Move over Xero, here are two accounting software stocks on the move this morning
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The pair both offer accounting services, with IODM specialising in accounts receivables while Reckon has broader software focuses on accountants and SMEs.
Both accounting stocks are minnows compared to market giant Xero (ASX:XRO) but have also performed well in the last 12 months with Reckon up over 40 per cent, IODM up over 60 per cent and Xero gaining over 50 per cent.
But today both Reckon and IODM gained over 20 per cent, while Xero rose just over 2 per cent.
IODM (ASX:IOD) revealed it had signed its first client in the UK. The unnamed customer is in the education sector and represent over 30 per cent of the company’s last reported full year revenue of $645,000.
This deal came from IODM’s partnership with Western Union which enables Western Union to provide IODM’s platform to its own clients.
IODM says the total addressable market for education in the UK and the USA is worth $118.6 million in revenue per annum — $57.7 million just among Western Union’s existing business — and consists of over 1.6 million students.
“The focus will continue to be marketing this solution not just in education but replicating it through healthcare and other related industries in the short term, and demonstrate the efficacy of the WUBS partnership,” said IODM CEO Mark Reilly.
Novatti will pay $17 million for a 17 per cent stake which it will buy from institutional investors.
“Reckon has a steady revenue and earnings profile, with over 100,000 customers in its business group,” said Novatti managing director Peter Cook.
“The business has strong cash flow generation, has significantly paid down its debt and historically paid sustainable dividends to its shareholders.”
“We look forward to successfully completing the capital raising and joining the Reckon share register as a major shareholder.”