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Reckon profit jumps in first-half

James Hutchinson (via AFR) | Aug. 13, 2013
Accounting software maker Reckon has launched a share buy-back plan worth about $32 million, after posting 10 per cent growth in net profits in the first half.

Accounting software maker Reckon has launched a share buy-back plan worth about $32 million, after posting 10 per cent growth in net profits in the first half.

Revenue increased 3 per cent year-on-year to $49.5 million in the half-year to 30 June, and 10 per cent in earnings before interest, tax, depreciation and amortisation to $18.7 million from $17.1 million.

Earnings a share rose 11 per cent to 7.9 cents.

The company said the earnings would yield an interim dividend of 4 cents, up from 3.75 cents.

"The half-year results have been steady with growth in our core businesses continuing to be achieved," chief executive Clive Rabie said in a statement.

"In our view this represents the strength and stability of our business, and we remain excited about the future growth opportunities that exist in all of our businesses as a result."

Growth was driven by Reckon's professional accounting division and process automation decisions, rather than the small business accounting products which it had traditionally relied on.

Reckon is close to finalising a two-year transition away from its reliance on US company Intuit, which would sever annual royalty payments of $6 million by 2014.

It will continue to sell the popular Quicken brand of products under license with the company but has begun changing the brand name to reflect the end of the royalty agreement.

In February, Mr Rabie told The Australian Financial Review it would attempt to focus on developing online software, to compete against New Zealand rival Xero and retail competitor MYOB.

The company has already launched a beta version of its online micro-business accounting software, Reckon One, but posted no revenues for the product line in the interim.

Reckon shares slipped 1 per cent to $2.50 after the results announcement.

 

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