CV Check Ltd (ASX: CV1) has been operating for over 10 years and providing screening and verification services including employment and tenant screening, employer and property solutions, police checks, and other related services to companies worldwide. It is an expanding business with growing revenue streams while in the process, the company has developed a world-class online platform that makes the delivery of a comprehensive range of checks seamless across the globe.
CV1’s Complete List of Checks includes:
According to the company, there may be some risks that the employees pose to the business such as not living up to their role, not fitting into the branding and culture of the company, the level of experience in dealing with blue chip clients and the inability of the employees to meet the brand standard as set by the company. The verification services provided by CV Check are of utmost significance in this regard, helping the businesses to direct their focus on other activities like driving the growth of the company, enhancing the financial strength and building career growth opportunities for the employees. With its locally based team and global coverage of operations, the company is fairing well in providing the background checks in demand.
On 16 August 2019, the company informed to have received firm commitments for a placement of shares to eligible institutional, sophisticated and professional investors for raising $ 3 million before costs. Around 18.8 million shares would be issued at $ 0.16 each under the company’s available placement capacity under ASX Listing Rule 7.1 and therefore would not require shareholder approval.
The issue price represents a 14.1% discount to the five-day trading volume weighted average price and an 11.1% discount to its last traded share price (as on announcement date). The placement was led by Shaw and Partners Limited and Foster Stockbroking Pty Ltd. The proceeds from the placement would be used for working capital purposes and accelerated achievement of strategic objectives outlined in recent market updates. The placement is expected to be settled on Thursday, 22 August 2019 with new shares to be allotted on Friday, 23 August 2019. The new shares issued under the placement would rank pari passu with the existing ordinary shares.
June 2019 Quarter Update – On 31 July 2019, CV Check disclosed its Quarterly Cash Flow report for the three months ended 30 June 2019 (Q4 FY19), posting a positive cashflow of $ 27k including a $ 701k (104%) positive improvement in the operating and investing cashflow, marking the third consecutive quarter of positive cash flow. The revenue for the quarter amounted to $ 3.1 million, of which 71% comprised from the B2B segment generating $ 3.2 million cash receipts, minus 4% on the prior corresponding period (PCP) due to lower B2C volume. The Annualised Recurring Revenue (ARR) stood at $ 9.2 million and was primarily driven by new large enterprise wins and rising average revenue per account.
CV Check has progressively improved its cash performance through every quarter since 2017 on a PCP basis by directing its marketing initiatives to have new B2B customers on board and improving margins with its B2C customers through a more seamless self-serve customer experience.
EBITDA was negative at $ 0.2 million for Q4FY19, indicating an improvement of 54% on PCP, and net loss reduced to $ 0.3 million, reflecting an improvement of 41% on PCP.
Cash at the end of year, as at 30 June 2019 stood at $ 3.1 million and the latest capital raising initiative would provide the necessary financial flexibility to deliver continued organic growth in domestic and international markets. The company also strengthened its Sales Team during the month of June 2019 to accelerate large enterprise and corporate sales.
During the quarter, the company launched a new white-label solution to its B2B customers and secured Visy Industries as its foundation customer. This new feature is only available for large enterprises, underlining the company’s key focus on generating and maintaining high quality revenue streams.
The new B2B opportunities within both the Australian and New Zealand markets continue to be driven by integrations across online HR and employment management platforms. The most recent includes the company’s integration with a leading cloud-based recruiting platform, SmartRecruiters.
As of the release of the quarterly update, CV1’s platform is now connected with SnapHire (including its talent app store), PageUp, SAP SuccessFactors, JobAdder, WorkDay, Springboard, PeopleScout and SmartRecruiters. Going forth, the company aims to consistently assess and pursue additional market opportunities.
With an excellent momentum building so far, CV Check has commenced the next financial year 2020 (FY20) with a robust pipeline of B2B customers and is therefore, well-positioned to capitalise on the hard work and strong foundations laid out by the team. The company is also planning on launching certain exciting initiatives in the current quarter within an industry that is highly fragmented and there is considerable scope for tapping the much bigger share of the market in Australia and New Zealand.
Stock Performance: CV Check has a market capitalisation of around AUD 45.04 million with approximately 272.98 million shares outstanding. On 20 August 2019, the CV1 stock price settled the day’s trading at AUD 0.170, climbing up 3.03% by AUD 0.005 with approximately 127,499 shares traded. In addition, the CV1 stock has generated positive returns of 240% year-to-date, 107.32% in the last six months and 41.67% in the last three months.
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