MYOB sneaks up on competitors with online subscribers growing by 60%

A storm cloud at Coogee Beach in Sydney. Mark Metcalfe/Getty Images
  • Half year revenue was $218.5 million, up 7%.
  • Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) $92.7 million, up 3%.
  • Net profit after tax $25.28 million, 10.64%.

Net profit for cloud accountancy software player MYOB fell 10.64% to $25.28 million for the half year as its investment in product brought about a big take up in online subscriptions.

The company says online subscribers grew to 492,000, up 61% on the same six months last year, bringing MYOB closer to its 1 million target by 2020.

“This result puts us well on track to accomplish that,” CEO Tim Reed told Business Insider.

“94% of new small businesses coming to MYOB take out an online subscription and we’ve seen an increasing rate of desktop clients moving online.”

“We announced to shareholders late last year that we were going to go into a period of investment … both on the products we are building as well as the sales and markets efforts.”

That’s why net profit after tax fell.

“It was the increase in amortisation charges for the software that we developed,” he says.

Revenue for the six months increased 7% to $218.5 million and underlying EBITDA (earnings before interest, tax, depreciation and amortisation) grew 3% to $92.7 million.

In early trade, MYOB shares were down 5.4% to $2.95.

MYOB says its growth in cloud subscribers is overtaking that of its key competitors, as this chart shows:

Source: MYOB

The company declared an interim dividend of 5.75 cents a share.

The half year results:

Source: MYOB