Shares in accounting software provider Reckon Ltd fell 3% yesterday after the company’s annual meeting heard the company is seeing improved business conditions in 2011 as demand for its products recovers.
The shares dipped 7c to $2.25 then recovered a touch to end at $2.28 by the close.
That was a loss of 4c or 1.7%, in a market that was quieter than Monday’s madness, but still finished in the red.
Chairman John Thame told the meeting that Reckon was on track to increase annual profit from its $17.2 million result in calendar 2010.
"The prospects for 2011 already show an improvement with the lag of the global financial crisis that hit accounting firms now showing signs of relief and renewed customer interest," Mr Thame said.
Reckon operates three divisions – a business division which sells software through retail outlets, a professional division which offers products to large firms, and the nQueue BillBack division that focuses on the legal profession in the US.
Mr Thame said, "As far as the opportunities are concerned, we are seeing in the Professional Division that orders for the first quarter of 2011 are well up on the same period in 2010, and we hope to see the delivery of these orders taking place over the rest of this year".
In the business division, Reckon expected strong and steady growth in its QuickBooks products, while the company continues to pursue market share growth in the nQueue BillBack division, Mr Thame said.
Earlier this month, Reckon took a 4.97% stake in Melbourne IT Ltd for $7.3 million, and said it intended to explore a commercial relationship with the web host.
"We can’t really provide much more information at this stage beyond what was announced but can tell you that management presently see Melbourne IT as having a range of products, especially in the IT services area, for example: hosting, e-mail exchange servers, domain security and the like, that present logical accompaniments to the products and services we currently offer small businesses.
"There may also be opportunities for our Professional Division.
"On that basis we thought it made sense to acquire a stake in what might become a strategic partner.
"It is early days and we continue to explore the commercial potential between the two companies," Mr Thame told the meeting.
That lack of anything concrete about what Reckon wants from its Melbourne IT stake is perhaps why the shares were sold down, despite the forecast of a good year ahead.
Ruralco Holdings yesterday made its updated profit guidance for the first half, sending the shares up nearly 3% or 9c, to $3.33.
The company said in its interim profit report to the ASX that first half earnings were up 31.5% to $10.23 million from $7.78 million in the first half of 2010.
Revenue increased 14.9% to $493.7 million and earnings before interest expense and tax (EBIT) rose 36% to $22.8 million.
Ruralco will pay a fully franked interim dividend of 9c per share, compared with 8c a year earlier.
Chief executive John Maher said favourable market conditions across rural supplies, livestock and wool, grain marketing and financial services with the continued growth of new businesses provided a cautiously optimistic outlook.
He said that the results for the rest of the fiscal year would be dependent on favourable seasonal conditions across the country and continued strong commodity prices.
"Current soil moisture conditions in many parts of Australia are a positive sign for strong winter cropping and demand for agricultural inputs," he said.
At the start of this month, Ruralco said in an update that it "expected reported net profit after tax (NPAT) for the half year ended 31 March 2011 to be in the range of 25% to 35% higher than the previous corresponding half year’s reported result of $7.8 million.
"Underlying NPAT, before non-recurring items, is expected to be 20% to 30% higher than last year’s result of $8.0 million."
Sydney-based supplier of branded goods into specialist markets HGL was another company reporting yesterday to make the guidance posted in a trading update at the start of this month.
The company revealed an underlying profit of $4.1 million (unchanged from 2010’s $4.1 million) for the six months to March 31, 2011 in a statement to the ASX.
And senior management forecast a higher profit for the second half of the 2011 year.
Statutory profit for the first six months of the 2011 year was $4.1 million, the corresponding figure last year was $7.8 million including $3.7 million profit from the sale of listed shares. HGL sold all listed security investments in 2010.
Directors declared an unchanged fully franked interim dividend of 6c a share.
The company said total sales fell 3% to $81.8 million (2010: $84.8 million) for the half year.
The company said the "underlying profit has been maintained without the positive impact in the previous corres
