Results presentation Year ended 31 December 2014. To be read in - - PowerPoint PPT Presentation

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Results presentation Year ended 31 December 2014. To be read in - - PowerPoint PPT Presentation

May 11, 2023 184 likes •379 views

Business Software for Accountants and Accounting Software for Businesses Results presentation Year ended 31 December 2014. To be read in conjunction with the Appendix 4E and the Accounts Reckon group The Business Group Develops and

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Results presentation

Year ended 31 December 2014. Business Software for Accountants and Accounting Software for Businesses

To be read in conjunction with the Appendix 4E and the Accounts

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pg 1

  • The Business Group

Develops and distributes accounting software solutions on either desktop, hosted or cloud platforms to small and medium sized businesses. It has over 300,000 active customers, and supports over 6,000 partners.

  • The Accountant Group

The supplier of choice in practice management software to accounting practices, with 4 out of the top 5 fjrms and over 1,000 larger practices using the comprehensive APS suite, comprising

  • f 73,000 seats across multiple modules. This division also services circa 7,000 practices using
  • ur Elite smaller practice management and tax solution or Reckon Docs company

secretarial solution.

  • The International Group

Is an industry leader in enabling business effjciencies for accountants, lawyers and business in general, ofgering a range of document management, portal, scan and cost recovery solutions to circa 2,000 clients globally.

Reckon group

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APS / SYNC DIRECT VIRTUAL CABINET RECKON ONE

ONE PROCESS ONLINE COLLABORATION & DOCUMENTS SAAS - ONE LEDGER

ACCOUNTANT SMALL / MED BUSINESS

SOFTWARE THAT CONNECTS

pg 2

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SLIDE 4

RECKON ONE

  • Most Afgordable in market (unique pricing model).
  • New User Experience and new features (including payroll)

launching soon.

  • Positive test-group feedback.
  • Launch imminent in UK.

RECKON ACCOUNTS HOSTED

  • Continual Growth.

APS

  • Sync Direct.
  • Private Cloud.
  • Continual roll-out of modules.

VIRTUAL CABINET

  • International expansion to US.
  • UK continual growth.
  • Australia continual growth through client base.

RECKON DOCS

  • Continual Growth.

LOTS OF OPPORTUNITY

pg 3

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SLIDE 5

XERO MYOB INTUIT RECKON OPPORTUNITY 2,000,000

  • No. of SME’s

1,000,000 500,000 CLOUD NOT CLOUD

AUSTRALIAN BUSINESS OPPORTUNITY

pg 4

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SLIDE 6

INTERNATIONAL OPPORTUNITY

New Zealand 0.45m 2m 4.3m 29m Australia United Kingdom North America

IN THE CLOUD

pg 5

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SLIDE 7

Strike a balance between profjt growth and investment into the business

  • EBITDA +10%, whilst:

Increasing investment in cloud infrastructure, sales capability and product development. Investing in the Reckon One launch in the UK and Virtual Cabinet into the USA.

  • EPS +11%
  • Operating cashfmow +18%

Volume growth

  • 4% unit growth in core Business Group products (online now represents 41% of those units).
  • 9% Growth in Practice management seats in the Accountant Group.
  • 10% unit growth in the Reckon Docs business.
  • 25% growth in Virtual Cabinet seats in the International Group.

Grow the subscription component of the group revenue to enhance further long term sustainability

  • 86% of Practice management revenue in the Accountants Group in now subscription (from 79% in 2013).
  • 62% of core Business Group units are now subscription (from 53% in 2013).
  • 78% of International group revenue is now subscription (from 76% in 2013).

Expand cloud capability and reach

  • Next generation Hosted product launched Q3 2014.
  • Reckon One launched in Q1 2014, with the next generation Reckon One product on the track for a Q2 release.
  • Reckon One launched in NZ in Q4 2014.
  • Reckon One UK launch expected in 2015.
  • Good progress on moving practice management to the cloud.
  • Stellar growth in Virtual Cabinet in the UK, Australia and NZ. USA expansion commenced.
  • Sync Direct gaining momentum.

Share buyback of Intuit shares - completed July 2014.

2014 achievements

pg 6

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Performance highlights

Year ended 31 December 2014

* Growth percentages exclude the impact of the profjt on sale of the investment in Connect2Field in 2013.

0% 2% 4% 6% 8% 10% 12%

UP 3% to $100.8m REVENUE UP 10% to $37.1m EBITDA* UP 5% to $17.6m NPAT* UP 11% to 14.2 cents UP 3% to 9.0 cents EPS* TOTAL DIVIDEND

pg 7

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2014

Growth

2013

Subscription product revenue

52.1m +11% 46.8m

Other recurring revenue

14.3m

  • 6%

15.2m

Upfront and service revenue

13.9m

  • 19%

17.2m

Content revenue

20.5m +9% 18.9m 100.8m +3% 98.1m

pg 8

Revenue growth

Year ended 31 December 2014

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1ST HALF $ Millions 2ND HALF $ Millions FULL YEAR $ Millions

2014 Operating Revenue 51.1m 49.7m 100.8m 2013 Operating Revenue 49.5m 48.6m 98.1m 2014 EBITDA 19.3m 17.8m 37.1m 2013 EBITDA 17.4m 16.5m 33.9m

pg 9

Reckon group

Year ended 31 December 2014 (normalised)

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REVENUE 2014 Growth 2013 Subscription product revenue 16.3m +12% 14.5m Other recurring revenue 14.3m

  • 6%

15.2m Upfront and service revenue 6.2m

  • 19%

7.7m 36.8m

  • 1%

37.4m EBITDA 19.1m +20% 16.1m +41% Subscription Online (32% in 2013) +21% Subscription desktop +32% Other recurring +6% Perpetual licences, etc

pg 10

  • Saving of $5m in Intuit royalty, partly re-invested some of the royalty saving in
  • nline infrastructure, sales capability and product development.
  • The business has been substantially de-risked.
  • Core product units now comprise:

Overheads Revenue

Business group results

Year ended 31 December 2014

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REVENUE 2014 Growth 2013 Subscription product revenue 22.3m +9% 20.4m Upfront and service revenue 3.4m

  • 34%

5.2m Content revenue 20.5m +9% 18.9m 46.2m +4% 44.5m EBITDA 16.5m +1% 16.3m

Accountant group results

Year ended 31 December 2014

pg 11

  • 9% increase in number of practice management seats.
  • Aggressively moved the business to a subscription model in 2014.

Some level of upfront / service revenue will remain in future.

  • Content business has experienced a strong second half.

Volume growth of 10%.

  • Cost base maintained despite additional volume.
  • Cost increase relates to COGS on content business (ASIC fees).

Revenue Overheads

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REVENUE 2014 Growth 2013 Subscription product revenue 14.0m +14% 12.2m Upfront and service revenue 3.8m

  • 6%

4.0m 17.8m +9% 16.2m EBITDA 6.1m +19% 5.1m

International group results

Year ended 31 December 2014

pg 12

  • Strong new customer acquisition in Virtual Cabinet.

25% increase in the number of seats.

  • Mixed results in nQueue, with USA solid, but UK and Australia weaker.
  • Investment in UK online sales capacity continues.
  • Investment in expansion into the USA with Virtual Cabinet.

Revenue Overheads

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Year ended 31 December 2014 (normalised)

2014 2013

Business Group

52.1% 43.1%

Accountants Group

35.6% 36.5%

International Group

34.5% 31.6% Group

36.8% 34.5%

EBITDA margin

pg 13

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2014 2013

Net debt

$41.4m

Operating cash fmow

$31.3m $26.5m

Capitalised development cost expenditure (net of grant)

($15.3)m ($13.1)m

Fixed asset acquisitions

($0.8)m ($1.5)m

Dividends paid

($10.7)m ($11.3)m

Share Buyback

($27.5)m ($5.5)m

Further 20% of Virtual Cabinet

($2.4)m

  • Cash flow highlights

pg 14

Year ended 31 December 2014

+18%

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Group Trends

$ MILLIONS $ MILLIONS

2006 2006 2009 2009 2007 2007 2010 2010 2008 2008 2011 2012 2013 2014 2014 2012 2013* 2011

10 5 20 10 30 15 40 20 50 25 60 30 70 35 80 90 100

22.9m 6.7m 28.0m 8.2m 31.2m 9.4m 43.3m 11.8m 46.5m 15.3m 46.7m 48.1m 49.5m 51.1m 19.3m 17.8m 48.6m 49.7m 48.5m 17.1m 18.7m 16.6m 16.9m 15.6m 22.1m 6.3m 27.4m 8.3m 28.8m 9.6m 42.0m 13.3m 43.6m 14.9m 43.5m 15.7m

Half Year 2nd Half

OPERATING REVENUE EBITDA

pg 15

* Includes profjt on sale of investment of $1.4m

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2

2006 2006 2009 2009 2007 2007 2010 2010 2008 2008 2011 2012 2013* 2014 2014 2012 2013* 2011

4 6 8 10 12 14 16 18 20 22 24

5.8m 3.3 6.7m 3.8 7.5m 4.2 9.4m 4.6 11.4m 6.3 11.0m 12.5m 13.2m 11.4m 12.5m 10.2m 7.3 6.9 7.1 7.9 6.0 6.1 5.2m 2.9 6.6m 3.7 7.6m 4.3 9.6m 5.3 11.0m 6.1 11.2m 6.0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 $ MILLIONS CENTS

NPBT EPS 11.4m 6.3

pg 16

Group Trends

Half Year 2nd Half

* Includes profjt on sale of investment of $1.4m

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pg 17

  • Business Group

Reckon Accounts: organic growth generated by the Hosted product. Reckon One: launch of the next version of the product in Q2. Reckon Pay: will be launched in collaboration with NAB in Q2.

  • Accountant Group

Organic growth from building the subscription base particularly from Virtual Cabinet, Private Cloud, Workpaper Management and Sync Direct products. Subscription pricing increases the addressable market. Expand content reach into the accountants base.

  • International Group

Team focused on meeting 2015 targets for Virtual Cabinet. USA launch of Virtual Cabinet in 2015. Reckon One launch in UK in 2015.

Future opportunities

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Questions

thank you