I missed today's announcement. It doesn't really change much from first glance. The 2010 agreement seemed to be leading that way. If anything it seems to open them up to their cloud offering, which as a user, I can say is excellent.


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## robusta (22 March 2012)

2015 I think, you will have to look up today's announcement. I looked very close at buying this one a while ago. Glad now my price was not met.


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## McLovin (22 March 2012)

robusta said:


> 2015 I think, you will have to look up today's announcement. I looked very close at buying this one a while ago. Glad now my price was not met.




I think you might have to double check this. I will tomorrow, but this could actually provide a good price to buy RKN. And yes, I have looked at them in the past but also found them too pricey.

I'm not thinking this is bad news.


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## ROE (22 March 2012)

55% of their revenue comes from intuit products 
30% margin so a big drop in future profit if they cant find replacing revenue stream to plug the gap.


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## McLovin (22 March 2012)

ROE said:


> 55% of their revenue comes from intuit products
> 30% margin so a big drop in future profit if they cant find replacing revenue stream to plug the gap.




They are not losing their Quicken products (which are closer to 35% of revenue), the agreement is ending. So they will have:

1) No more royalties to pay

2) The right to continue using and developing the then (end of 2014) current version of Quickbooks and Intuit products for 100 years.

The amount paid in royalties can instead be used to further develop their own product. In many ways their business is moving away from reselling Intuit product to providing a cloud based accounting platform. 

This is just my initial theory. I could be well off the mark.


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## robusta (22 March 2012)

Ok, you may be right, wonder if they can keep the same product name and more importantly the current customers?


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## McLovin (22 March 2012)

robusta said:


> Ok, you may be right, wonder if they can keep the same product name and more importantly the current customers?




I think the average SME owner would rather a trip to the dentist for root canal than having to switch accounting systems.

It's a big part of the attraction of this business to me. Customers are very sticky and they're moving to a subscription business model.


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## skc (23 March 2012)

McLovin said:


> I think the average SME owner would rather a trip to the dentist for root canal than having to switch accounting systems.
> 
> It's a big part of the attraction of this business to me. Customers are very sticky and they're moving to a subscription business model.




For that same reason though the stock has always been way too expensive for me. PE ~20 with pretty average yield ~3-3.5%.


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## McLovin (23 March 2012)

skc said:


> For that same reason though the stock has always been way too expensive for me. PE ~20 with pretty average yield ~3-3.5%.




Oh I agree. Give it to me at half price, thanks.

Have to wait and see. Market is reading this wrong, I think.


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## ROE (23 March 2012)

This easy revenue will dry up
Right now if you want to buy intuit product you have to go via Reckon in Australia

Once this agree is up anyone can sell and support intuits, you be competing with everyone else for the sale and support and on price....

so their easy re-occurring money in support and upgrade would be gone, to what extend it hard to fathom until the license expire and they came out with another year of financial report...

The cloud based products, there is a  lot of noise but most people are not willing to save their data on someone else servers especially clients and financial data.

this is a high risk stuff, if I run a small accounting firm or business no fricken way I put my data on the cloud where every hackers out there can have ago at getting those data.

Need to be a lot cheaper than the current price...

And taking about Royalties saving, you got to make money to pay royalties 
so saving mean nothing if you dont make the sales. so taking about saving in royalties is just a spin.

it's like comparing someone who pay 30% tax and make money and the guy pay zero tax because they not making money...


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## McLovin (23 March 2012)

ROE said:


> The cloud based products, there is a  lot of noise but most people are not willing to save their data on someone else servers especially clients and financial data.
> 
> this is a high risk stuff, if I run a small accounting firm or business no fricken way I put my data on the cloud where every hackers out there can have ago at getting those data.




Similar arguments were made about internet banking and using credit cards online about 15 years ago. Every accounting office uses the internet to lodge tax returns, download client banking data etc. This is hardly evolutionary stuff.

The biggest risk is around the CAPEX requirements of maintaining your own code. And whether not paying royalties will offset that.

Deutsche has upgraded Reckon on the announcement and Macquarie has downgraded them. I guess no one really knows.


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## robusta (24 March 2012)

Here is another view on recent developments.

http://www.fool.com.au/2012/03/investing/reckon-intuit-deal-comes-to-an-end/

For me I think wait and see...


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## ROE (24 March 2012)

McLovin said:


> Similar arguments were made about internet banking and using credit cards online about 15 years ago. Every accounting office uses the internet to lodge tax returns, download client banking data etc. This is hardly evolutionary stuff.
> 
> The biggest risk is around the CAPEX requirements of maintaining your own code. And whether not paying royalties will offset that.
> 
> Deutsche has upgraded Reckon on the announcement and Macquarie has downgraded them. I guess no one really knows.




Cloud Argument is no way similar to Internet banking and credit card

With cloud you basically put your data in someone else hand where as credit card and Internet banking, the banks already has that data you just use Internet 

And with business it is not just your data, it is also clients data these stuff is much more sensitive than your credit card details.

I work in IT when it comes to put data on the cloud, the answer is usually no.
You lose control of your data and data is everything in business..

Cloud is good for hosting stuff that doesnt involve storing sensitive data....you can't applied a blanket cloud to everything, you look at iCloud with apple products, it is free and I myself don't use it and so are all the people I know...

I have more control of my data when it is in my hand alone

Don't care what analyst think - I myself won't touch any where near this price
High execution risk and maintain your own code isn't cheap and it doesn't guarantee return so need massive margin of safety.

Also do this mob owns their own data center? If not that is risky as hell running a cloud
Because you at the mercy of data centre operators you pay what the hell ever they charged else find some where else and moving data centre is Extremely complex task


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## McLovin (24 March 2012)

ROE said:
			
		

> Cloud Argument is no way similar to Internet banking and credit card
> 
> With cloud you basically put your data in someone else hand where as credit card and Internet banking, the banks already has that data you just use Internet




Internet banking is putting your data on the cloud, isn't it?



			
				ROE said:
			
		

> Don't care what analyst think - I myself won't touch any where near this price
> High execution risk and maintain your own code isn't cheap and it doesn't guarantee return so need massive margin of safety.




I agree.


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## ROE (27 March 2012)

McLovin said:


> Internet banking is putting your data on the cloud, isn't it?
> I agree.




Well sort off ... let see if I can explain another way..

you got a bank account right? the banks has this information on their computers regardless of you internet bank or not .. Internet bank just open another avenue for
you to bank and expose your data to data theft ... if you don't internet banking

people can still break into banks computer and steal data....anyway this isn't the issue
because most credit card and banks has insurance against fraud so it's fairly safe
I use it all the time.

Cloud infrastructure on the other hand, people want you to hand everything you got over to them......they maintain the software and data and do backup for you etc...
more reasons for them to charge you more because you lose control...

this data used to sit on your little cabinet some where or your office computers 
it is now on someone servers...I don't want to do that if  I got business data I don't want anyone to see I want to keep it on my computer and only I have access to it...

Once I give that away I lose control of the data, I dont know who else has access to it
and how they can use to manipulate it or against me etc...

I'm sure the cloud operators will have security and check and balance in place to safeguard it but still it is one of those things I would never give it away regardless...

but that me personally anyway


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## oldblue (17 October 2012)

At $2.40 RKN is back to around March SP levels. Should we conclude that the revamped business is going well or is this just  market effect - the rising tide lifting all boats?


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## Klogg (17 October 2012)

oldblue said:


> At $2.40 RKN is back to around March SP levels. Should we conclude that the revamped business is going well or is this just  market effect - the rising tide lifting all boats?




Based on that, the market thinks its going well.

If there aren't any announcements or any pieces of information released by the company to this effect, then its all just speculation.


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## oldblue (17 October 2012)

Klogg said:


> Based on that, the market thinks its going well.
> 
> If there aren't any announcements or any pieces of information released by the company to this effect, then its all just speculation.




I'd like to believe that but experience shows that many significant market moves - in all markets - are often precipitated by "well-informed" buying/selling.


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## So_Cynical (9 February 2014)

robusta said:


> (22nd-March-2012) I like to look at the daily losers and the 52 week lows, RKN down almost 10% today got me interested. Considering they will loose the right to distribute Quicken & Quickbooks in a few years *I think they may be on the 52 week low list soon*.
> 
> Not sure what % of the business these products are but I think the fundamentals of this business will change dramatically.




In May 2012 the SP did find bottom and establish a new 52 week low before an amazing recovery (see chart below) on Friday a new 52 week low was established and that caught my interest, having a look at the 5 year chart i was surprised to see Fridays new low was in fact a 182 week low  and that of course meant that i had to spend the next hour or so finding out why.

There seems to be a fundamental shift occurring in the accounting industry with new cloud based player Xero kicking heads and taking market share while MYOB and Reckon are playing catchup, Reckon's old partner Intuit will be launching a cloud product in 2014 as will Reckon and MYOB.

Reckon in particular are in a real transitional phase with the Intuit relationship at an end and the transition to subscription rather than outright licence sales, perhaps an opportunity for a low cost entry, perhaps an opportunity to buy into a sinking ship :dunno: i will certainly watch with interest.
~


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## So_Cynical (31 March 2014)

At last my 3 week old buy order was completed today, impatience got the better of me and i moved my bid up from 2.01 to 2.04 resulting in me having a 2.04 parcel to add to my 2.01 parcel from 3 and a half weeks ago...interesting to see a bottom forming over the last 3 and a half weeks, have noticed 3 or 4 times how the sellers simply were outnumbered by buyers, however not so today.


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## oldblue (1 April 2014)

Well done, S_C!

RKN up another 6c today and sellers looking thin on the ground. Not a lot of volume - but then it's not normally a heavily traded stock.

Disc: I hold a small parcel.


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## robusta (18 August 2014)

Not happy with this business, I'm not an investor but have been using their software for the last three years. Recently purchased an Apple computer only to discover the software is not compatible and will probably never be.


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## So_Cynical (18 August 2014)

robusta said:


> Not happy with this business, I'm not an investor but have been using their software for the last three years. Recently purchased an Apple computer only to discover the software is not compatible and will probably never be.




Reckons new cloud based offering will fix that.  from only $5 per month.

http://www.reckon.com/au/business/one/


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## robusta (18 August 2014)

So_Cynical said:


> Reckons new cloud based offering will fix that.  from only $5 per month.
> 
> http://www.reckon.com/au/business/one/




Don't think it will do the trick for me. looks like it's aimed at businesses with no provision for investments. I may have to start again and loose all that history.


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## skc (18 August 2014)

robusta said:


> Don't think it will do the trick for me. looks like it's aimed at businesses with no provision for investments. I may have to start again and loose all that history.




Have a look at this http://www.sharesight.com.au/pricing/

Free portfolio for less than 10 holdings. Or $25 per month for 3 portfolios and unlimited holdings.

I especially like the auto features... auto broker email forward, auto dividend etc.


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## robusta (18 August 2014)

skc said:


> Have a look at this http://www.sharesight.com.au/pricing/
> 
> Free portfolio for less than 10 holdings. Or $25 per month for 3 portfolios and unlimited holdings.
> 
> I especially like the auto features... auto broker email forward, auto dividend etc.




Thanks for that skc, I will look into them. I've also been looking at these guys.
http://www.thequickenkiller.com/iba...6_o23S51ryCnpRg3gvTbJUmHsR60a9UJz8aAlwX8P8HAQ


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## oldblue (19 October 2015)

From this morning's "Markets live".


10:04am: Back before New Zealand's Xero was a noisy but fast growing upstart and when $2 billion sounded like a lot of money to pay for MYOB, Reckon was the accounting software sector's great hope for small cap fund managers. 

The theory was always that Reckon, which provides desktop and cloud-based business management software under the Reckon Accounts brand, would be acquired by its then-$US20 billion United States backer Intuit. 

That all fell apart when Reckon stopped distributing Intuit's Quicken/QuickBooks products in February 2014 and eventually bought back the US giant's 11.5 per cent equity stake later that year. 

Since then, Reckon has faced life on its own. Its shares have traded at and around the $2 mark and more attention has been directed at its noisy - and sometimes quarrelsome - rivals Xero and MYOB, which are now both worth more than $2 billion. 

Brokers have flicked the stock into the "hold" basket and small cap fundies have started digging elsewhere. 

However, the AFR's Street Talk column understands Reckon's hasn't gone unnoticed by at least one potential suitor. The company - headed by straight-shooting chief executive Clive Rabie - has a steady recurring revenue stream and is working on the rollout of an online model, Reckon One. 

Sources said Reckon had been approached by a private equity or trade player in recent times and the company had turned to Macquarie Capital for some advice and defensive support. Aside from MYOB and Xero, Wolters Kluwer Australia's CCH could also run the ruler over Reckon's assets. 

Perpetual Investments would loom as a key voice in any deal. The fund is a long-time supporter of the stock and retains a 15 per cent stake. Other major backers include UK-based Highclere International Investors, which also holds stakes in Australia's Webjet and Orotongroup, along with UniSuper and Rabie, who owns almost 10 per cent.

None of these investors would be expected to part with their stock for much less than $2.50 a share, which would value Reckon at almost $300 million. 

Interestingly, Reckon had independent expert Grant Thornton value the business 16-months ago when it selectively bought back Intuit's stake. Grant Thornton valued the company at $2.05 to $2.15 a share, which represented about 6.5-times one-year forward earnings before interest, tax, depreciation and amortisation.  


Read more: http://www.theage.com.au/business/m...ac-returns-20151018-gkc95c.html#ixzz3oxtAFWQg 
Follow us: @theage on Twitter | theageAustralia on Facebook


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## oldblue (21 October 2015)

Reckon confirms talks with Macquarie Capital.

http://www.afr.com/technology/reckon-confirms-talks-with-macquarie-capital-20151019-gkcjsj


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## ThirtysixD (29 October 2015)

52 week high

Rumor seems to have some legs?

I bought back at 1.90 as it was really cheap had the potential to grow. Estimated FV to be around 2.50


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## oldblue (29 October 2015)

ThirtysixD said:


> 52 week high
> 
> Rumor seems to have some legs?
> 
> I bought back at 1.90 as it was really cheap had the potential to grow. Estimated FV to be around 2.50




I "reckon" so!

Too many articles to that effect in the AFR in recent times for there not to be some fire with the smoke! The latest I saw, though, had one of the potential buyers, a British company, apparently deciding not to proceed with an offer.


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## So_Cynical (6 July 2017)

This in specie distribution seems silly - why do i want to hold a London listed stock?

https://www.reckon.com/au/investors/market-announcements/

Its a pain in the ass, and now they want us to fund the spin out via a rights issue..seriously?


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## skc (6 July 2017)

So_Cynical said:


> This in specie distribution seems silly - why do i want to hold a London listed stock?
> 
> https://www.reckon.com/au/investors/market-announcements/
> 
> Its a pain in the ass, and now they want us to fund the spin out via a rights issue..seriously?




Yeah it's an odd deal. The document management business is growing (indeed it represents most of the group's growth) and profitable (before corporate cost allocations) but that kind of leave the headstock with little prospect. Add in the fact that it's a bit subscale and to be listed on the AIM... 

RKN _reckons _most of the revenue from the spinoff are generated overseas - but so are dozens of ASX listed companies who ply their trade abroad. A listing on the ASX would have been much more accessible for the shareholders.


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## Country Lad (5 November 2019)

Looks like the downhill slide may have stopped and the fundamentals improving somewhat.  My favourite P&F pattern and all pointed to a breakout yesterday.  Bought at open today, better than a Cup bet I *reckon*.


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## RobL (5 November 2019)

The stock price hit a 52 week high today of AUD 0.890 on above-average volume. The 30-day average volume is 44,875 shares. The stock price range is from AUD 0.065 in September 2001 to AUD 2.740 in April 2011. The next resistance level is AUD 0.962 and then AUD 1.189.

Disclaimer:
This information is for general information only and should not be used solely to base trading or investment decisions. Please do your own research.

Here https://decentralisedwealth.com/QualityTradeIdeas.html  you can find links to the company’s web-site, fundamental and technical analysis. Databases for other Australian and US stocks of interest are also available.


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## Dona Ferentes (30 June 2021)

Reckon Limited notes the movement this morning in the Reckon share price and the volume of shares traded. .... up 20% to 94c

Reckon also notes the release this morning of the announcement of *Novatti Group Limited (NOV) *declaring its intention - subject to a capital raising - to acquire an equity interest in Reckon of at least 15% of the Reckon shares on issue, at a price of $1.00 per share.

_Reckon Limited had no prior notice of this proposed acquisition until the release of the Novatti announcement. _


*from NOV : * _Under the share purchase agreements, Novatti will acquire the Strategic Stake at a price of $1.00 per Reckon share from institutional investors for a total amount of approximately $17 million (representing approximately 17 million Reckon shares). _


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## Dona Ferentes (19 May 2022)

and going for a run today; from 87c to $1.28 on news

_Reckon signs agreement to sell Accountants Practice Management Group for $100 million  _

*Highlights *

_▪ All-cash sale for $100 million of Accountants Practice Management Group to The Access Group, subject to regulatory approvals in Australia 
▪ Board and management believe the Transaction represents good value for shareholders relative to the market capitalisation of the Company 
▪ Purchase price represents a 4.6x multiple of FY21 revenue and 8.4x multiple of FY21 EBITDA for the Accountants Practice Management Group 
▪ Following completion, Reckon plans to return the majority of proceeds, net of taxes, to shareholders via a special dividend. 
▪ Post transaction Reckon would comprise the Business Group and the Legal Practice Management Group, which together generated ~$50 million of revenue and EBITDA of ~$17 million in FY2021, representing ~70% and ~60% of Reckon’s pre-Transaction revenue and EBITDA respectively 
▪ Management is excited to focus on the remaining businesses and believe Reckon is well positioned to take advantage of the strong global market opportunities that exist for both divisions, with its expanding cloud product set  _


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## divs4ever (19 May 2022)

am still currently down 1.1% on it 

 maybe i should watch it tomorrow  and see if i can make a small profit on it ( since i missed $1.35 today )


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## divs4ever (1 August 2022)

Sale of Accountants Practice Management Group Completed
Reckon Limited (“Reckon” or the “Company”) (ASX: RKN) is pleased to advise that it has completed the sale
of the Accountants Practice Management Group to Access Software Australia Pty Ltd, Access Workspace NZ
Limited and Access UK Ltd (“Access Group”) in an all-cash transaction valued at $100 million (the
“Transaction”) (refer ASX announcements: 20 May 2022, 14 June 2022, and 20 June 2022).
Reckon will continue working with the Access Group under a temporary transitional services agreement to
ensure an efficient and successful handover for all assets, staff, clients, and employees.
The Company intends to deliver the majority of proceeds from the Transaction to shareholders via a partially
franked special dividend. Additional details of the proposed special dividend will be released as Reckon
finalises the completion accounts, determines taxes payable, and completes other aspects associated with the
Transaction. Additional funds from the Transaction will be used to repay a portion of debt, which will
considerably strengthen the Company’s balance sheet.
Reckon now has two operating divisions: The Business Group, which provides accounting and payroll software
for small to large sized business and personal wealth solutions, and the Legal Practice Management Group
that focuses on practice management and workflow solutions to law firms predominantly in the USA and United
Kingdom, with re-sellers in other parts of the world.
Both divisions will benefit from Reckon’s ongoing investment in product development and the introduction of
new, unique cloud-based offerings to underpin growth in customer numbers, and ensure continued high
retention rates are maintained.
Reckon’s half year results will be released on Tuesday 9 August 2022, where the company will provide a
trading update as well as share key strategic goals for the continuing business.
Reckon Group CEO, Mr Sam Allert said:
“Reckon is now well placed and very well funded to focus on and continue investing in its two core operating
divisions. The Business and Legal Groups represented circa 70% of Reckon’s revenue and approximately
60% of the Company’s EBITDA prior to the transaction and have considerable scope to grow.”
“Now that the transaction has completed, Reckon will prepare the completion accounts and finalise taxes
payable, allowing the Board to provide details of the proposed special dividend.”
“We look forward to releasing our half year results next week, and talking about our exciting and focused
future.”
AUTHORISED FOR RELEASE BY THE BOARD OF DIRECTORS OF RECKON LIMITED


=============================================================================================

DYOR

i hold RKN


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## divs4ever (1 August 2022)

am still down 1.5%  on this


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## divs4ever (9 August 2022)

Reckon delivers strong HY results underpinned by growth in
continuing operations
Financial highlights (total group):
• Normalised NPAT of $6m, up 5% on the prior corresponding period (PcP)
1
• Normalised EBITDA of $18m, a 6% increase on PcP
• Normalised revenues of $39m, up 2% on PcP
• Annual recurring revenues (ARR) of $36m, marking a 5% increase on the PcP
• Fully franked interim dividend of $0.03 per share
Financial highlights (continuing operations):
• Normalised NPAT of $4m, up 8% on the prior corresponding period (PcP)
• Normalised EBITDA of $11m, a 6% rise on PcP
• Normalised revenues of $27m, up 2% on PcP
• Annual recurring revenues (ARR) of $24m, a 6% increase on the PcP
1 NON- IFRS: Growth has been normalised and is on a constant currency basis as set out in the Additional
Information table. This applies to all results in this announcement.
Sale of Practice Management Accountant Group:
• Sale of the Practice Management Accountant Group to The Access Group for a cash
consideration of $100m, an 8.4x multiple of FY21 EBITDA for the operating division
• Additional partially franked special dividend of between $0.54 and $0.58 is expected to be
declared from sale of the Accountants Group division, subject to finalisation of completion
accounts, tax payments and other aspects of completion
Operational highlights:
• Reckon now fully focused on advancing growth across its Business and Legal Groups through
ongoing investment and launch of new cloud products and other cross selling opportunities
• R&D spend of $11m, underpinning continued growth in cloud-based products
• Agreement with ASX-listed payments company Novatti (ASX: NOV) for launch of an integrated
payments solution
Reckon Limited (“Reckon” or the “Company”) (ASX: RKN) is pleased to report strong financial and operational
performance for the six-month period ended 30 June 2022 (H1 CY2022).
Group Net Profit After TAX (NPAT) from continuing operations was $4m on a constant-currency basis, a 8%
uplift on the previous corresponding period (PcP). Earnings Before Interest, Taxes, Depreciation and
Amortisation (EBITDA) from continuing operations was $11m, a 6% uplift on the PCP.
First-half highlights included the $100m cash sale of Accountants Group division (refer ASX announcement: 1
August 2022), with strong revenue and earnings growth across the Company’s remaining operating divisions.
Proceeds of the sale are expected to fund the payment of a partially franked special dividend of between $0.54
and $0.58 to shareholders as well as reduce a portion of the Company’s debt.
Momentum in the first half from continuing operations was underpinned by growth in subscription revenue in
the Company’s remaining two divisions; Small Business (accounting and payroll solutions for SMEs) and Legal
(practice management and workflow for law firms).
Group revenue from continuing operations was $27m, up 2% on the PcP, with recurring subscription revenue
accounting for 90% of total revenue.
The Business Group recorded H1 subscription revenue of $19.9m, up 6% on PCP. The integrated payments
solution with Novatti, which holds a 19.9% stake in the Company, is also expected to create additional revenue
opportunities for the Business Group.
The Legal division recorded H1 subscription revenues of $4.4m (up 5% on the PcP) and further established
its footprint in the US market, where its customer base includes five of the world’s largest law firms.
Management commentary:
Reckon Group CEO, Mr Sam Allert said: “The half-year report is reflective of strong execution across the
Company’s product suite. Operational highlights for first half 2022 were led by the $100m all-cash sale of the
Accountants Group division, along with consistently strong results from the Group’s continuous operations.
With an established market footprint for our Small Business payroll solutions and Practice Management
platform for legal services, Reckon has built a platform for sustainable growth underpinned by a strong balance
street and subscription-based revenue model.”
Segment performance (continuing operations):
Business Group
• H1 revenues of $21.9m (up 3% on PcP),
• Comprising 91% subscription revenue, with over 400,000 employees now paid via Reckon software
• EBITDA increased to $12.3m, an 6% increase over PcP
• Cloud revenue up by 9% on PCP, representing 52% of the divisions HY revenue
• Continued growth across our cloud and mobile payroll solutions, with integration of Novatti payments
solution expected to support H2 CY2022 sales growth
Practice Management – Legal Group
• H1 subscription revenues of $4.4m, up 5% from PcP
• Continued investment in cloud-based software services and sales capability
• Opportunity to introduce cloud practice management suite for law firms still largely using desktop software
• Reckon retains 70% of division with incentives for US management to increase equity through revenue
milestones
• US$5m committed to fund growth via combination of cash and loans

DYOR

i hold RKN


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