FLN reported A$1.484 million loss in FY2018 - the share price tumbled by 8.57%.

Freelancer Limited (ASX: FLN), a company from the industrial sector and into the business of operating an online freelancing, outsourcing and crowdsourcing marketplace, has announced its year ended results for the period ended 31 December 2018.

During the period, Freelancer Limited generated a net revenue of $51.9 million which was up by 3.2% as compared to the previous corresponding period. The company incurred a net loss of $1.484 million which increased by 69% on pcp. The gross payment volume (GPV) during the period was $740.6 million which increased by 26% on prior corresponding period and is an all-time record.Â

From Freelancing segment, in the 4Q FY2018, the GPV was $44.6 million which was up by 14% on pcp. However, for the entire FY2018, the GPV was $170.1 million which was up by 6.7% on PCP. There was strong growth in volume across mobile, hourly and recruiter projects in FY18. The Mobile GMV was up by 27%, Hourly GMV by 30% and Recruiter GMV by 55%. The paid, active project fees continued to reach an all-time high. In Freelancer Enterprise, the company continued to close the Master Services Agreements with customers followed by building the Freelancer Enterprise pipelines in the quarter. The Freelancer Enterprise pipeline is of high quality and has 50+ customers in various stages. The signed Master Services Agreements included a $200 billion RMB Chinese electrical appliance manufacturer which is one of the world’s largest professional services firms. The pipeline included professional services, electronics, aerospace, consumer products, pharmaceuticals, FMCG, e-commerce, technology and government sectors.

The Escrow GPV has been recorded as US$104 million in the 4Q FY2018, which was up by 28.2% on pcp. Besides, for the entire FY2018, the GPV was US$426m which increased by 30% on pcp. In FY2018, Escrow GPV reported all-time record ex-China GPV, beating previous by 20.2%.

By the end of FY2018, the gross margin was above 85%. The operating EBITDA reached near its break-even of $0.7 million. The operating NPAT reached near its break-even of $0.9 million.

The balance sheet of the company reported a decrease in the net asset base by 2%, with 3% increase in total assets and 7% increase in total liabilities. There was an increase in trade and other payables during the period by 9% on prior corresponding period. There was an increase in the accumulated losses by $1.484 million due to the losses in the current financial year. As a result, there was a decrease in the total shareholders’ equity by 2% to A$31.1 million. The net cash and cash equivalent by the end of the FY2018 on 31 December 2018 was approximately $33.2 million which was up by 4% on pcp.

As reported in FY2018, there was an improvement as well as growth in the Freelancer.com and is also returning to trend. In FY2019, the company is looking towards the building of collaborative tools, usability improvements, mobile, performance, managed service, API and enterprise offerings.

The Escrow segment saw one of the best years in terms of growth in the gross payment volume, and the company is highly optimistic about the opportunities from the Escrow.com API as well as the ecosystem, which the company is developing around the API. The company targets to increase its operating EBITDA to above breakeven in FY2018 which will be slightly under due to one-off compliance and regulatory costs of US licensing program.

Since the inception of FLM on ASX, the stock has generated a negative return of 56.25%. However, in the last six months, the stock has generated a positive return of 26.13%. The stock closed the trading session at A$0.640 on 18 February 2019, which is down by 8.571% as compared to the previous trading day’s closing price. The market capitalization of the stock is A$318.64 million and approximately 455.2 million outstanding shares.


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