MYOB has strengthened its position as Australia’s leading business solutions provider by lifting revenue for the year to December 2013 by 13% to A$246.6m and delivering EBITDA of A$120.9m, up 14%.
Today’s financial results announcement arrives one fortnight after the company announced it will launch a series of innovative cloud solutions in 2014 for businesses and their advisors.
In FY2013 MYOB maintained its cash conversion rate at more than 80%, with strong cash flow generation and continued improvement in debt covenants. Operating expenses increased by 10% due to ongoing investment in cloud innovation - at its core, making cloud accounting easy for every business - the acquisition of BankLink and rapidly growing the MYOB sales/support team to meet rising client demand for an expanding product suite.
CEO Tim Reed said the strong full-year result was driven by the company’s strength across all accounting platforms and client groups coupled with a healthy contribution from the BankLink business acquired in mid-2013.
“The evolving needs of small and medium businesses have driven a significant increase in sales of our cloud accounting solutions, which now account for half of all new product registrations. That has grown significantly in the past year, up from 25% one year ago,” he said.
“While we believe cloud technology provides tremendous benefits to SMEs, different businesses have different needs. That is why we pride ourselves on offering a choice of cloud solutions, starting with MYOB Essentials, which is great for those new to accounting software, and MYOB AccountRight, which makes it easy for businesses to move from the desktop to the cloud. We have also invested in innovative mobile solutions, and are confident all our solutions offer better value than alternatives.
“I believe it is this combination of making it easy, enabling on-the-go business and delivering better value that has led to such a rapid adoption of our online accounting solutions by existing clients.”
Key FY2013 Highlights
Strong growth driven by BankLink acquisition contribution and cloud subscription uptake:
• Revenue of A$246.6m and EDITDA of A$120.9m, up 13% and 14% respectively
• Recurring revenue increased to 92% of total revenue, up from 88%
• Strong cash flow conversion (80%+)
• Debt covenant metrics continue to improve
• 22% of paying base now actively use cloud files, up from 7%
• 52% of all new product registrations in December 2013 were for cloud accounting, up from 25% in December 2012
Ongoing investment and innovation in talent and new generation products:
• Investment in research and development of A$36m, up 20%
• Strategic increase in sales force to support MYOB product launches
• Staff headcount increased to 1,000, up 18%
• Forthcoming release of MYOB PayDirect mobile payments app as a category first
• Increased focus on micro business with BankLink and upcoming launch of MYOB Essentials
Supporting approx. 1.2 million businesses and 40,000+ accountants and other partners in Australia and New Zealand, MYOB generated more than 2.5 times the revenue of its nearest competitor.
Along with last year’s acquisition of renowned accounting solutions provider BankLink, MYOB introduced an application programming interface (API) for its cloud-enabled desktop product for SMEs, AccountRight Live, and another for its business management solution for mid-sized businesses, EXO Business. It also launched conversion services for potential clients to easily switch from a competitor accounting solution.
Natasha McDowall, director of accounting firm Tael Solutions, said,“In the last six to 12 months people had started to move back to MYOB because MYOB products have more features for a lower price.”
In 2014 MYOB will broaden its cloud-based business management offering for SMEs and accountants, including launching a mobile payments app, an app that integrates deeply with AccountRight Live and an API for LiveAccounts, its browser-based accounting solution for start-ups and smaller businesses. It will also continue enhancing its existing products as it expands its software development and in-field teams (the latter increasing on what is already the industry’s largest) and increases its market-leading research and development investment.
Mr Reed said MYOB was in a strong, sustainable financial position as it grows its client base and continues to deliver superior innovative products and services.
“In servicing 1.2 million client businesses and over 40,000 accountants and other partners across Australia and New Zealand, we already generate more than two-and-a-half times the revenue of our nearest competitor. And we have the largest professional partner network across both markets,” he said.
“In 2014 we’ll meet the needs of micro, small and mid-sized businesses even further by developing and taking to market cutting-edge, easy to use solutions that provide great value to business owners. We’ll ensure they have what the need at their fingertips whether they’re working from the office, at home, in a café, on the road or elsewhere.”
Contact: Jim Stiliadis - Haystac Corporate Affairs
P: 03 9693 6445 - E: jim.stiliadis[.]haystac.com.au.
About MYOB Australia
Established in 1991, MYOB (myob.com.au) is Australia's largest business management solutions provider. It makes life easier for approx. 1.2 million businesses across Australia and New Zealand, by simplifying accounting, payroll, tax, practice management, CRM, websites, job costing, inventory and more. MYOB provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and now spends more than AU$30 million annually on research and development. In 2013, MYOB expanded its offerings with the acquisition of accounting solutions provider BankLink.