Reckon reports steady 1H20 results as it merges with Zebraworks
Australian software firm Reckon Group has announced in publishing its half year results for 2020 that profitability remained steady and it has merged with Zebraworks, a US-based SaaS provider for mid-sized legal firms.
For the six months to 30 June 2020, the company saw net profit after tax lift ever so slightly to AU$5.4 million from the previous corresponding period, while earnings, before interest, tax, depreciation, and amortisation remained steady at AU$17.1 million.
Total group revenue closed at AU$39.8 million, just 2% higher than the same period last year.
The company said steady profitability was fuelled by a 23% year-on-year increase in cloud revenue from AU$7.8 million to AU$9.6 million, which in turn drove 6% overall revenue increase for the division. As of 30 June 2020, there are now over 87,000 cloud users.
Reckon Group CEO Sam Allert said the results for the first half of 2020 is proof of the company's resilience.
"We have experienced an eventful six months and are seeing the fruits of a clear, multi-year strategy -- one which has shaped a business with the resilience, agility and expertise to weather storms while continuing to reliably deliver growth and profitability for shareholders," he said.
See also: SaaS, PaaS, IaaS: The differences between each and how to pick the right one (TechRepublic)
In addition, Reckon said the growth in the first half of 2020 was underpinned by its decision to take a 70% stake in Zebraworks, which saw the group's legal division merge with the startup on August 1 to form Nqueue Zebraworks. The remaining 30% will be retained by Zebraworks shareholders, who are mostly key members of the management team.
Nqueue Zebraworks will leverage the legal group's existing infrastructure in the US, which will be expanded as the business grows, while all of the Zebraworks IP and other assets will be rolled into the merged entity.
Reckon has also set aside $3 million to fund the growth of Nqueue Zebraworks to the end of 2023, with the option of making an addition $2 million available.
"Zebraworks' proven team will help Reckon execute on our considered future strategy for the legal group, which is to harness our significant tech expertise to grow our footprint in the legal practice management industry, both in the US and globally," Allert said.
"We are excited to execute on the potential for Nqueue Zebraworks in what is a substantial global market."
During the half-year, Reckon also focused on delivering its cloud and mobile strategy through the launch of a new paid payroll app in May and the release of a cloud workflow module by its accountant practice management group.
The company said there are plans to launch more mobile apps throughout the second-half.
"The next six months and beyond will be a critical time as the world grapples with continued economic uncertainty, but we've shown that our solid fundamentals, coupled with our vision, can and does continue to deliver through tough times," Allert said.
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