LiveHire Limited

 

LVH Details
 
LVH Wins US Direct Sourcing Contract with SASR: LiveHire Limited (ASX: LVH) is a recruitment services provider primarily engaged in the provision of cloud-based human resources software and platform services. On June 16, 2020, the company notified about its latest deployment in the global Managed Direct Sourcing market. As per the update, the company has won its latest US Direct Sourcing contract with SASR (Set and Services Resources). The estimated annual revenue run rate will be ~AU$440,000 after full deployment.
 
Other Recent Updates: Recently, the company announced that it has extended Christy Forest’s role as Chief Executive Officer of the company. In another update, the company stated that it has issued 308,477 fully paid ordinary shares, as a result of the exercise of 9.6 million options which were issued to the Directors of the Company as at the date of the Company’s listing, in connection with their services since the IPO. The options were exercised under the cashless exercise capacity with a market price of $0.2583.
 
LVH Expands its Technology Marketplace: On June 2, 2020, the company expanded its technology marketplace with 4 new integrations namely CVCheck, fit2work, Revelian and TestGrid. The company partners with the top technology companies in the Human Resource industry to assist its customers with fully integrated end-to-end talent acquisition and engagement programs. LiveHire’s Talent Acquisition platform has also won a new client with Rizing Australia, one of the leading SAP Success Factors Systems Implementers across the world.
 
Awarded Victorian State Government Contract for Staff Deployment:  On 26 May 2020, the company announced that it has won a contract with the Victorian State Government, under which the State Government will use LiveHire’s platform to profile, match, and engage current employees in order to transition them into critical roles across the State Government, in support of internal staff mobility.
 
March Quarter Update: For the March 2020 Quarter, the company had recorded an ARR (Annualised Recurring Revenue) of $3.3 million, an increase of 34% YoY. During the quarter, the company added 9 new clients, bringing the total number of clients to 106. Additionally, the 12-month trailing cash receipts increased 27% year over year and came in at $3.9 million. During the quarter, the company reported cash outflows of $4.43 million, in line with expectations. At the end of the quarter, the company had cash on hand of $23.4 million with zero debt in the balance sheet.
 

March Quarter Highlights (Source: Company Reports)
 
Growth Opportunities: LVH is uniquely positioned to deliver use cases in these economic and shifting workforce conditions. The company has expanded the number of multi-year contracts to deliver additional strength to the client base.
 
Risk Analysis: On the flip side, uncertainty surrounding the general economic environment in Australia and on a global basis, exchange rate fluctuations, stiff competition in the markets and the inherent regulatory risks in the businesses are potential threats to LiveHire’s financial and operational continuity.
 
Stock Recommendation: In the last three months, the company’s stock has increased by 39.29% on ASX, but has declined by 13.33% in the last one month. Currently, the stock is trading below the average of its 52-week trading range of $0.068 - $0.420.LVH has a robust pipeline of Direct Sourcing prospect clients, where its technology is distinctively placed as an innovation that provides high ROI to clients in this rapidly expanding market. During 1H20, current ratio of the company stood at 8.14x, higher than the industry median of 1.68x. This indicates that the company is liquid enough to pay off its current liabilities. In the same time span, Assets/Equity ratio of the company was 1.15x, lower than the industry median of 1.58x. On trailing twelve months (TTM) basis, the stock is trading at a price to book value multiple of 2.3x, lower than the industry average (Technology) of 3.8x. Considering the company’s growing pipeline of Direct Sourcing prospect clients, its recent contract wins, and decent March quarter performance, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.22, up by 12.821% on 16 June 2020.

 
LVH Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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