Class Ltd has reported a 28% increase in profit for the second half of 2016, as Chairman Barry Lambert announced his retirement.
Class Ltd profit rose 28% in the six months to the end of December 2016, to $3.606 million, which Class attributed to a “record” increase in billable portfolios.
This profit excludes “one-off prior period costs” relating to the company’s IPO.
“Total revenue for the half year grew by 31% compared to the same period last financial year. This was assisted by a record 17,775 increase in billable portfolios to 130,216 portfolios, including 127,806 billable Self Managed Super Funds (SMSFs) on the Class Super product,” said a statement by Class.
Class calculates that it had a 21.7% market share of all SMSFs as at 31 December 2016, up from 19.2% six months earlier. Class puts its share of the cloud SMSF software market at 68% as at 30 June 2016, up from 64.8% a year earlier.
Class CEO Keven Bungard said the results confirmed the company as the “clear market leader” in the cloud SMSF software market.
“It has been another strong six months for the Class team. We have continued to experience record growth in billable portfolios on Class Super, and recorded the strongest period to date for the Class Portfolio product,” he said.
“The strength of Class is again demonstrated by the financial performance this reporting period. Class is executing its clear and consistent business strategy and remains in a strong position to consider other opportunities that may arise.”
Mr Bungard said the increase in billable portfolios was driven by both organic growth and new portfolios.
“Our data shows that 36% of SMSFs added during the December 2016 quarter were from new business won by accountants who have used Class for more than 12 months.”
“The typical accountant using Class for more than a year grows their businesses at 20% per annum or more than three times faster than the industry growth rate.”
The Class Ltd board has declared a fully franked one cent dividend for the second quarter of 2016/17.
Class Chairman Barry Lambert announces retirement
Barry Lambert, Class Chairman, announced his retirement from the Board of Directors, effective the same day as the release of the results. Mr Lambert said he was retiring to concentrate on his philanthropic work.
Matthew Quinn succeeds Mr Lambert as Chairman of Class Ltd. He joined the Class board on 1 July 2015, and was previously the Managing Director of Stockland. He is currently a non-executive director of CSR Limited and UrbanGrowth NSW, and Chairman of Carbonxt Group Limited and mPort Pty Ltd.