Australian software firm Reckon Group has published its financial results for 2019, reporting net profit after tax was up 5% year on year to AU$8.1 million.
For the 12 months to 31 December 2019, the company also achieved a 5% increase in earnings before interest, tax, depreciation, and amortisation (EBITDA) to AU$30.6 million, while total group revenue remained flat at AU$75.4 million
Reckon said the overall growth experienced by the company was underpinned by its focus on cloud, mobile, and new products across its business group and legal group.
The business group saw a 6% increase in revenue in the second half of 2019, which the company said was driven by a 38% year-on-year rise in users for cloud products, and accounted for a 9% year-on-year growth in cloud revenue for the business group.
Total cloud subscribers reached more than 100,000 users by 31 December 2019, it said.
Meanwhile, the legal group gained traction mainly through the uptake of its scan and print software, which the company said generated the majority of new revenue in the division, resulting in a 34% increase in EBITDA for the division.
"Overall 2019 was a solid result for the Group, with encouraging performances from two of our divisions," Reckon Group CEO Sam Allert said.
"We have now pivoted the business away from a desktop software company to a cloud-first software company, and we are excited by our expanded product suite and the product roadmap in 2020 that we believe will provide long-term sustainable revenue opportunities."
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When it came to numbers for its accountant practice management group, total revenue decreased by 7% to AU$27.4 million and EBITDA was down 8% to just over AU$14 million.
MYOB had offered to purchase the accountant practice management group for AU$180 million back in 2018.
However, MYOB pulled out of the deal, highlighting that it wasn't prepared for how long the regulatory process of the acquisition would take.
"The regulatory process has taken considerably longer than the parties anticipated and could continue for some time," MYOB wrote.
"The sale and purchase agreement had a six-month duration within which the conditions precedent to completion had to be satisfied (including the regulatory conditions) failing which either Reckon or MYOB could terminate the contract."
The rescinded offer followed the Australian Competition and Consumer Commission (ACCC) expressing concerns over the proposed acquisition, with the regulator saying that MYOB might gain a market monopoly if the acquisition were to proceed.
Looking ahead, the company plans to launch the first module of its accountant group's cloud suite during the first half of 2020, which it hopes will "widen the addressable market" for the business arm.
"For 2020, we expect to pick up momentum as our cloud and subscription growth strategy continues to accelerate," Allert said.
The company said it received a 'clear' understanding of the value of its accounting arm following the sale to MYOB falling through.
MYOB has announced it will no longer be pursuing the AU$180 million acquisition of Reckon's Accountants Group assets.
The proposed AU$180 million acquisition of Reckon's Accountants Group by MYOB has been binned.
KKR & Co has gone in AU$0.40 per share cheaper than its initial offer.