Executive Summary
Reckon Limited provides software solutions in Australia, the United States, and internationally. More Details
Rewards
Risk Analysis
Snowflake Analysis
Undervalued with acceptable track record.
Similar Companies
Share Price & News
How has Reckon's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: RKN has not had significant price volatility in the past 3 months.
Market Performance
7 Day Return
-6.3%
RKN
1.1%
AU Software
-0.4%
AU Market
1 Year Return
2.7%
RKN
31.2%
AU Software
-7.0%
AU Market
Return vs Industry: RKN underperformed the Australian Software industry which returned 31.2% over the past year.
Return vs Market: RKN exceeded the Australian Market which returned -7% over the past year.
Shareholder returns
| RKN | Industry | Market | |
|---|---|---|---|
| 7 Day | -6.3% | 1.1% | -0.4% |
| 30 Day | -11.8% | 9.6% | 4.3% |
| 90 Day | 4.9% | 22.4% | 4.3% |
| 1 Year | 9.7%2.7% | 32.2%31.2% | -3.8%-7.0% |
| 3 Year | -30.5%-39.5% | 123.0%115.4% | 17.0%2.3% |
| 5 Year | -58.9%-68.5% | 196.5%174.7% | 42.9%14.3% |
Price Volatility Vs. Market
How volatile is Reckon's share price compared to the market and industry in the last 5 years?
Simply Wall St News
1 week ago | Simply Wall St
What Does Reckon Limited's (ASX:RKN) Share Price Indicate?3 weeks ago | Simply Wall St
These 4 Measures Indicate That Reckon (ASX:RKN) Is Using Debt Reasonably Well1 month ago | Simply Wall St
How Much Did Reckon's(ASX:RKN) Shareholders Earn From Share Price Movements Over The Last Five Years?Valuation
Is Reckon undervalued compared to its fair value and its price relative to the market?
>50%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: RKN (A$0.75) is trading below our estimate of fair value (A$1.65)
Significantly Below Fair Value: RKN is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: RKN is good value based on its PE Ratio (10.4x) compared to the AU Software industry average (33.3x).
PE vs Market: RKN is good value based on its PE Ratio (10.4x) compared to the Australian market (21.3x).
Price to Earnings Growth Ratio
PEG Ratio: RKN is poor value based on its PEG Ratio (4.5x)
Price to Book Ratio
PB vs Industry: RKN is good value based on its PB Ratio (3.5x) compared to the AU Software industry average (5.7x).
Next Steps
Future Growth
How is Reckon forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?
2.3%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: RKN's forecast earnings growth (2.3% per year) is above the savings rate (2.3%).
Earnings vs Market: RKN's earnings (2.3% per year) are forecast to grow slower than the Australian market (18.3% per year).
High Growth Earnings: RKN's earnings are forecast to grow, but not significantly.
Revenue vs Market: RKN's revenue (2.4% per year) is forecast to grow slower than the Australian market (4.7% per year).
High Growth Revenue: RKN's revenue (2.4% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: RKN's Return on Equity is forecast to be high in 3 years time (33.3%)
Next Steps
Past Performance
How has Reckon performed over the past 5 years?
-14.8%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: RKN has high quality earnings.
Growing Profit Margin: RKN's current net profit margins (10.8%) are higher than last year (10.5%).
Past Earnings Growth Analysis
Earnings Trend: RKN's earnings have declined by 14.8% per year over the past 5 years.
Accelerating Growth: RKN's earnings growth over the past year (5%) exceeds its 5-year average (-14.8% per year).
Earnings vs Industry: RKN earnings growth over the past year (5%) underperformed the Software industry 21%.
Return on Equity
High ROE: Whilst RKN's Return on Equity (33.52%) is high, this metric is skewed due to their high level of debt.
Next Steps
Financial Health
How is Reckon's financial position?
Financial Position Analysis
Short Term Liabilities: RKN's short term assets (A$12.5M) do not cover its short term liabilities (A$17.0M).
Long Term Liabilities: RKN's short term assets (A$12.5M) do not cover its long term liabilities (A$44.9M).
Debt to Equity History and Analysis
Debt Level: RKN's debt to equity ratio (138.7%) is considered high.
Reducing Debt: RKN's debt to equity ratio has increased from 123.3% to 138.7% over the past 5 years.
Debt Coverage: RKN's debt is well covered by operating cash flow (31.9%).
Interest Coverage: RKN's interest payments on its debt are well covered by EBIT (8.8x coverage).
Balance Sheet
Next Steps
Dividend
What is Reckon current dividend yield, its reliability and sustainability?
5.33%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: RKN's dividend (5.33%) is higher than the bottom 25% of dividend payers in the Australian market (2.09%).
High Dividend: RKN's dividend (5.33%) is low compared to the top 25% of dividend payers in the Australian market (5.45%).
Stability and Growth of Payments
Stable Dividend: RKN's dividend payments have been volatile in the past 10 years.
Growing Dividend: RKN's dividend payments have fallen over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonable payout ratio (69.6%), RKN's dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: RKN's dividends in 3 years are forecast to be covered by earnings (71.4% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
16.0yrs
Average management tenure
CEO
Clive Rabie (60 yo)
2.25yrs
Tenure
AU$878,190
Compensation
Mr. Clive Alan Rabie is Group Managing Director of Reckon Ltd since July 1, 2018 and Executive Director of Reckon Ltd. since January 1, 2005. Mr. Rabie is Group Chief Executive Officer of Reckon Ltd. since ...
CEO Compensation Analysis
Compensation vs Market: Clive's total compensation ($USD624.56K) is above average for companies of similar size in the Australian market ($USD277.57K).
Compensation vs Earnings: Clive's compensation has been consistent with company performance over the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Founder & Independent Chairman | 2.25yrs | AU$131.40k | 8.25% A$ 7.0m | |
| Group CEO | 2.25yrs | AU$878.19k | 10.22% A$ 8.7m | |
| Group CEO & Executive Director | 2.25yrs | AU$809.25k | 0.18% A$ 150.2k | |
| Group Chief Financial Officer | 16yrs | AU$721.90k | 0.41% A$ 346.3k | |
| Company Secretary | 17.92yrs | no data | no data | |
| General Manager of Professional Division Australia and General Manager of Aps Australia | no data | AU$320.48k | no data | |
| General Manager of Professional Division - New Zealand | no data | AU$186.10k | no data |
16.0yrs
Average Tenure
59.5yo
Average Age
Experienced Management: RKN's management team is seasoned and experienced (16 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Founder & Independent Chairman | 2.25yrs | AU$131.40k | 8.25% A$ 7.0m | |
| Group CEO | 2.25yrs | AU$878.19k | 10.22% A$ 8.7m | |
| Group CEO & Executive Director | 2.25yrs | AU$809.25k | 0.18% A$ 150.2k | |
| Independent Non-executive Director | 2.25yrs | AU$43.80k | 0.57% A$ 488.2k |
2.3yrs
Average Tenure
61yo
Average Age
Experienced Board: RKN's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Reckon Limited's company bio, employee growth, exchange listings and data sources
Key Information
- Name: Reckon Limited
- Ticker: RKN
- Exchange: ASX
- Founded: 1987
- Industry: Application Software
- Sector: Software
- Market Cap: AU$84.971m
- Shares outstanding: 113.29m
- Website: https://www.reckon.com
Location
- Reckon Limited
- 100 Pacific Highway
- Level 2
- North Sydney
- New South Wales
- 2060
- Australia
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| RKN | ASX (Australian Securities Exchange) | Yes | Ordinary Shares | AU | AUD | Jul 1999 |
| RKN | CHIA (Chi-X Australia) | Yes | Ordinary Shares | AU | AUD | Jul 1999 |
| UVW | DB (Deutsche Boerse AG) | Yes | Ordinary Shares | DE | EUR | Jul 1999 |
Biography
Reckon Limited provides software solutions in Australia, the United States, and internationally. It operates through Business Group; Practice Management Group, Accountants; and Practice Management Group, L ...
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/10/24 10:38 |
| End of Day Share Price | 2020/10/23 00:00 |
| Earnings | 2020/06/30 |
| Annual Earnings | 2019/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.