LiveHire Ltd.

Robust growth in ARR and ARRPC: LiveHire Ltd. (ASX: LVH) stated in its recent release that it has secured a latest enterprise agreement with Korn Ferry RPO (Recruitment process & outsourcing) firm. The contract involves recruitment for one of the prominent real estate groups. This agreement would lead to a significant rise in the Annualised Recurring Revenue (ARR) of the firm.
 
For the Quarter ended 30 September 2018, LVH witnessed an ARR growth of 22% on quarter on quarter basis. This growth in ARR was on account of the success in the winning of 10 contracts. The average recurring revenue per client (ARRPC) grew significantly and came in at $27,885. This was on the back of the continued trend of winning larger clients.


Group Revenue and ARRPC (Source: Company Reports)
 
Meanwhile, the stock price has fallen by a substantial 27.34% over the past six months as on 3rd December 2018. This fall has provided a great accumulation opportunity for the long-term investors. The group has lower solvency issues Hence, considering the phenomenal growth in the key operational metrics such as ARR and attractiveness in terms of value, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.50.
 

TheCitadel Group Ltd.

Robust Organic Growth: The Citadel Group Ltd. (ASX: CGL) stated in its recent release that it has acquired the government business of Gruden Pty Ltd. which is a government SaaS (Software as a service) platform from IncentiaPay for a sum of $1.65 million. This acquisition would further strengthen the competence and capabilities in the significant government sectors. Moreover, the company’s organic growth seems to be on track, which is evident from the fact that the firm has bagged contracts for CHARM, Citadel -IX and technology solutions. Apart from these, the firm has appointed Charles Pittar as the GM for its International operations, with the object of expanding internationally with more vigour.

The company achieved a revenue of $108.5 Mn for FY 2018 vis-à-vis $98.8 million in FY 2017. This rise was on account of the success on signing & progress of new contract, acquisition activities and improved execution of the prevailing contracts. The EBITDA margins were up by 13% on a Y-O-Y basis and reached at $34 million. This rise was driven by the management’s cost optimisation initiatives.

CGL’s Key Financial Metrics (Source: Company Reports)
 
On the Financial metrics front, the company registered a robust ROE performance of 20.5%, which substantially outperformed the Industry median. Meanwhile, the stock price has risen by a substantial 28.89% over the past six months as on 3rd December 2018. Hence considering the aggressive organic growth that the company is pursuing and better than Industry ROE, we maintain our “Hold” recommendation on the stock at the current market price of $8.30. 
 

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