RECKON LIMITED — Capital/Financing Update 2017

Jun 29, 2017

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ASX Announcement

Reckon Limited (ACN 003 348 730)

30 June 2017

• DIVIDEND IN SPECIE

• DEMERGER

• AIM IPO OF THE DOCUMENT MANAGEMENT BUSINESS

• POSSIBLE PRO RATA RIGHTS ISSUE

On 17 March 2017, Reckon Limited (Reckon) announced its intention to demerge Reckon ’ s Document Management segment (DMS business) under an independent company, GetBusy Plc (GetBusy), with shares admitted to trading on AIM, a market operated and regulated by the London Stock Exchange (AIM).

The demerger will be implemented through an In-Specie Distribution of GetBusy shares to Reckon shareholders.

The board is pleased to announce that it has today determined to proceed with an intended conditional dividend of an estimated AU$26 million from retained earnings, based on the expected net asset value of the DMS business at the time of the de-merger.

The In-Specie Distribution is conditional upon, and will take effect from, the admission of GetBusy to AIM, which is expected to occur on or around early August 2017.

If unconditional, Reckon will satisfy the dividend by distributing shares in GetBusy to Reckon shareholders on a one for three basis.

Reckon shareholders recorded in the share register on the record date will be entitled to participate in the In-Specie Distribution. The record date is expected to be formally announced to the ASX in the next 5 to 10 business days.

Reckon shareholders do not need to do anything or to pay anything for the GetBusy shares that they will receive.

Ineligible foreign shareholders (that is shareholders whose addresses are shown in the share register at the record date as being in a jurisdiction outside Australia, New Zealand and the United Kingdom) will have their shares sold by GetBusy ’ s UK broker for the best available price and the ineligible foreign shareholders will receive cash in lieu of the GetBusy shares they would have otherwise been entitled to.

Reckon proposes to charge the entire amount of the in-specie distribution to its retained earnings account and is in the process of seeking confirmation from the Australian Taxation Office (ATO) of the tax consequences for Australian resident shareholders. This will also be the subject of a formal Class Ruling by the Commissioner of Taxation which will provide those shareholders with relevant certainty.

At this point, Reckon expects that the Commissioner of Taxation will make a determination that there should be no capital gains tax (CGT) event for shareholders and that:

• 2% of the value of the In-Specie Distribution will be treated as an assessable de-merger dividend;

• 98% of the value will be treated as a non-assessable de-merger dividend.

In addition, shareholders will need to apportion the tax cost base of their existing Reckon shares across their existing Reckon shares and their new GetBusy shares based upon their relative market values

The final tax treatment will be confirmed as part of a Class Ruling.

Reckon will implement the re-organisation of its DMS business via a series of asset and share sales such that the DMS business will be held by GetBusy. Daniel Rabie, presently COO of Reckon Limited, will be appointed CEO of GetBusy.

GetBusy will require additional working capital of £ 3 million (AU$5.1 million) that will amongst other things support product development, particularly of a proposed new product referred to as SCIM (Secure Communication and Information Management).

The boards of Reckon and GetBusy are currently considering raising these funds by way of a pro rata non-renounceable rights issue of GetBusy shares to Reckon Shareholders, which would be fully underwritten by Reckon directors, Clive Rabie, and Greg Wilkinson, and Reckon COO, Daniel Rabie. It is expected that a final decision on the capital raising will be made prior to the formal announcement of the record date for the overall proposal, and the details released to ASX at that time.

If the admission of GetBusy to AIM does not proceed, the In Specie Distribution and capital

raising will not take place.

Reckon shareholders will receive an explanatory statement (which may take the form of an Australian prospectus if the rights issue proceeds) together with an AIM Admission document setting out the detailed information relating to GetBusy ’ s proposed admission of its shares to trading on AIM.

This documentation will be released to ASX at the time of formal announcement of the record date, and then sent to shareholders on or around 5 business days after that announcement.

Attached to this announcement is a set of slides intended for presentation to institutional investors in the UK in the week commencing 3 July 2017.

For further information, please contact: Mr Clive Rabie Mr Chris Hagglund Group CEO CFO Reckon Limited Reckon Limited (02) 9577 5946 (02) 9577 5414

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Presentation June 2017

Document Management and Productivity Software

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A letter from our CEO

Our mission at GetBusy is to make people productive and happy.

We’re an established and successful business, with 51k

While our award winning SmartVault document management software targets the Professional SME market and is long established in the USA market.

customers, and 15% underlying customer growth in 2016. Over 617k users are registered to share information through our online portals.

In addition, we have an exciting new product code named ‘SCIM’ under development, taking the best of what we know works in our current two successful products to further accelerate our growth.

We have a quality earnings stream with 82% of our total revenue coming from recurring subscription revenues. And we’re growing rapidly from a strong customer base, with 94% of revenue growth coming from subscription in 2016.

We are seeking listing on AIM with a Rights Issue to existing shareholders of £3 million to further strengthen and build out our existing business, and to develop a new product (SCIM).

Our Virtual Cabinet product is document management software focused on medium to enterprise business market. It is used by 27% of the largest accounting firms in the UK, and our successful recent Australian and New Zealand launch proves its ongoing demand.

GetBusy has strong products across multiple geographies. We have a proven business model which has demonstrated growth, a great deal of momentum on our side, and enormous future potential. Onwards!

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Daniel Rabie

3

The agenda

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CEO update Financials

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Outlook

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Questions

4

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CEO update

5

Reckon and GetBusy demerger

Demerged

Reasons for the Demerger

• Free GetBusy to pursue an independent strategy, building on the success of its existing businesses.

• Enable GetBusy to raise capital and create its own personality consistent with the innovative nature of its new product in development.

• Strengthen Reckon’s focus on its Business and Practice Management segment strategies, and benefit from improved cash flow from the removal of the development capital and new market costs.

• Simplify Reckon’s diverse business portfolio.

• Lets Reckon take advantage of its previous investments in cloud based products, and focus predominantly on domestic activities (in Australia and New Zealand).

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Potential capital raising

£3 million

• 1 Further strengthen GetBusy’s existing SmartVault and Virtual Cabinet businesses.

• 2 Complete development of our next-generation product codenamed SCIM.

4th August

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Our three Core Products

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SmartVault

Virtual Cabinet

SCIM

14k customers at Dec 2016 Document management software for small to medium businesses

37k customers at Dec 2016 Document management software for medium to enterprise businesses.

In development Document management + MORE for small, medium and enterprise businesses.

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Operational model

Enterprise Virtual Cabinet

Transactional SmartVault & SCIM

Self Service

SCIM

Sales

Highly skilled sales reps focused on a narrow set of target prospects. Long sales cycles supported by technical consultants who implement the product around customers needs.

Inside sales reps supported by online content, automation, tools, training, incentives and metrics that enable high efficiency.

Leverage off existing channels to market and sales team.

Marketing

High-end marketing that facilitates brand awareness, education, relationship building and trust, complemented by direct support of the sales team.

Feeds highly qualified leads to the sales team to build pipeline. Removes roadblocks through

educational content and automation that drive complexity out of the purchase.

Revenue generation with low CAC (Customer Acquisition Cost). Create awareness, educational content and automation to drive business through the entire purchase process from awareness to close.

Support / Consulting

High touch support up to on-site issue resolution complemented by educational tools and training tailored to the specific needs of individual customers.

Inside support reps that provide pre and post sales support and consulting, with tools and training that enable high efficiency, helped by customer self-service tools and educational content.

Automation and tools for easy on-boarding, plus templates and educational content that allow customers to largely resolve any issues they encounter on their own.

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The problems we solve

Wasted time dealing with information issues can lead to a 21.3% loss in an organisations total productivity.*

Stop duplicate files, content

disorganisation, and data overload.

Control security risks, track files, receive alerts, automatically file attachments.

Prevent significant search time per worker per day looking for lost files.

View audit trails, reduce risk of confidential leaks and hacks.

Meet audit and litigation requirements to prevent fines and damages.

Legal digital signatures to significantly reduce contract turnaround time.

One version of the document seen by everyone, no duplicates and confusion.

Log into your document system from outside the office.

Integrates with your existing software and systems so all your files live in one place.

*ICD 2012

10

Market opportunity

Security, Mobile, Big Data and other strong industry trends are positive for GetBusy

(Enterprise Content Management)

(Small and Medium Sized Enterprises)

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NZ 0.5 million
AUS 3 million
5.9
$
UK 5 million
billion USD
USA
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The ECM market grew by 9.4% in 2015. While the top three vendors lost market share in 2015 to their smaller rivals.

Only showing markets with current operations.

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Rising customer growth

55k 50k 45k 40k customers as at Dec 2016 35k 30k 25k

7k new customers

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20k
15k
10k
2011 2012 2013 2014 2015 2016
SmartVault
acquired
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Strong subscription business

of total revenue was subscription in 2016

of 2016 revenue growth was subscription

average 2016 MRR churn. 14k customers at Dec 2016.

average 2016 MRR churn. 37k customers at Dec 2016.

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Scalable business model

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ARPU: £170
£1.5m
+6%
LTV: £2,312
£1.4m
CAC: £458
MRR churn: 1.1%
£6.5m +21% £5.4m Usually annual or monthly renewals.
Virtual Cabinet Metrics 2016
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ARPU: £164

MRR churn: 0.28%

LTV and CAC are not applicable to Virtual Cabinet as an enterprise desktop product.

Generally 3 year contracts, which rolls into an annual renewal at the end of the term.

• The results have been amended from those disclosed in the HFI for comparative purposes. The above results include SmartVault, which was acquired in January 2016, for both years and assumes that development costs are expensed as incurred rather than capitalised and amortised.

ARPU = Average Revenue Per User | LTV = Lifetime Value | CAC = Customer Acquisition Cost | MRR = Monthly Recurring Revenue

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Growing user numbers & satisfaction ratings

650k 600k 550k 500k 450k 400k 350k users have registered on our online portal as at Dec 2016 300k 250k 200k 150k 100k 50k 0 2011 2012 2013 2014 2015 2016

98% of Virtual Cabinet customers

84% of SmartVault customers

A ‘user’ is someone who has accessed our online portal, but isn’t yet a customer. Hence they have unmonetised potential.

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Diversified revenue

Largest 20 businesses

Largest 21st-40th businesses 5% of revenue Largest 41st-60th businesses

Largest 61st to 80th businesses

Largest 81st to 100th businesses

Remaining businesses

Each business contains multiple customers.

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A globally diversified business. Over 110 worldwide employees

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UK
61% revenue
59 staff
USA
28% revenue
38 staff
ANZ
11% revenue
14 staff
Only entered ANZ region
in 2015. Proves global
17 potential.
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Breakdown by industry

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Manufacturing 2%
Construction 2%
Medical, dental or health service 3%
Nonprofit 2%
Professional consulting 3%
Financial services 23%
Financial services other
than accounting 3%
Hospitality 2%
Other 3%
SmartVault Virtual Cabinet
Insurance 7%
Property 2%
Legal 1%
Insolvency 1%
Other 17%
80% Accounting 51%
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Accounting and bookkeeping 80%

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Businesses that choose us

Some of the most trusted professional firms in the market use us, including 27% of the UK’s top 100 accountancy practices.

And many more...

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Our competitors

SmartVault

Virtual Cabinet

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Financials

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Celebrating 2016’s results

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Revenue Dev Spend EBITDA
Net of development spend
£8 £2.6 -£ .4
million million million
22 Development spend has historically been capitalised and amortised.
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GetBusy Group Financial Performance

	2016*	2015*	Organic Growth	Organic Growth
In constant currency	GBP millions	GBP millions	Excluding	2016 SmartVault acquisition
Subscription Revenue	6.5m	5.4m	21%
Upfront + Service Revenue	1.5m	1.4m	6%
Total Revenue	8.0m	6.8m	18%
COGS	0.6m	0.7m
Development	2.6m	2.6m
Gross margin after Development	4.7m	3.4m	39%
Gross margin %	60%	50%
Overheads	6.1m	4.8m	28%	Increase mainly due to new ANZ sales & marketing team
EBITDA	-1.4m	-1.4m	-1%	700k in 2016 is due to our new product (SCIM) development costs

• The results have been amended from those disclosed in the HFI for comparative purposes. The above results include SmartVault, which was acquired in January 2016, for both years and assumes that development costs are expensed as incurred rather than capitalised and amortised. Half Year results will be presented in August / September 2016

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ANZ = Australia and New Zealand

Key segment achievements

		2016	2015	Growth	Growth
	UK	4.9m	4.8m	1%	Moved key UK sales staff to ANZ to kick-start region
Operating revenue	USA	2.3m	1.6m	40%
	ANZ	0.9m	0.3m	155%
Development	Existing products	1.9m	2.6m	-27%
	SCIM	0.7m
	Virtual Cabinet	38k	32k	15%
Customers	SmartVault	14k	12k	14%
	Total	51k	45k	15%
	Virtual Cabinet	173k	110k	57%
Users	SmartVault	444k	307k	45%
	Total	617k	417k	48%	Unmonetised users. Enormous potential for SCIM.
	Virtual Cabinet	164	169	-3%
ARPU	SmartVault	170	141	20%
	Total	166	162	3%
LTV	SmartVault	2,312	Acquired SmartVault in Jan 2016.		Virtual Cabinet N/A as an enterprise desktop product.
CAC	SmartVault	458	Acquired SmartVault in Jan 2016.		Virtual Cabinet N/A as an enterprise desktop product.

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1 Increase new business wins

Existing business growth focus

1 Improve LTV and CAC

• Increase new business clients and revenue

• Continue to train and increase the size of highly

• skilled sales team

• Increase marketing capabilities

• Increase LTV

• Decrease CAC

2 Reduce churn

• Reduce customer churn by upgrading customers

2

Low churn

• Low customer churn rate

• Continue to improve high touch consulting and

• support models

• Increase attachment rates for customers who

• need consulting

3 Increase ARPU and new verticals

• Focus on larger clients to increase ARPU

3 Increase ARPU and new verticals

• Focus on larger clients, especially in Australia and

• New Zealand to increase ARPU

• Continue to grow Accounting vertical, while

• attacking new verticals

• Continue to grow Accounting vertical, while

• attacking new verticals

4 Manage operational cost

• Manage SmartVault operational cost effectively

4

R&D

• Increased focus on SCIM R&D spend

• Continue to balance current customer needs with

• investment in the new product

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Outlook

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1

3

2

Some ingredients behind SCIM

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Experienced team

Being built by a team with decades of document management software experience.

Customer obsession

Obsessive customer focus to prioritise features and determine release readiness.

UX focus

Document management + MORE for small, medium and enterprise businesses.

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SCIM explained

The old way

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Quote Waiting
Tool $ Customer
Physical
Signature
Document
misfiled
Missed
job
Admin
time
Tasks
Chaotic
Tool $
you
Forgotten
Email
customer
Tool $ Poor
security
Scheduling Invoice
nightmare Angry Tool $
customer
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VS
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The new way

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Happ ~~y~~ cu ~~st~~ omer

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Produc ~~t~~ ive you

One tool. One simple price. Your unfair productivity advantage.

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Big launch base, strong potential

650k 600k 550k 500k 450k 400k 350k users have registered on our online portal as at Dec 2016 300k 250k 200k 150k 100k 50k 0 2011 2012 2013 2014 2015 2016

Strong launch potential

Strong growth potential

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Experienced Board

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Miles Jakeman

Daniel Rabie

Clive Rabie

Gregory Wilkinson

Nigel Payne

Non-Executive Chairman

Chief Executive Officer

Non-Executive Director

Non-Executive Director

Independent NonExecutive Director

Head of Strategy, and COO of Reckon.

Currently Executive Director & Deputy Chairman of Citadel Group.

10 years’ experience in the software industry.

30 years’ experience advising senior business Founder of numerous leaders and government startup businesses. officials.

Extensive strategy, leadership, operational and risk management experience.

Co-founder of Reckon Currently Non-Executive and CEO from Chairman of AIM traded 1987-2006. ECSC Group Plc, Gateley Plc, Stride Gaming Plc & EG Solutions Plc.

Previously COO, and currently CEO of Reckon, from 2001 to present.

Experienced public 30 years’ experience in EG Solutions Plc. and private company the software industry. director, with range of CEO of AIM Listed directorships. Founder and mentor Sportingbet Plc to numerous startup 2000 - 2006. Extensive management software businesses. and operations Chartered Accountant experience in IT and with 25 years’ Plc board retail sectors. experience.

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In summary

Good subscription revenue

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Existing business with proven growth

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Future growth

potential

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Experienced

team

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Questions

32

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investors@getbusy.com

Important notice

This presentation is supplied on the following conditions, which are expressly accepted and agreed to by the recipient (‘Recipient’) as evidenced by the retention of this presentation and participation in discussions with GetBusy Plc (“GetBusy”). If these conditions are not acceptable to the Recipient, this presentation and all copies are to be returned immediately to GetBusy.

This presentation has been prepared solely for the information of prospective investors. This presentation does not purport to contain all the information which may be material to the Recipient in making any decision regarding investment in GetBusy.

The Recipient should not rely on any material contained in this presentation as a statement or representation of fact, but should satisfy themselves as to its correctness by such independent investigation as they or their legal and/or financial adviser sees fit. Any reliance placed by the Recipient on the presentation or any information, shall be solely at its own risk.

GetBusy and its staff, expressly disclaim any and all liability for warranties or representations, expressed or implied, contained in, or for omissions from this presentation.

This presentation does not constitute an offer or contract, or any part of an offer or contract. The presentation is intended as a guide only and its contents may change in the future. It is not a prospectus and nothing in this presentation shall be taken to be an invitation for, or application or offer to subscribe for, or buy securities or assets of, GetBusy or taken to be an offer of securities or assets of GetBusy.

The presentation is provided to the recipient on a confidential basis and is not to be re-supplied to any person without the prior written consent of GetBusy.