Login | Register
Profile | Log out
logo

  • Home
  • News
  • Opinion
  • Satire
  • About
  • Contact Us
    • Contact
    • Get Covered
  • Subscribe
Submit An Article

Latest Articles

  • Miners set to tumble as Commodities take a hit
    Miners set to tumble as Commodities take a hit
    • Market Update

  • Fastest growing allied health group welcomes 16 new Partners
    Fastest growing allied health group welcomes 16 new Partners
    • News

  • Ingenia delivers despite challenges, holiday business bounces back
    Ingenia delivers despite challenges, holiday business bounces back
    • News

  • Getting taught a lesson from Doctor Copper
    Getting taught a lesson from Doctor Copper
    • Opinion

  • Novatti eyes blockchain partners following US tour to promote AUDD at top crypto conference
    Novatti eyes blockchain partners following US tour to promote AUDD at top crypto conference
    • News

  • Cobram to drizzle 9.5 million litres of olive oil over dishes across Australia after exceptional harvest yield
    Cobram to drizzle 9.5 million litres of olive oil over dishes across Australia after exceptional harvest yield
    • News

  • Desperate millennial bails on drinks to stay up till 12.01am and lodge tax return
    Desperate millennial bails on drinks to stay up till 12.01am and lodge tax return
    • Satire

  • Market consolidate on GDP update
    Market consolidate on GDP update
    • Market Update

  • There are no scorpions involved in this company’s latest cancer drug
    There are no scorpions involved in this company’s latest cancer drug
    • News

  • AML3D engaged by ExxonMobil for 3D printed machinery
    AML3D engaged by ExxonMobil for 3D printed machinery
    • News

ACCC and FIRB clear Reckon’s $100m sale to focus on its rapidly growing software business

  • In News
  • June 21, 2022
  • Alfred Chan
ACCC and FIRB clear Reckon’s $100m sale to focus on its rapidly growing software business

All regulatory hurdles have now been cleared for accounting software company Reckon (ASX: RKN) to proceed with the sale of its practice management business, clearing the path to focus on its cloud-based tech whose customer base is rapidly expanding. 

Due to the value of the sale of Reckon’s Accountants Practice Management Group (APMG) which is a subsidiary business, to The Access Group, the deal had to be reviewed by both Australia’s competition watchdog (ACCC) and the Foreign Investment Review Board (FIRB). 

Neither had any objections to the $100m sale which will now proceed unconditionally. 

Making the deal even more favourable for Reckon and its shareholders is the major market decline since the deal was first announced. The agreed $100m sale price is binding and will be paid in cash to Reckon before 2 August 2022. Such market volatility has disrupted other major deals linked to ASX companies, including the withdrawal of Latitude’s $335m acquisition of Humm’s consumer finance business last week. 

With the sale of APMG, Reckon will be able to focus its efforts on its cloud-based accounting software which continues to increase its market share. As the low-cost alternative to the likes of Xero and Myob, Reckon has been adding integrations that can be plugged into its platform to become an all-encompassing business management platform, rather than just bookkeeping software. 

This has been reflected in the customer base which has grown at an annual rate of 12% over the past decade for Reckon to now have more than 114,000 cloud-based users, primarily small business owners. This customer database is not included in the $100m sale of APMG. 

Driving the 12% annual user growth has been the continuous addition of new business functions that Reckon has added to its platform, driven by investment in its tech stack. Over the past two years, Reckon has deployed $39 million towards its development expenses while slashing debt and delivering $7.9m and $7.4m net profit after tax in FY21 and FY20 respectively. Upon completion of the APMG sale, Reckon is expected to be debt free while returning the remaining proceeds to shareholders in the form of a special dividend. 

In the coming months, Reckon has flagged the launch of three new cloud-based products that will include a new invoicing app, as well as ledger and business intelligence products. 

Other fintech solutions flagged by Reckon include business loans and banking services which will be deployed to its 114k client base as the Company addresses all business owner needs within one platform. 

The introduction of such services could potentially come via a strengthening of the partnership between Reckon and its major shareholder, payments company Novatti Group (ASX: NOV). 

Since securing a 19.9% strategic stake in Reckon in July 2021, Novatti has commenced supplying Reckon’s 114k users with digital payment services to accept online payments via Visa and Mastercard under a profit-share agreement. 

In a recent email to its shareholders, Novatti anticipates receiving about $8 million from Reckon’s special dividend. 

  • About
  • Latest Posts
Alfred Chan
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
Latest posts by Alfred Chan (see all)
  • Fastest growing allied health group welcomes 16 new Partners - July 1, 2022
  • AML3D engaged by ExxonMobil for 3D printed machinery - June 29, 2022
  • iCollege thrives as international students return, launching new gaming degrees - June 28, 2022
  •  
  •  
  •  
  •  
  • apmg
  • asx nov
  • asx rkn
  • digital payments
  • Novatti
  • payments
  • Peter Cook
  • reckon
  • the access group
  • visa mastercard
  • News

Leave a Comment

You must be logged in to post a comment.

  • About
  • Latest Posts
Alfred Chan
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
Latest posts by Alfred Chan (see all)
  • Fastest growing allied health group welcomes 16 new Partners - July 1, 2022
  • AML3D engaged by ExxonMobil for 3D printed machinery - June 29, 2022
  • iCollege thrives as international students return, launching new gaming degrees - June 28, 2022

Login or register for free to access unlimited reading

Register Now!
  • About
  • Latest Posts
Alfred Chan
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
Latest posts by Alfred Chan (see all)
  • Fastest growing allied health group welcomes 16 new Partners - July 1, 2022
  • AML3D engaged by ExxonMobil for 3D printed machinery - June 29, 2022
  • iCollege thrives as international students return, launching new gaming degrees - June 28, 2022
  • News

  • Opinion

  • Satire

  • About

  • Contact Us

  • Subscribe

Copyright © 2020 The Sentiment. All rights reserved.