MYOB delivers solid financial results
23 February 2018
MYOB delivers solid financial results and record online subscriber growth, moves forward on delivery of ‘Connected Practice’ vision
MYOB today released its 2017 financial results to the market reporting double digit growth across all key financial measures, together with record online subscriber growth of 60 percent, driven by new small business customer wins and increasing online migration.
Delivery of the Connected Practice vision and focused investment in the MYOB platform of integrated services are generating significant efficiencies and savings for SMEs and Advisers, and driving strong uptake in MYOB’s suite of online tools.
MYOB sees significant growth potential in the payments sector, with the category representing a $1.2b total addressable market for fees from payments through accounting software platforms. Following the successful acquisition and integration of Paycorp in 2017, MYOB’s newly established payments division reported its first set of standalone results, generatingrevenues of $6.3 million for the 9 months to December 2017.
MYOB Chief Executive, Tim Reed said about the full year results: “I am pleased to report a strong set of financial results for the 2017 financial year. We strongly believe in our Connected Practice vision and as we invest to build out the MYOB Platform, we are seeing more and more accountants and SMEs embrace their digital future and migrate online, with record online subscriber growth in 2017. The rewards of automation and accurate data feeds are significant and generate greater efficiencies and savings for small business owners and their advisers.
“Our mission is to ‘simplify success’ for our customers. The addition of payments processing means SME owners can achieve more within the MYOB platform; everything from invoicing and superannuation, through to applying for a bank loan and running payroll.”
• Solid financial results delivering double-digit growth across all key financial measures
• Record online subscriber growth (up 60 per cent), driven by new SME wins, the highest ever online migration rate from active non-paying users and strong growth in online practice ledgers
• Customer lifetime value of subscriber base continues to increase with improvements in ARPU, retention rates and the uptake of Connected Services
• Delivery of the Connected Practice vision and focused investment in the MYOB Platform is generating real efficiencies and savings for SMEs and Advisers and driving rapid uptake in MYOB’s online practice tools
• MYOB’s new Payments segment opens up a $1.2 billion market opportunity; with Enterprise Solutions now recognised as the #1 ERP provider1 in Australia and New Zealand in its segment • Strong balance sheet and efficient capital management generating $73 million in capital returned to shareholders in 2017; net debt below 2.0x EBITDA
• Positive trajectory continues, with a regulatory decision on the acquisition of Reckon’s Accountant Group assets expected in 2Q18
• On track to reach one million online subscribers in Australia and New Zealand by 2020
Revenue for the 12 month period increased to $416 million, up 12 per cent on the prior year, and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew to $190 million, up 11 per cent on prior year. MYOB’s preferred measure of after tax profit, NPATA, was $102 million, up 10 per cent on prior year, with associated NPATA earnings per share (EPS) of 16.9 cents, up 8 per cent on prior year.
Commenting on the financial results, MYOB’s Chief Financial Officer Richard Moore added: “We are very proud to deliver this set of financial results, with double digit growth achieved across all key financial measures. MYOB is a market-leading provider of online business management solutions, with industry leading EBITDA margins of greater than 40%, and a proven track record of profitability and growth.
“We expect the positive growth trajectory to continue as we realise the significant upside in the payments and enterprise markets and as we continue to grow our online subscriber base and increase customer lifetime value. We see further potential for growth from the acquisition of Reckon’s Accountant Group assets, and expect a decision from the Australian and New Zealand competition regulators in the second quarter of 2018.”
Dividend and Share buy back
The Company’s balance sheet remains strong and as a reflection of this, the Board has declared a final dividend of 5.75 cents per share, bringing the full year dividend to 11.50 cents.
In August 2017, MYOB announced an on - market share buyback of up to 5 percent of the company’s issued capital. The company acquired more than $3 million in shares from existing cash in 2017, with a further $3 million purchased in January and February 2018. The dividend and buyback combined represents a total of $73 million of capital returned to shareholders in 2017 and a total of $170 million of capital returned to shareholders from listing to 31 December 2017.