LiveHire Limited

 
88% Higher Annualized Recurring Revenue Aids Positive Outlook: LiveHire Limited (ASX: LVH) provides a human capital performance platform, which focuses on proactive sourcing and talent mobility solution known as Live Talent Communities. Recently, LVH announced the appointment of Michael Rennie as a non-executive Chairman.
 
FY19 Performance highlights for the period ending 30 June 2019:LiveHire Limited announced full year results for the financial year 2019 wherein the company reported a total revenue of $2.62 million, up 59% on y-o-y. Net loss for the year stood at $13.79 million as compared to a loss of $10.09 million during FY18. The company reported a robust top-line growth, aided by scaling up through partnerships with clients like Super Retail Group, Vodafone Australia, Dulux Group, ASICS, JD Sports etc. The company is building a pipeline of clients through direct sales in Australia, and partnerships in both Australia and the US, focusing on new client wins in both markets.
 
The company conducted a successful capital raising of $15 million during March 2019 via a placement of 25 million ordinary shares at $0.60 per share to the sophisticated and institutional investors.During the quarter, the company reported 65% y-o-y growth in Talent Community Connections (TCCs), followed by collaborations with 41 new agreements through both the Direct Sales and Partner Channels. The business reported Annualized Recurring Revenue (ARR) at $2.53 million during the year, up 88% on y-o-y. Number of clients at the end of the year was reported at 79 as compared to 53 in FY18.
 

FY19 Financial Highlights (Source: Company Reports)
 
Outlook:The Management highlighted the growth across both domestically and internationally and higher penetration in the US market through channel partners. The company is planning to enhance the portfolio of channel partners in the US and Australia. The company also focuses on accelerating client wins in Australia through Direct Sales.
 
Stock Recommendation:The stock of LHV is trading at $0.285 with a market capitalization of $84.12 million. The stock is trading close to the lower band of its 52-week trading range of $0.240 and $0.710. The stock generated negative returns of 26.58% and 43.69% during the last three-months and six-months, respectively. Thestock has corrected 7.94% and 6.45% in the last one month and five days, respectively, as at 30 September 2019.The company will be utilizing a strong pipeline of opportunities in key markets through accelerating client wins in Australia via direct sales and continued penetration in the US market. Considering the aforesaid facts, current price movements and business prospects, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.285, down 1.724% as on 01 October 2019.
 
 

LiveTiles Limited

Changes in Board:LiveTiles Limited (ASX: LVT) is in the development and sale of business software in Australia and overseas. It has a market capitalisation of ~A$ 297.3 Mn as on 1^st October 2019. Recently, the company through a release announced that Peter Nguyen-Brown, NIA Tech Pty Ltd <Odeon Discretionary A/C> and NIA Tech Pty Ltd <Mahogany Discretionary A/C> has made a change to their substantial holdings in the company and the current voting power stands at 12.18% in comparison to the previous voting power of 14.99% on 24^th September 2019. In another update, the company announced that it has appointed Dana Rasmussen as a non-executive director. It added that Cassandra Kelly has resigned from the Board of the company. Both have become effective on 27^th September 2019. The following picture provides an overview of FY 2019 figures (year ended June 2019):

Profit & Loss Statement (Source: Company Reports)

What to Expect:The company anticipates delivering another year of strong customer and revenue growth in FY20. It is focused on direct sales & marketing strategy targeting larger enterprises. The company has a large as well as growing addressable market. It is expecting substantial expansion opportunities with existing customers through cross-sell, bundling and increased penetration. The company’s publicly stated target is to organically grow ARR to at least $100 Mn by 30^th June 2021.

Stock Recommendation:During the financial year, the company has wrapped up the acquisition of Wizdom A/S, which is a leading European intranet software provider. On the stock’s performance front, it produced a return of 4.23% in the span of one month. However, on YTD basis, the stock delivered a return of 8.82%. As per ASX, the stock is trading below its 52-week low-high average of between $0.275 and $0.610. Hence, considering the above-stated facts and current trading levels, we give a “Speculative Buy” recommendation on the stock at the current market price of A$0.365 per share (down 1.351% on 1^st October 2019).

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