​MYOB recurring revenue pushes half year revenue to AU$178m

MYOB has published its first half year results for the period ending June 30, 2016, reporting a recovery from its net loss experienced during the same period last year, and beating its forecast for the period.

The cloud accounting firm has reported net profit after tax (NPAT) for the half year period came in at AU$26 million, up from a net loss of AU$65 million. However, MYOB has noted that it considers the value of its net profit after tax and amortisation (NPATA), which grew 16 percent to AU$46 million for the period, as a "more meaningful measure of after tax profit due to the large amount of non-cash amortisation of acquired intangibles that is reflected in NPAT".

Revenue for the half year was up 10.9 percent from AU$160 million to AU$178 million, while pro forma earnings before interest, tax, depreciation, and amortisation (EBITDA) was AU$82 million, up 14 percent year on year. MYOB said both revenue and EBITDA were above the prospectus forecasts for the period.

According to MYOB, the company's success during 1H16 was driven by a 13 percent boost to AU$171 million in overall recurring revenue across the business, which makes up 96 percent of the company's total revenue.

Looking closer at the company's business divisions, its SME Solutions business, which makes up 63 percent of total revenue, saw revenue reach AU$113 million, up 14 percent on 1H15.

Additionally, the number of paying SME users grew 8 percent to 570,000, while online SME users increased by 37 percent to 195,000, making up a large fraction of total online MYOB subscribers, which grew by 41 percent to 200,000 during the half year.

MYOB's Practice Solutions division, which up makes up 24 percent of total revenue, remained fairly steady, growing a mere 3 percent to AU$43 million. Despite this, MYOB said it now has more than twice the number of clients using MYOB Portal since the end of 2015.

Meanwhile, within Enterprise Solutions, which makes up 12 percent of total revenue, revenue grew by 9 percent to AU$22 million, which the company said was due to increasing uptake of MYOB Advanced.

During the 1H16, MYOB added it continued to invest in R&D to build its platform, where 68 percent of capital expenditure during the period flowed directly to R&D.

"These strong financial and operational results have been driven by the ongoing execution of our Connected Practice strategy which, delivered through the MYOB platform, reimagines the way SMEs and accountants work, driving improved productivity and insight," MYOB CEO Tim Reed said.

Looking ahead, MYOB believes revenue growth will be in line with historical trends, highlighting EBITDA margins will remain around 45 percent to 50 percent and FY16 investment is expected to be at the upper end of previous guidance of 13 percent to 16 percent of revenue range.

The company added it will continue to search for acquisitions, following the acquisition of Greentree for NZ$28.5 million earlier this month.