Reckon Limited (ASX: RKN), the accounting software company, has announced leadership changes with its long-serving Chairman Ian Ferrier retiring effective 1 July 2018.
The current Group CEO Clive Rabie will step aside from day to day operations and hand over to a new CEO, Sam Allert, who is currently running Reckon's Australia and New Zealand operations.
Mr Rabie's new role will be to act as Managing Director, "allowing him to focus on corporate strategy and mergers and acquisitions while mentoring and overseeing the executive team during a transition period of about 2 years" the announcement said.
Shares in Reckon soared 33% in November last year when a potential $180 million sale of Reckon's accountant group to Myob Group Ltd (ASX: MYO) was announced.
They have since lost all those gains and are now down 37% from their November 2017 high after Myob pulled away from the deal following indications that the ACCC would not approve the merger.
What now?
With the Myob deal off the table, Reckon shareholders might be cheered by Mr Rabie's new mandate to focus on mergers and acquisitions.
There is a view that Reckon doesn't have the resources to invest in its Accountant Group which is why a sale to a bigger player would be preferable.
With cash on hand as at the last reporting date (31 December 2017) of $2m, almost 4 times the amount of debt to equity and a balance sheet dominated largely by intangible assets, that view has some merit.
Focus on users
Investors will now want to monitor whether Reckon can maintain or grow its user base. There is a risk that some users may transition to Myob or fast-growing competitor Xero Limited (ASX: XRO).
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