MYOB today released its financial results for the half year ending 30 June 2018, reporting record online subscriber growth, up 61 per cent to 492,000, and on track to surpass 1 million online subscribers by 2020.
The results also pointed to solid financial growth delivered during a period of investment, with revenue up 7 per cent to AU$218.5 million and underlying EBITDA up 3 per cent to AU$92.7 million.
The roll-out of the Connected Practice vision and the accelerated delivery of the MYOB Platform have driven significant efficiencies and savings for SMEs and Advisers, reflected in an increase in online SME subscribers, increased customer retention, and an uplift in average revenue per paying user (ARPU).
MYOB CEO Tim Reed said: “We are pleased to see more SMEs and accountants taking up the opportunities we are creating through our Connected Practice vision.
“Our client-focused innovation continues to drive business improvements and personal rewards for businesses throughout New Zealand and Australia and it is pleasing to see the impact we’re having in helping SMEs and advisers to secure their future in an increasingly digital world.
“The strong growth in online subscribers, including migrations from our non-paying subscriber base, supports our decision to accelerate investment in the MYOB Platform. Our focus on creating industry-leading online tools and services, including real time data feeds and automation, will deliver even greater efficiencies for small business owners and their advisers,” said Mr Reed.
Innovations released in the previous six months include new compliance, tax and advisory features, such MYOB Advisor, which uses AI and Natural Language Generation (NLG) alongside financial data visualisations, to enable accountants and advisers to start a conversation with their clients and support their clients’ business needs and financial position.
The results also highlighted continued strong growth in the Enterprise Solutions and Payments segments, contributing 17 per cent to total group revenues in the six months ending 30 June 2018.
“It is exciting to see our investment yielding results for our clients and we look forward to maintaining this momentum and delivering market-leading customer experiences,” said Mr Reed.
Revenue for the six-month period increased to AU$218.5 million, up 7 per cent on the prior year, and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew to AU$92.7 million, up 3 per cent on prior year. MYOB’s preferred measure of after-tax profit, NPATA1, was AU$45.8 million, 6 per cent lower than the prior year, with associated NPATA earnings per share (EPS) of 7.7 cents, 5 per cent lower on prior year due to higher costs under the investment period.
Commenting on the financial results, MYOB’s Chief Financial Officer Richard Moore said: “It’s been a solid start to the 2018 financial year, and we are pleased with the strong operational growth we have seen during 1H18, driven by our strategic vision for the industry and our investment in the MYOB Platform.
“We expect to see further growth through our accelerated investment plans, with AU$80 million of additional investment into R&D and Sales & Marketing over the next two years.”
The Company’s balance sheet remains strong and the Board has declared a final dividend of 5.75 cents per share, a payout ratio of 75 per cent of 1H18 NPATA.
In August 2017, MYOB announced an on-market share buyback of up to 5 per cent of the Company’s issued capital, and to the close of 30 June 2018, has acquired more than AU$38 million in shares from existing cash. Together, the dividend and buyback represent a total of AU$69 million of capital returned to shareholders in 1H18, and more than AU$238 million returned to shareholders since listing in 2015. The buyback arrangement will conclude on 7 September 2018.
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MYOB is a leading provider of online business management solutions. MYOB makes business life easier for approximately 1.2 million businesses across New Zealand and Australia by simplifying accounting, payroll, tax, practice management, CRM, job costing, inventory and more. MYOB operates across three core segments – Clients and Partners (business solutions to SMEs and Advisers); Enterprise Solutions (larger businesses) and Payment Solutions. We also provide ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. We are committed to ongoing innovation, particularly through our Connected Practice Strategy and through the development of the MYOB Platform. For more information visit our website or follow @MYOB on Twitter.
1 MYOB considers NPATA (net profit after tax and after adding back the tax effected amortisation expense related to acquired intangibles), rather than NPAT, to be a more meaningful measure of after tax profit due to the large amount of non - cash amortisation of acquired intangibles that is reflected in NPAT.