Record sales of Quicken software have pushed profits well over projections, with the company moving 105,000 units of SME accounting software in June alone.
In the six months to June, Reckon, the company behind Quicken software, sold more than 139,600 units of its QuickBooks products.
Reckon has posted software revenue of $35 million - five times that of the corresponding period last year - ending the half-year with a profit of $37,000. The result is a turnaround from last year's figures, where the company posted a $3.1 million loss in the same period. Earlier this year, the company backed out of a $6 million listing with Singapore Press Holdings.
The main costs associated with the year were incurred developing GST-compliant upgrades and high-speed production to catch up with market demand, company CEO Greg Wilkinson said.
"Our forecast took into account the GST explosion, but we have been quite staggered by unit sales," he said. "We shifted our distribution to Express Data so all we had to do was make sure the supplies got to the distributor. It could have gone a lot more smoothly, but even the retail channel had no idea of what would happen in June."
Quicken leapfrogged previous market leader MYOB to gain 51.5 per cent of the market. That trend continued in July, according to market analyst Inform, with Quicken holding 55 per cent market share. Wilkinson attributed Quicken's success to a well-timed advertising campaign and the ease of use of the product.
"Our ad campaign was timed to run with the Government's Unchain My Heart campaign," Wilkinson explained. "It was a nail-biting period but it had the correct result."
While the market is set to slow down significantly in the next six months, Reckon is now aiming to consolidate its customer base with upgrades and services. It expects around 25 to 33 per cent of customers will upgrade the product annually. Wilkinson also hopes to mop up the remaining 25 per cent of the market that haven't automated their businesses with its CashBook product.
Reckon will also take its QuickPOS software, the intellectual rights of which the company bought last week for an undisclosed sum, to the US market.
Two staff appointments have also been announced - David Swallow as chief operating officer and deputy chief executive officer and Steve Lemlin as chief financial officer.
Wilkinson said the company now has a customer base "nudging" 400,000, which it would use to drive traffic to its dot-com site which Wilkinson has indicated will be closed down if it is not profitable within 12 months time. The company will also focus on developing and launching personal investment products such as Share Analyser. Harvey Norman will sell a cut down version of the program with the Window ME release.
Not surprisingly, Quicken's call centre has been inundated in recent months. The company has begun charging for technical support and customer care.
Quicken and MYOB now own most of the SME market. Wilkinson said he would now like to see collaboration between the companies"There are two players - Quicken and MYOB - and then daylight. It is about time now that we enabled our customers to talk to theirs."