Reckon delivers strong half-year results underpinned by growth in continuing operations
ASX-listed Reckon has reported 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 $4 million 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 $11 million, a 6% uplift on the PCP.
First-half highlights included the $100m cash sale of Accountants Group division, with strong revenue and earnings growth across Reckon’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 $27 million, up 2% on the PcP, with recurring subscription revenue accounting for 90% of total revenue.
The Business Group recorded H1 subscription revenue of $19.9 million, up 6% on PCP. The integrated payments solution with Novatti, which holds a 19.9% stake in Reckon, is also expected to create additional revenue opportunities for the Business Group.
The Legal division recorded H1 subscription revenues of $4.4 million (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.
Reckon Group CEO, 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.”
