The Myob Group Ltd (ASX: MYO) share price has climbed 7% to $3.80 this morning after the accounting platform provider delivered some better-than-expected financial results for the full year ending December 31 2016. Below is a summary of the results, with comparisons to the prior year.
- Revenue of $370m, up 13%
- EBITDA (operating income) of $171.5m, up 12%
- Net profit of $56.6m, up 25%
- Earnings per share of 16.5c, up 12%
- EBITDA margin of 46.3%, down 0.4%
- Number of online subscribers 249,000, up 47%
- Number of paying SMEs 585,000, up 7%
- SME Average Revenue Per User (ARPU) $406, up 7%
- Final dividend of 5.75 cps
- Cash balance of $61 million
These are some strong headline numbers and it's no surprise the stock has climbed in early trade as all metrics look to be travelling in the right direction for a business that provides cloud and desktop accounting platforms to mainly small-to-medium enterprise (SME) subscribers across Australia and New Zealand.
The cloud accounting space and associated software-as-a-service products it offers has taken off in Australia and New Zealand, the UK, US, and other parts of the world as rival operators like U.S. giant Quickbooks, UK operator Sage and New Zealand's XERO FPO NZ (ASX: XRO) fight to grab market share while the going is good.
MYOB is also a strong competitor that offers competitive pricing and a good product which is why it has been able to deliver a year of double-digit growth across the board.
Its chief executive also forecast another year of double-digit revenue growth in 2017 with EBITDA margins maintained in the 45%-50% range.
Selling for $3.82 the stock is on a trailing earnings multiple of 23x, with a trailing yield of 2.94%. This is a good looking company, but the shares are priced too richly for my liking. I would prefer Xero thanks to its founder-led nature, breakneck growth rates, UK growth, and global potential.
