AVITA Medical Ltd

Stock Zoomed ~228% in Last 3-Months: AVITA Medical Limited (ASX: AVH) is an ASX listed, global regenerative medicine company that provides a novel approach to skin regeneration. The company recently announced a new issue of 700,000 fully paid Ordinary Shares at $0.061 per share. The purpose of the issue is to exercise of unlisted options expiring 3 January 2028.
 

Financial Highlights (Source: Company reports)
 
1H FY19 Financial Performance: Sale of goods at $1.81 million during 1HFY19 was up 198% over the previous period of $0.60 million.Increase in the sales was pertained majorly to the U.S. market as a result of the September 2018 FDA approval of the RECELL® Autologous Cell Harvesting Device (RECELL® System). Gross margin for 1HFY19 was 69% as compared to 56% for 1HFY18, which are further expected to increase as sales ramp up within the U.S. Operating costs for the period was $21.93 million, up 91% over the previous period figure of $11.48 million due to investments in commercial, manufacturing and system capabilities for the U.S market launch of the RECELL System. Net comprehensive loss after tax also increased by 94% from $7.30 million in the previous period to $14.20 million in 1H FY19.
 
Net proceeds of ~$25.4 million were received by the issuance of shares under Institutional placements of shares to the U.S., Australian and international institutional investors. The cash on hand of the company as at 31 December 2018 shall help in fully funding the U.S launch and commercial sales ramp up along with the development programs planned.
 
Stock Recommendation:The share has generated returns of 21.05% and 228.57% over a period of 1 month and 3 months, respectively. According to the above-stated parameters, and plans in the pipeline, the company is poised for future growth, going forward. Hence, we give a “Hold” recommendation on the stock at the current market price of $0.450 per share (down 2.174% on 30 May 2019).
 

LiveHire Limited

Decent Outlook: LiveHire Limited (ASX: LVH) is a talent acquisition and mobility platform that makes managing the flow of talent, into and through a business, seamless. The company recently announced that the LiveHire ecosystem has surpassed critical mass of 1 million Talent Community Connections.
 
Snapshot Of Financial Performance: The company recently, announced its Quarterly Report and Cash Flow Report for the period ending 31 March 2019. According to the report, the Annualised Recurring Revenue (ARR) increased by 20% to $2.47 million as compared to the previous quarter. The Annualised Recurring Revenue Per Client (ARRPC) increased by 12% to $35,752 on q-o-q basis. Total Cash Receipts stood at $933,000 for the quarter ended March 2019.
 

Key Business Metrics (Source: Company’s reports)
 
Additionally, the management informed that the company hasentered the US market beginning with 5 client implementations through the Partner Channel (RPO – Recruitment Process Outsourced; MSP – Managed Service Providers; Career Management and SI – System Implementers). The company also entered the Outplacement market in Australia with The Careers Insight Group. It also released the first LiveHire High-Volume-Hiring product with Vodafone and Super Retail Group.The company raised $15 million in the month of March to expedite the Channel Partner deployments and enter the US market. As at 31 March 2019, the company had $37.8 million cash at bank.
 
Stock Recommendation:On the stock performance front, the company has given negative returns of 17.35% and 27.68% in the past 1 month and 3 months, respectively. By looking at the performance in the quarter in terms of growth in Annualised revenue, the liquidity position, and increasing footprints in other geographies such as the U.S. and Australia, we are optimistic on the stock for future growth. However, the conversion of this business growth into profit will be one of the primary parameters to gaze upon. Hence considering the above-mentioned parameters and current trading level, we give a “Speculative buy” recommendation on the stock at the current market price of $0.445 per share (down 4.301% on 30 May 2019).
 

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