RECKON LIMITED — Annual Report 2014

Feb 9, 2015

Appendix 4E Preliminary Final Report Financial Y ear Ended – 31 Dece m ber 2014 10 February 2015

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Results for Announcement to the Market

Trading Results

Non- IFR S*	2014 Result	2013 Res ult	% C hange		Amount Change
Revenue	$100 .8 million	$98.1 milli on	3% i ncrease	$2.7 million
EBITDA on saleo excludingp f investme rofit nt	$37. 1 million	$33.9 milli on	10% increase	$3.2 million
NPAT ex on saleo cluding pro f investme fit nt	$17.6 million	$16.7 milli on	5% i ncrease	$0.9million
EPS exc sale of in luding profi vestment t on	14.2 share cents per	12.8 cents share per	11% increase	1.4 cents pe share r

* 2013 statut o ry results in c luded the pr o fit on sale of the investm e nt in Connec t 2Field Holdi n gs Pty Ltd of $1,414 thousand. The impact of t h is sale has b e en removed f rom the 201 3** results in the above table.

Statutor y	2014 Result	2013 Res ult	% C hange		Amount Change
Revenue	$100 .8 million	$98.1 milli on	3% i ncrease	$2.7 million
EBITDA	$37. 1 million	$35.3 milli on*	5% i ncrease	$1.8 million
NPAT	$17.6 million	$18.2 milli on*	3%d ecrease	$0.6million
EPS	14.2 share cents per	13.9 cents share* per	2% i ncrease	0.3 cents pe share r

* 2013 stat u tory results in the table above include the profi t on sale of the invest m ent in Connect2Field Holdings Pt y Ltd of $1,414 thousand ( a fter tax impa c t was also $1,414 thousan d** ).

Dividends

The Bo a rd has declared a final dividend of 4. 7 5 cents per s hare (2013: final dividen d of 4.75 ce n ts per share). T he dividend will be frank e d to 60%. The fina l dividend will be paid to s hareholders recorded on the Compan y ’s Register a s at record d ate of 20 Febr u ary 2015 (s e e following a nnounceme n t).

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Net tangible assets

The net tangible assets per security as at 31 December 2014 is negative 46.8 cents per share (2013: negative 25.3 cents per share), the increase reflecting the increased debt taken on to accommodate the Intuit share buyback.

Acquisitions and disposals

A further 20% of Linden House Software Limited was acquired effective 2 July 2004 for $2.4 million.

Audit

This report is based on accounts which are in the process of being audited.

Commentary

Business Group

The Business Group has continued to generate volume growth, but has been predominantly focussed on de-risking the existing customer base by moving a substantial portion of customers to a subscription revenue model, thereby adversely affecting revenue growth in the short-term. This division has benefited from the termination of the Intuit agreement, and the subsequent royalty saving. A substantial portion of the royalty saving has been reinvested into the business in the form of increased cloud infrastructure and sales capability as well as product development.

Accountants Group

The Accountants Group has increased the number of practice management seats by 9%, but revenue has in a similar vein to the Business Group, been adversely impacted by a concerted push towards moving the business to a subscription model. Revenue in the ReckonDocs business has also increased by 9% reflecting another very strong performance from this business.

International Group

Another impressive performance from the Virtual Cabinet business together with favourable exchange rates has seen revenue growth of 9% and EBITDA growth of 19% in the International Division. The nQueueBillback business has experienced a solid year in the USA, but has been impacted by weaker results in the UK following large contract wins in the prior year.

Corporate

Net central administration costs were higher in 2014 as the prior year included $0.8 million of exchange gains.

Interest costs in 2014 are higher due to the additional debt taken on to buy back the Intuit shareholding.

Amortisation cost increases reflect the incremental investment in product development in 2014 and prior years.

Clive Rabie

Director, Group CEO 10 February 2015