LiveHire surges more than 30% on award of North American contract

|

Published 28-APR-2020 13:23 P.M.

|

2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.


Click Here to View Latest Articles

It was less than a month ago that Finfeed drew your attention to LiveHire Ltd (ASX: LVH), a talent acquisition and engagement platform that delivers a proactive sourcing and talent mobility solution called Live Talent Communities.

On Tuesday, the company announced that it had won a lucrative contract in North America, prompting a significant share price rally.

The platform makes managing the flow of talent into and through businesses seamless, delivering value through detailed visibility of talent, shifting recruitment from reactive to proactive, significantly reducing time and cost to hire.

Such was the attractiveness of the group’s business offering that it won a contract with the Queensland state government to use its talent acquisition and engagement platform to assist in identifying and mobilising staff during the peak of the Covid-19 crisis.

LiveHire was chosen to serve the 48 Queensland government agencies by profiling staff and identifying those qualified to move into critical roles, more specifically redeploying over 15,000 public-sector employees.

With the contract equating to about six times the group’s average annual recurring revenue, it wasn’t surprising to see a significant share price increase with the company’s shares increasing from the previous day’s close of 8.3 cents to 11.5 cents.

However, as we pointed out at that stage, the company seemed substantially undervalued as it was debt-free with cash of $26.9 million, broadly in line with its market capitalisation at that time.

Contract equivalent to more than 15% of fiscal 2019 revenues

LiveHire has just won its latest direct sourcing contract in North America, a lucrative development and one which opens the door for additional business.

The contract value is estimated at $400,000 annual revenue with the opportunity to expand as the client extends the solution further.

To put this in perspective, LiveHire’s full-year revenues in fiscal 2019 were in the vicinity of $2.5 million, indicating this is a highly material win for the company.

The direct sourcing contract will initially add more than 500,000 candidate profiles to the LiveHire ecosystem in North America.

The direct sourcing market is a recent and rapid evolution in the contingent workforce management market (US$130 billion) that is typically managed through procurement and involves the build of talent clouds of contractor talent that can be directly sourced and hired.

This model helps in reducing the salary mark-up that organisations typically pay to staffing suppliers, providing significant savings in the total contractor program spend.

Consequently, the value-add offering provided by LiveHire is likely to continue to attract interest, providing strong revenue growth in 2020.

While the company’s shares surged to a high of 35 cents on Tuesday morning, they are still trading well shy of the 12 month high of 53 cents and the consensus price target of 57 cents, suggesting there is scope for further upside.



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.

 

Discover Small Cap
Biotech Stocks

Join thousands of other Investors following our stock commentary for Free

X