LiveHire Limited

LiveHire broadens its revenue stream via a slew of tie-ups: LiveHire Limited (ASX: LVH) in the past one week has reported entering into two tie-ups, LiveHire announced on 8 March 2019 that it has signed an MSP/RPO channel partner agreement with Workforce Logiq. As per the deal, LiveHire and Workforce Logiq would initially commence with a commitment of 5 client implementation. Under the Workforce Logiq Agreement, LiveHire will provide its services to Workforce Logic on for an initial term which started on 6 March 2019 and will expire on the date that is 12 months after either 31 December 2019 or the commencement of services to the fifth client. In our view, this deal will support to enhance the LiveHire platform internationally in relation to large customer base.

Moreover, the company has recently announced its entry into the outplacement market by signing a statement of work with The Career Insights Group (TCIG), which is one of the recognized major firms in the global Outplacement Industry. The outplacement market is projected to grow to USD 2.37 billion by 2025, at a CAGR of 6.2%. This is yet another exciting and well-prepared step change in LiveHire’s growth wherein it will be benefitted by extending its platform further into the large global Outplacement market.

The company announced its 1HFY19 results, where it has reported revenue, from contracts with customers of $1,187,645 in 1HFY19 vs. $844,901 in 1HFY18, resulting in a growth of ~40.5% on PCP basis.However, the same performance was not seen in the company’s EBITDA, since the reported EBITDA loss was $5,703,962 in 1HFY19 vs. a loss of $4,877,890 in 1HFY18. This increased loss was due to continued investment in Product Development and other associated costs. The total loss after income tax came in at $5,717,812 in 1HFY19 vs. loss of $4,971,506 in 1HFY18. The Annualised Recurring Revenue has increased by 52% for the six months driven by 18 new clients, as of the presentation release date the company reported 64 clients in FY19H1 vs. 53 in FY18.
 

1HFY19 P&L Statement (Source: Company Reports)

Consistent top-line growth:LVH’s share price has appreciated by 38.54% in the past three months. Its top-line has shown consistent growth over the years, and the company is investing in product development activities and, hence reporting higher expenses. Further, the company has consistently added clients to its roster, and this might further aid in its revenue growth in the near term. Hence, considering the aforesaid facts and price rise in the recent past, we give a “Speculative Buy” recommendation on the stock at the current market price of $ 0.640 (down 3.759% on 13 March 2019).
 

LiveTiles Limited

LiveTiles is growing at almost 6x the rate of the SaaS industry:  LiveTiles Limited (ASX: LVT) reported a robust set of top-line numbers for 1HFY19. Annualised recurring revenue (ARR) reached $22.9 million as at 31 December 2018, reporting significant 232% increase on a YoY basis. $16.0 million (or 70%) of the company’s total ARR has been added in the past 12 months. The company’s ongoing high-impact campaigns and joint marketing initiatives with Microsoft is generating strong awareness and demand for LiveTiles’ intelligent workplace offering. The company reported a healthy rise in customer numbers, growing by 153 on a year-on-year to reach 598 paying customers as at 31 December 2018. Of these 39 customers contribute at least $100,000 (termed as large customers) up from 14 as at 31 December 2017. The Average ARR per customer was up 145% on YoY basis continuing its robust growth since past one year.


Average ARR per customer (Source: Company Reports)

The strategic relationship with Microsoft is going stronger. LiveTiles was named the first software partner to be accepted into Microsoft’s AI Inner Circle Partner Program in October 2018. The invitation acknowledges LiveTiles’ unique technology to drive business transformation using AI. On the 1HFY19 performance front, the company reported a Revenue of $5,677,075 in 1HFY19 vs. $1,903,249 in 1HFY18 a change of 198% on PCP basis. However, the growth in revenue did not aid the profitability and the company reported a loss of $22,769,721 in 1HFY19 vs. a loss of $5,921,020 an increase of 285%. The company has revised its guidance and LiveTiles’ objective is to organically grow ARR from $30.9 million as at 31 December 2018 to at least $100 million by 30 June 2021, which is six months earlier than the company’s own target.

Recently S&P Dow Jones added LVT into the All ordinary indices, effective from 18 March 2019. This might augur well for the technical demand for the shares of LVT since the demand for the shares from ETF’s would increase going forward.

Stock Recommendation:LVT’s share price has appreciated by 47.37% in the past three months and is trading slightly above the average of 52 weeks high and low level of ~$0.515. The company has improved its strategic relationship with Microsoft, and the ARR is showing robust growth since the past twelve months. Hence, considering the above factors and current trading level, we have a “Speculative Buy” rating on the stock at the current market price of $ 0.415 (down 1.19% on March 13, 2019).
 

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