MYOB ramps up cloud investment

MYOB has revealed that it has pumped more than AU$100 million into research and development over the past three years, in a bid to build its cloud-based services portfolio and expand into the large enterprise end of the market.

MYOB revealed today that it has pumped more than AU$100 million into research and development (R&D) over the past three years — with AU$40 million of that sum spent just this financial year — in a bid to grow its cloud-based services.

The accounting and book-keeping financial software provider, which released its half-yearly financial report (PDF) today, also revealed that it had taken on more than 100 new employees over the past 12 months.

However, the company's investment in new products, new staff, and R&D saw its operating expenses increase by 11 percent for the six months ending June 2014.

MYOB chief executive officer Tim Reed said that the investment in R&D and new talent has seen the company record double-digit growth in its cloud and mobile solutions business.

"With a AU$40 million investment in R&D this financial year, we have continued to expand our cloud offerings to meet the evolving needs of small and medium businesses," Reed said in a statement. "In the first half, we introduced innovative mobile solutions such as MYOB PayDirect — a category-first for credit card payments on smartphone — while the MYOB OnTheGo app is enabling greater mobility for businesses.

"MYOB also continued to invest in talented people, with the business adding 100 new jobs over the past six months to meet rising client demand for an expanding product suite," he said.

MYOB flagged double-digit growth in revenue and earnings before interest, tax, depreciation, and amortisation (EBITDA) for the six months ending June 2014.

The accounting and finance software provider reported a 21 percent surge in operating revenue from the corresponding period last year to AU$139.5 million, while recording a 29 percent boost in EBITDA, to AU$70 million.

The company said that it maintained its cash conversion rate at more than 87 percent, with a continued improvement in its debt position.

Reed said that the company's ongoing acquisition and investment in other companies has put it at the "forefront of cloud accounting solutions" for Australia and New Zealand, and that its acquisition earlier this month of New Zealand HR and payroll software company PayGlobal has boosted its footprint in the mid to large business sectors in the ANZ region.

"We will continue to focus on providing cloud accounting for businesses of every size and supporting them as they grow from micro to mid sized," said Reed. "The recently announced acquisition of PayGlobal has doubled our presence in the mid- to large-sized business market in Australia and New Zealand.

"It is a complementary offering to MYOB EXO, and in early 2015, we expect to introduce a new cloud-based business management system for larger enterprises. We are excited by its development as it will help growing businesses to become more flexible and mobile," said Reed.

MYOB's cloud-based services push comes as New Zealand's Xero continues to make headway in the local market, reporting last week that it has nabbed more than 147,000 paying customers in Australia — nearly doubling its tally in the local market over the past 12 months.

In its latest financial report, MYOB revealed that it now claims more than 86,000 paying clients using cloud files, up from 43,000 this time last year.