RECKON LIMITED — Interim / Quarterly Report 2015

Aug 10, 2015

==> picture [9 x 74] intentionally omitted <==

==> picture [42 x 74] intentionally omitted <==

==> picture [55 x 38] intentionally omitted <==

==> picture [55 x 37] intentionally omitted <==

ASX Announcement Highlights Commentary Half Year Results Ending 30 June 2015

11 August 2015

Reckon is pleased to a nnounce r e venue gro w th for the h alf year en d ed 30 Jun e 2015 of 6 % and EBI T DA growth of 5 % . The focu s on volume growth acr o ss all divisi o ns has paid dividends, a nd substant i al progress has been mad e in further entrenching the group as a subs c ription busi n ess with s t rong onlin e capability a nd internation a l reach.

		6 mo Jun nths to e 2015	6 month June 20 s to 14	% Growth
	Reve nue	$54.0 million	$51.1 milli on	6%
	EBI TDA	$20.2 million	$19.3 mi llion	5%
	NP AT	$9.3 million	$9.5 mil lion	-1%
	EP S	7.9 cents	7.3 cen ts	8%

Accountant Group

• Ac c ountant Gr o up revenue has grown b y 6% and E B ITDA by 4 % .

• Th e Reckon D o cs content b usiness has again performed strongly with reve n ue growth o f 10%.  Su b scription re v enue grew 8%, mainly as a result o f volume g r owth from b oth new cu s tomers an d cro s s selling additional modules into th e existing cu s tomer base.

• Su b scription re v enue now r e presents 9 1 % of practi c e management revenue.  Th e move to a s ubscription model in th e Accountan t Group has b een substa n tially comp l eted.  As expected the strongest customer i n terest has b een in the D ocument M anagement, Workpape r Ma n agement a n d SyncDire c t modules. T he market p otential for each of the s e products i s significant.

Reckon Limited ABN 14 00 3 348 730 | L e vel 12, 65 Be r ry Street Nort h Sydney NS W 2060 Australi T +61 2 9577 5000 | F +61 2 95 7 7 5555 | inf o @reckon.com | www.recko n .com

==> picture [8 x 57] intentionally omitted <==

==> picture [55 x 57] intentionally omitted <==

Business Group

• Bu s iness Grou p revenue a nd EBITDA is margina l ly down on last year a s we have aggressivel y mo v ed this divi s ion towards a subscripti o n only model this half y e ar.

• Whilst we hav e continued t o see volu m e growth i n this busin e ss, moving to a subscription mode l im p acts revenue in two wa y s, firstly subscription p r oducts are g enerally cheaper than t he product s tha t are being replaced, a nd secondl y some su b scription p r oducts are offered wit h a monthl y pa y ment option thereby del a ying reven u e recognition.

• Ou r products i n this divisio n are priced substantiall y lower than our compet i tors, theref o re providin g co m petitive ad v antages an d future prici n g upside.

• Thi s movemen t to a subsc r iption mod e l has result e d in subscr i ption reven u e being up 42% on th e pri o r year and t h is now repr e sents 71% of core product revenue in this divisi o n.

• Th e quantum o f Reckon O ne units th a t have been sold sinc e the latest v ersion was released i n Ju n e, have in c reased su b stantially. T his early indication o f success with Reckon One ha s en c ouraged us to continue o ur high lev e l of investm e nt in that product.

• Cloud revenue has grown 44% and r epresents 3 0% of cor e product r e venue, and we remai n co n fident that w e can achie v e continue d strong gro w th in this m a rket.

International Group

• Int e rnational G r oup revenu e has grown by 19% and EBITDA by 44%.

• Int e rnational re v enue now represents 1 9 % of group revenue and this divisi o n is poised t o become a mu c h more substantial part of the grou p in future.

• Th e above res u lt is net of a continue d investment in taking R eckon On e to the UK, and Virtua l Ca b inet to the U SA (no re v enue has b e en booked as yet). Both of these a re significa n t markets i n the i r own right.

• Vir t ual Cabinet has been l a unched int o the USA a t a number o f accounta n t’s confere n ces and th e pro d uct has be e n met with a positive re s ponse.

• De m and in th e Internation a l Group h a s been str o ng with a g ood backlo g of orders in place fo r del i very in the s econd half.

• Su b scription re v enue is 18 % up on last y ear and no w represent s 77% of the revenue in t he division.

An earning s per share g rowth of 8 % is a signific a nt achieve m ent and validates the d e cision to a c quire Intuit’ s shares last year.

The Board has declare d an interim dividend of 4 .25 cents ( 2 014: 4.25 c e nts), and t h is dividend w ill again b e franked to 6 0%.

Reckon Group CEO, Clive Rabie said : “We a re delighte d that we have achieved solid growt h across th e group and b een succe s sful in mai n taining our f ocus on building a substantial sub s cription bu s iness on a n internation a l stage and have mad e significant inroads into making Re c kon One a contender in the onlin e accounting software sp a ce.

We see lar g e markets o pportunitie s for many a s pects of o u r business w hich we ar e excited ab o ut pursuin g over the coming years. This mean s continuing to invest in people, marketing and d evelopment in the shor t term to allo w longer ter m revenue a n d growth. ”

==> picture [8 x 57] intentionally omitted <==

==> picture [55 x 57] intentionally omitted <==

For furthe r informatio n , please c o ntact:

Mr Clive R abie Mr Chris H agglund Group CE O Group CFO Reckon Li m ited Reckon Limited (02) 9577 5 946 (02) 9 5 77 5414