Ann: Selective Buy Back, page-2

This explains why they weren't executing the share buyback they announced after the last full year results. This is a much better outcome.

They've managed to acquire 11.45% of outstanding shares on a forecast FY14 p/e of around 11.5 (based on consensus 16c eps). I believe this is quite an efficient use of capital and will serve to step up EPS by a similar percentage (slightly lower as the buyback will be debt funded) and increase ROE.

FY13 included the final royalty payment to intuit. The royalty payment of $5.2m should in theory lead to a lift in after tax profit of $3.6m . Which on FY13's NPAT of $18.16m equates to an increase of 20%. Although, I was reading a morningstar report which suggested at least some of this will spent on additional sales and marketing, which i wouldn't be too unhappy with.

So without any revenue growth assumptions, I can identify two factors which could potentially increase EPS by ~30% over the next couple of years.

The big unknown as yet is whether the new cloud products (in particular xero) will cannibalise Reckon's existing sales in it's business division and whether Reckon one can compete in the cloud accounting space. I think this aspect is probably a little overstated, but I'm probably one of many investors waiting on the sidelines to see what Reckon can achieve with their new product launch. If they can genuinely compete with Xero, Myob, Intuit without the help of Intuit I think there could be some quite significant upside in this stock.