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Paychex Inc. has endured the brunt of a sluggish economy and sees growth on the horizon, president and CEO Martin Mucci told shareholders at the company’s annual meeting on Wednesday.
At the meeting, Mucci outlined a fiscal year that he said reflected solid progress despite less-than-ideal conditions. In fiscal 2013 the company reported total revenue of $2.3 billion, a 4 percent increase from the $2.2 billion in fiscal 2012.
Paychex earned $569 million in fiscal 2013, up from $548 million in 2012.
“We’re very proud of our fiscal 2013 results,” Mucci said. “We reached our highest ever services revenue, and did it in a sluggish economy.”
On Wednesday, the Paychex board of directors also declared a regular quarterly dividend of 35 cents a share, payable Nov. 15 to shareholders of record as of Nov. 1.
Mucci said he is looking forward to more growth from Paychex in the coming years, in part due to opportunities created from the Affordable Care Act.
“We’re offering businesses solutions for health care reform, and we’re proud of the fact that we got out very early with health care products and solutions,” Mucci said. “I think it will be a net positive for us, even though it may hurt some business growth.”
Paychex remains strong in its market, with 570,000 payroll clients, placing it No. 1 among small businesses and No. 2 for mid-market companies. The company has another 25,000 human resources services clients and 62,000 for retirement services.
Paychex has also grown to more than 100,000 insurance clients, making it a top 25 company nationally, Mucci said.
There is also great potential in Brazil, where the company has just begun to establish a presence, and Germany, where it has been growing for several years, he added.
In Brazil, Paychex will be able to tap into a market of close to 5 million small and midsize businesses, Mucci said.
“It’s going to take a while to grow there, but we have a great opportunity,” he said. “There is no significant competition there. ADP is there, but they’re working mostly with larger companies.”
Paychex stock (NASDAQ: PAYX) was trading midday at $40.97, up a quarter from Tuesday’s close.
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