Growth propels MYOB earnings

Growth propels MYOB earnings

Australian software vendor, MYOB, has seen earnings before interest and tax (EBIT) jump 40 per cent on the last half year, and operating revenues rise 12 per cent to $50.1 million.

MYOB CEO, Craig Winkler, said the results reflected strong recurring revenue and growth across the whole business.

Winkler said upgrades, support and services accounted for 70 per cent of income.

MYOB had also grown the number of customers on support and main-­tenance plans by 13 per cent to more than 110,000.

"We've been growing our recurring revenue year-on-year," Winkler said.

"It was four per cent in 1991 and it's been growing ever since."

MYOB had also been working at operational efficiencies business on top of revenue growth, through improving its intellectual property/ product development and growing its EBIT down margin, he said.

"We've just been practicing what we preach," Winkler said.

"We're out trying to help business owners run a good business plus we use a lot of our own products internally."

The degree of the channel's contrib­ution to MYOB's success had remained constant, Winkler said.

Retail software licence sales accounted for about 30 per cent of earnings.

However, the accounts division of the business had increased substantially through its acquisition of Solution 6 in March.

Integration of the software vendor into MYOB was completed in mid-August.

On top of doubling MYOB's staffing levels to more than 1000 people, the acquisition had radically changed the mix and structure of the business, Winkler said.

"Historically, we've had 88 per cent of revenue coming from our business division and 12 per cent from the accounts division," he said. "With Solution 6 fitting into our accounts division, it's now roughly even at 50/50."

Winkler said the new MYOB M-Powered services business had also gained significance over the past six months.

While not a strong contributor to its balance sheet last year, MYOB saw its services business as a key growth area, he said.

"The contribution of these services isn't huge this year," Winkler said.

"But it is a growing area and is more about what it's going to do for us over time."

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