Class plans “significant” new features for Class Super in Q1 2019, as growth slows

Class Ltd is planning to release a number of “significant” new features for its Class Super software in the first three months of 2019, as growth in SMSFs using the software slows.

The announcement accompanied the company’s quarterly update to the stock market, which reported an increase of Class Super accounts by 1,529 for the December 2018 quarter. This took the total number of SMSFs using Class Super to 167,631. The increase in new accounts would have been higher, but the figure is “net of ~1,000 AMP suspensions”. Read more...

Class Limited CEO Kevin Bungard to step down

Class Limited has announced that CEO Kevin Bungard is stepping down “by mutual agreement with the board”.

“Having achieved a strong market position in the SMSF administration software sector, Class is now well-positioned to expand its reach and to leverage its platform into the broader wealth management industry,” said a statement by the listed company.

“Mr Bungard and the board have agreed that the next stage of the company’s growth requires new leadership, and this is the right time for him to hand over the reins. A search has commenced for a new CEO, and this will include the evaluation of potential internal successors.”

Mr Bungard has been CEO of Class Limited, which makes Class Super and Class Portfolio, since April 2014.

According to Class, Mr Bungard will step down as CEO after a “brief transition period”. CFO Glenn Day will then become acting CEO.

“Mr Bungard will remain available to consult to the company during the balance of his three months’ notice period.”

Class Chairman Matthew Quinn said: “On behalf of the Board, I thank Kevin for his hard work and commitment and wish him well for the future.”

“Under his leadership revenue and profits have grown strongly and Class is now a well-established and respected listed company. He should be proud of his achievements.”

Mr Bungard said: “It has been a pleasure to work with such talented people and to build Class into the industry leader it is today. There are great opportunities ahead for the company and after ten years at Class, including four as CEO, the board and I feel it’s the right time to hand over to someone with the skills and experience to lead Class through its next phase of growth.”

The statement from the company was released late on Wednesday afternoon, after the close of the stock market.

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Class Super SMSF growth slows in September 2018 quarter

Class Ltd has seen much slower growth in SMSFs using Class Super in the latest quarter.

Class Super accounts for the September 2018 quarter were up 2,638. This is the lowest of any September quarter since at least 2013/14 and the second lowest of any quarter over that period, after March 2014.

For comparison, SMSFs using Class Super were up 4,526 in the June 2018 quarter, and up 6,232 in the September 2017 quarter.

Class said these lower growth figures were anticipated. “Lodgment extensions made for a slow start in July and August with nearly half of the new customers for this quarter signing up in the month of September,” said Class Ltd in its Quarterly Shareholder Update.

“Over 3,800 new SMSF accounts were added for the quarter. The impact of ~1,200 funds suspended by AMP delivered a net increase in Class Super accounts of 2,638, taking the total SMSFs to 166,102 for the period.”

Figures aren’t yet released for the number of SMSFs as at 30 September 2018. The most recent statistics from APRA – which are for June 2018 – showed there were 596,225 SMSFs. Which would indicate a market share for Class Super of under 28%. In August the company announced that it had an SMSF market share of approximately 27%.

Class said AMP is continuing the process of migrating accounts off of Class – as at 30 September 2018 they had around 7,100 SMSFs still on Class.

“Excluding AMP, our retention rate remains strong at 99.6%,” said Class.

“An increase in customer sign-ups late in the period provides momentum heading into the December quarter. SMSFs to be loaded by those sign-ups, along with the launch of our ‘Do More’ sales campaign, are expected to see a repeat of the success we saw in the December quarter last year.”

Class Super accounts were up 7,131 in the December 2017 quarter.

“Now that the more stringent caps, limits and event-based reporting (TBAR) are ‘business as usual’, we expect the ongoing pressures will accelerate the adoption of Class Super as practices seek efficiency.”

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Class Super reaches 27% SMSF market share

Class Super has reached 27% SMSF market share, according to the annual results for Class Ltd.

The company announced that SMSF market share was up 3% for the year, to approximately 27%, based on there being 600,000 SMSFs.

The Class announcement said the company had seen “strong growth and continued momentum in revenue and earnings,” for 2017/18.

Total revenue was up 18% for the year. Net profit after tax was up 9%, and there was a 14% increase in EBITDA.

“Revenue was primarily driven by growth in billable accounts which increased by 25,469 in the last twelve months,” said Class, across both Class Super and Class Portfolio. At 30 June 2018 there were 163,464 billable SMSFs using Class Super.

“Class has continued to deliver record revenue, increase market share and deliver solid account growth this year,” said Class CEO Kevin Bungard.

“The Federal Government’s Super Reforms have vastly changed the SMSF and wealth industry, and the complexity of reporting has further driven the need for cloud solutions,” he said.

“Class is the leading cloud provider of SMSF and wealth accounting software and is in an excellent position to capture these new entrants to the cloud market, while also continuing to win market share from competitors.”

“We remain confident that although disruptive for the industry in the short term, the Super Reforms have increased the need for Class software and we expect they will have a positive impact in the longer term.”

Class declared a final fully franked dividend of 2.5 cents a share for 2017/18. The AGM will be held on 15 October 2018.

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Class Ltd sees record account growth for a March quarter

Class Ltd saw record March quarter account growth, adding 6,102 accounts to its Class Super and Class Portfolio products – taking the total to 164,255, according to its quarterly shareholder update.

4,885 of the account growth was for Class Super, which had 158,938 accounts at the end of the quarter.

“This growth was helped by clients who signed up under the Q2 ‘Better move’ campaign and continue to load their SMSFs onto Class Super,” said Class.

The announcement to the market said AMP continues to migrate accounts off of Class. At the end of the March quarter AMP had around 8,800 SMSFs still on Class, which says account growth would have been around 7,000 for the quarter “were it not for AMP’s migration”.

Class customers grew by 25 – to 1,316 – in the quarter, the slowest growth for the March quarter over the last five financial years. Though the customer growth in the preceding December quarter was the highest of any quarter over the same period.

Class Portfolio accounts grew 30% to 5,317, with 30% of Class Super clients also using Class Portfolio.

“The Q3 Class Portfolio ‘Profit. Ability’ campaign received a strong response, with 1,217 portfolios added via a mix of cross-sell and new business. The campaign has also generated a healthy prospect pipeline which is expected to drive sales activity through Q4 and into FY19.”

Class said it would soon release its SMSF Benchmark Report for the March 2018 quarter.

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Class Ltd profit up 19% in first half 2017/18

Class Ltd, which makes Class Super and Class Portfolio, grew its profit by 19% in the first half of the 2017/18 financial year.

“Class’ continued growth demonstrates a strong business which remains the market leader in cloud based SMSF accounting software,” said Class CEO Kevin Bungard.

“Our recent investment in the non-SMSF product is also paying off with growing market penetration of our Class Portfolio product.”

Sales revenue for the half year ending 31 December 2017 was up 21% to $17.010 million, with net profit after tax up 19% to $4.297 million.

At the end of the calendar year Class had 158,153 accounts, which included 154,053 SMSFs using Class Super.

29% of Class Super’s 1,287 customers are also using Class Portfolio.

For the half year, there were 13,363 new Class Super accounts, up 9.5%, across 127 new customers, up 10.9%. Class says it has 25% SMSF market share.

“As we have noted in previous market updates, AMP has a stated intention to, over time, migrate their funds to their own software. We understand that AMP has now commenced this migration process. No notice or timeframe for the completion of this migration has been provided.”

According to the release AMP had 9,500 funds on Class, as at 6 February 2018, representing less than 5% of ‘Annualised Committed Monthly Revenue’ (ACMR).

Class Ltd declared a fully franked interim dividend of 2.5 cents per share.

SMSF Annual Return lodgements are 14% behind this time last year, potentially as a result of the recent super reforms, says Class Ltd, which expects adoption of automation will accelerate further over coming years.

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Class Ltd sees record account growth for a December quarter

Class Ltd has seen record growth in accounts for a December quarter, the company announced.

Total accounts – including Class Super and Class Portfolio – increased by 7,600 in the December 2017 quarter, to 158,153. Class Super accounts represented 7,131 of this increase, taking its total accounts to 154,053.

“This is a very strong result given the time of the year and was achieved with the help of an extremely effective sales and marketing effort,” said the statement by Class.

This may have been driven, in part, by the superannuation reforms which took effect in 2017.

“Our ‘Better Move’ campaign successfully incentivised firms, who were deferring migration due to Super Reforms workloads earlier in the year, to move this quarter.”

Class also saw a record quarterly increase in customers, adding 87 taking the total to 1,291.

Class has 1,287 Class Super subscriber practices, with an average of 120 SMSFs per practice.

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KPMG to use Class Super in SMSF admin business

KPMG, one of the Big Four accounting and professional services firms, will use Class Super software in its SMSF administration business.

Class Ltd, which makes Class Super along with Class Portfolio, announced that it had entered an agreement with KPMG.

“The agreement will see KPMG use Class Super in its SMSF administration business and Class Portfolio in its business advisory group,” said the announcement.

Class Ltd CEO Kevin Bungard welcomed KPMG’s decision, saying one of the biggest advantages to using an automated reporting and administration software like Class Super was the potential for business growth.

“Class Super delivers business changing efficiency and automation for firms of all sizes, whether it is a suburban accounting practice with a handful of SMSFs or a professional services giant like KPMG,” said Mr Bungard.

“An automated solution to SMSF administration is no longer a nice-to-have, it has become a necessity,” he said.

“Accountants still using desktop software or manual methods need to put in place a system to enable them to cope with TBAR [Transfer Balance Account reporting].”

Class Ltd, which is listed on the ASX, closed down 4.255% on Monday, to $2.70.

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BGL disputes Class claim to be first to support Simple BAS

Class Ltd says it is the first SMSF software provider to deliver Simple BAS functionality, a claim that is disputed by BGL.

Class announced on 26 October that it was the first to include Simple BAS functionality in its software, Class Super and Class Portfolio.

Simple BAS is a government initiative intended to reduce the complexity of GST record-keeping and reporting. It was announced in the 2016 Budget, and started on 1 July 2017 – making 28 October the first due date for quarterly BASs since its introduction.

Class Ltd CEO Kevin Bungard said: “We are pleased to have released Simpler BAS support in advance of the reporting deadline – the first SMSF software provider to do so. The ability to lodge BAS through Class software has always delivered significant time savings for our customers.”

However this claim is disputed by BGL, which makes Simple Fund 360.

“BGL released Simpler BAS in our market leading SMSF admin software, Simple Fund 360, on 12 October 2017,” said BGL Managing Director Ron Lesh, in a post on the BGL website.

“We did not however think this warranted a media release. We have much more important things to inform the market – like the partnership with BT we announced today that will provide our clients massive benefits,” Lesh said, seemingly referring to Class, without naming the company.

“So is this claiming a ‘first’ just more false and misleading advertising ? Probably. Seems to be a way of life for some people,” said Lesh.

Mr Lesh had earlier in October – before the media release by Class –  posted an article asking: “

Should there be truth in advertising in the SMSF software industry? Read more...

Class Super now has 25% SMSF market share

Class Super now has 25% market share, based on an estimate 598,000 SMSFs, up from 24% as at the end of the 2016/17 financial year, according to the latest Class Ltd Quarterly Shareholder Update.

Class Ltd has also passed the 150,000 account milestone, counting Class Super and Class Portfolio, across 1,204 customers. The number of Class Super accounts increased by 6,323 to 146,922. 28% of Class Super customers also use Class Portfolio, which saw growth of 12%, to 3,631 accounts.

“SMSF accountants continued to be impacted by the implementation of Super Reforms. Class achieved a very high win ratio for customers moving to the cloud, but many potential customers deferred their decision resulting in lower than expected accounts growth for the quarter,” said a statement from Class Ltd.

“We strongly recommend that accountants move to the cloud now rather than waiting until after the second wave of Super Reforms, as further delay could make compliance more difficult, and we have recently launched several marketing campaigns to get this message across.”

“As well as decision deferral, Super Reforms are also driving industry consolidation, especially at the smaller end of the market. This quarter 12 customers assigned their licences to larger Class customers and we expect to see further consolidation over the next 12 months.”

Class Ltd will be holding its AGM on 16 October in Sydney.

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