Slide 1: Results Presentation Year Ended December 2007
For personal use only Results Presentation Year Ended December 2007 Clive Rabie – Group CEO Chris Hagglund – Group CFO Brian Armstrong- CEO Professional Division Gavin Dixon – CEO Business Division 1
Slide 2: Overview
For personal use only Overview • Reckon is taking strong strides towards achieving its mission: to be the leading Australian provider of best of breed business management solutions for the SME, SOHO, Accounting, Professional and Wealth Management sectors • Our results provide the platform for the su
Slide 3: Products managed and reported under the business division
For personal use only *Products managed and reported under the business division 3
Slide 4: Performance Highlights - year
For personal use only Performance Highlights - year ended December 2007 Reckon Group Revenue up 23.1% to $56.2m EBITDA up 26.4% to $16.5m NPAT up 21.1% to $9.9m Professional Division Business Division Operating revenue up 24% to $18.6m Operating revenue up 23% to $36.8m EBITDA up 24% to $3.7m EBITDA
Slide 5: Performance Highlights – year
For personal use only Performance Highlights – year ended December 2007 • EPS growth 21% to 7.5 cents • Final dividend up by 20% to 3.0 cents per share • Dividend franked to 100% • Operating cash flow up 19% to $14.6m 5
Slide 6: Trends over last years
For personal use only Trends over last 4 years 2004 2005 2006 2007 Revenue 36.6m 42.3m 45.6m 56.2m EBITDA 7.8m 10.1m 13.0m 16.5m NPBT 7.4m 9.3m 11.0m 13.3m EPS 4.0 5.1 6.2 7.5 cents* cents cents Cents * Normalised for tax 6
Slide 7: Half year analysis - year
For personal use only Half year analysis - year ended December 2007 2007 1st Half 2nd Half Revenue 56.2m 28.4m 27.8m Growth 23% 22% 24% EBITDA 16.5m 8.2m 8.3m Growth 26% 23% 30% NPAT 9.9m 5.0m 4.9m Growth 21% 16% 27% 7
Slide 8: Margin trends over years
For personal use only Margin trends over 3 years 2005 2006 2007 EBITDA (pre R&D and Royalties) 16.0m 19.3m 23.0m Margin 38% 42% 41% EBITDA 10.1m 13.0m 16.5m Margin 24% 29% 29% Traditional margin growth is expected to resume in subsequent years. The current year has been impacted by: • Higher volume
Slide 9: Underlying business – year
For personal use only Underlying business – year ended December 2007 2007 2006 % change (excl acquisitions) Operating revenue $52.9m $45.0m +17% Operating expenses* $36.3m $32.0m +13% EBITDA $16.6m $13.0m +27% *Includes higher costs due to: • Higher APS implementation volumes (staff) • Higher propor
Slide 10: Cash Flow Highlights - year
For personal use only Cash Flow Highlights - year ended December 2007 2007 2006 Cash Balance at December 2007 $14.1m Operating cash flow* $14.6m $12.2m +19% Acquisitions $2.3m $2.1m Development Cost Expenditure $3.7m $3.2m Fixed Asset Acquisitions $0.5m $1.4m Dividends Paid $6.6m $5.3m * Income tax
Slide 11: Revenue Breakdown – year
For personal use only Revenue Breakdown – year ended December 2007 100% 90% 80% 70% 60% 59% 59% 60% Recurring Revenue 50% Full Product Service Revenue 40% 16% 30% 24% 28% 20% 24% 10% 17% 13% 0% APS Quicken Grp Reckon Prior year 62% 58% 59% recurring revenue 11
Slide 12: Professional Division
For personal use only Professional Division 12
Slide 13: Professional Division - year
For personal use only Professional Division - year ended December 2007 2007 1st Half 2nd Half Operating Revenue $18.6m $9.4m $9.2m Operating revenue growth 24% 28% 22% New sales & service revenue growth 31% 38% 23% Recurring revenue growth 20% 21% 19% EBITDA $3.7m $2.0m $1.7m EBITDA growth 24% 32% 1
Slide 14: Professional Division - 2007 Highlights
For personal use only Professional Division - 2007 Highlights • Strong organic growth • New business growth up 24% • Consolidated our position as supplier of choice to leading firms • Big 4 firms move to APS 14
Slide 15: Professional Division - 2007 Highlights
For personal use only Professional Division - 2007 Highlights • Significant growth in large clients – high demand for additional services • Services growth up 37% • Client management strategy • Further penetration in key target channels • Maintenance growth up 20% 15
Slide 16: APS Performance – Year
For personal use only APS Performance – Year ended December 2007 Software revenue • Reflects impact of strong new business growth • Reflects impact of Document management take up by Top 100 firms • Reflects impact of take up of full product range by clients Growing Maintenance Revenue Stream Consult
Slide 17: Strong revenue growth in all categories and all countries
For personal use only Strong revenue growth in all categories and all countries Australia • Strong new business growth • 68 new firms switched to APS • Major wins include: - 2 Big 4 firms - WHK Group new national agreement ( over 2,000 users) - 8 new Top 100 firms • Strong take up of Desktop Super –
Slide 18: Professional Growth Strategies
For personal use only Professional Growth Strategies Expanded fully integrated compliance offering .Net Desktop Super .Net Tax forms, Tax manager & PAYG modules Accounts Preparation with Excel based report engine Integrated Fixed Assets AdvanceDocs (Collated PDF’s, Document filing & scanning) Compan
Slide 19: Reckon Limited
Reckon Limited Practice software with human beings bundled in. a, The ultimate ractice software has arms, legs and a brain. Practice software without people? That'll be our competition. 19
Slide 20: Business Division
For personal use only Business Division 20
Slide 21: Business Division - year
For personal use only Business Division - year ended December 2007 2007 1st Half 2nd Half Operating Revenue $36.8m $18.7m $18.1m Operating revenue growth 23% 20% 26% Underlying business revenue growth 14% 13% 15% EBITDA $12.8m $6.2m $6.6m EBITDA growth 27% 20% 35% Underlying business EBITDA growth 2
Slide 22: Business Division - 2007 Highlights
For personal use only Business Division - 2007 Highlights • Strong growth from QuickBooks customer base • Successful development of QuickBooks 2008 QB i Series • Continued success with Elite products – Over 150 practices switched to Elite Accountants’ Suite – 92% net promoter score • Refinement of b
Slide 23: Key 2008 Strategies
For personal use only Key 2008 Strategies • Leverage QuickBooks 2008 QBi Series release • Leverage scalability of QuickBooks Enterprise • Further Saas products through Reckon Data Centre solutions • Strengthen Reckon brand values • Launch Shelco products into Elite customer base 23
Slide 24: Foundation for continued growth
For personal use only Foundation for continued growth • Organic growth continues • Stronger Second Half • Business division - QBi launch in 2008 • Professsional - growth in consultants to cope with increased demand • Improve results from NZ business • Complete Shelco development in first half to go
Slide 25: Questions
For personal use only Questions Thank you 25