Thursday, 21 February 2019 10:01

MYOB reports profit lift Featured

By
MYOB CEO Tim Reed MYOB CEO Tim Reed

Accounting software provider MYOB has released its 2018 full-year results, showing a 2% improvement in after-tax profit.

Despite the profit lift, MYOB preferred to emphasise the 57% increase in online subscribers to a total of 628,000 million.

The company still expects to reach the one million online subscriber milestone by 2020.

The customer retention rate rose to 83% in 2018, a record for the company.

Last year was the first year of MYOB's accelerated investment strategy, and while revenue increased by 7% to $445 million, underlying earnings before interest, tax, depreciation and amortisation remained stable at $190 million.

MYOB is fast-tracking the development of the MYOB Platform, its integrated online platform for the small business accounting and advisory industry. The compliance and document management modules are expected to be released this year, and the practice management module is now under development and ahead of schedule.

But during 2018 the fastest growing segments for MYOB were enterprise solutions (MYOB Advanced) and payment solutions were the fastest growing segments for MYOB in 2018.

"The new strategic partnership with Mastercard extends MYOB's payments services to offer an integrated solution for SMEs to pay suppliers and employees directly within MYOB's software, opening up $200 billion of payment transactions," said chief executive Tim Reed.

Despite the increased profit, no final dividend has been declared due to an agreement with global investment firm KKR relating to a proposed scheme of arrangement with that company. If the scheme does not proceed, consideration will be given to a special dividend.

An update on the KKR situation is expected this week.

"I am excited with the progress we're making as a business. In 2018 we continued to deliver a solid set of financial results and progressed a number of bold initiatives through our accelerated investment strategy. The benefits are already being realised, with encouraging feedback from our partners and SME customers," said Reed.

"This is an important time for MYOB, as we double down and focus on completing the MYOB Platform, which we believe will create significant efficiencies for our SMEs and their advisers and position the company and our clients for future growth."

MYOB updated its 2019 guidance for investors, predicting 6-8% revenue growth, R&D investment to be approximately 20% of revenue, and underlying EBITDA margin expected to be greater than 38%.

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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.

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