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Young and dynamic information technology company, CV Check Limited (ASX:CV1), based in Australia, operates an online platform-as-a-service business providing people screening and verification services to a multitude of clients including corporates, small and medium enterprises (SMEs) and individual consumers across Australia and New Zealand. Since the launch of its platform in 2006, CVCheck has consistently incorporated new changes and upgrades in the platform for improved client satisfaction and optimisation of their experience. Moreover, this ensures that the services remain relevant in a rapidly evolving technology landscape.
CV1âs Complete list of Checks includes
More on the companyâs comprehensive verification checks may be READ here.
On 8 October 2019, CVCheck informed that new B2B customer wins resulted in record revenue for the quarter ended 30 September 2019 (Q1 FY20). This demonstrates consistent growth in the B2B segment and large improvements in Q1 FY20 performance as compared to the seasonal pattern of previous years.
Continued B2B Growth- CVCheck posted record revenue of $3.5 million for the period, which included $2.6 million from B2B customers, resulting in the B2B growth of 24% on the prior corresponding period (PCP). The quarter witnessed new first orders to CV1 from customers like Unity Water, Willoughby Council, a major telco, state and federal government departments and large not-for-profit sector organisations, in addition to the rollout of CVCheckâs white label platform for large enterprises.
Significant Improvement in Cash Flow- There were cash burns of approximately $ 0.2 million in operating and investing activities during Q1 FY20, reflecting a total improvement of $0.9 million on the PCP, including $ 0.4 million of improvement in operating and investing activities along with a partial tax incentive receipt of $0.5 million against FY19 R&D activities (the $0.1 million balance of the tax incentive receipt is expected to be received in the December 2019 quarter (Q2 FY20)).
The key drivers of this excellent quarterly result are revenue growth, margin improvement and continuing excellence in cost control. The cash flow from operating and investing activities along with the proceeds of $ 2.9 million received from completion of the $3.1 million placement in August 2019 took the total cash balance at the quarter end to $5.8 million.
The company added that a more detailed update would be provided in the release of its Q1 FY20 Appendix 4C and quarterly cash flow report with the expected disclosure date being on or about 31 October 2019.
As remarked previously by CEO, Mr Sherwood, CVCheck commenced the new financial year with a great momentum both at a corporate and operational level, well ripe for future growth, which is clearly evident from the companyâs recent business update. More on CVCheckâs highly experienced and motivated management team comprising some leading business minds may be READ here.
Three Pillar Strategy- The company had outlined a three-pillar strategy in its Annual Report for FY19, which was a highly transformation period for the business.
The key highlights from FY19 included maiden positive cash flow recorded in the second quarter (Q2 FY19) and continued cash generation in the subsequent two quarters (Q3 and Q4), demonstrating performance sustainability, strengthening of the companyâs B2B customer revenue base (70% of the total revenue of $ 12.4 million in FY19) and enhancement in the annualised recurring revenue (ARR) to $ 9.2 million in FY19.
The company began to cut back advertising targeted at individual consumer customers during FY19 and focussed on generating more organic traffic. Meanwhile, sales, marketing and account maintenance further improved the business customer engagement model. This helped in achieving higher average revenue per business customer account while also expanded gross margins by 3 points to 54%, leading to better customer satisfaction.
Thus, the significant drop in marketing expenditure on individual customers, in addition to continued strict expense control, aided the company in delivering a reduction of 57% in net loss for FY19 to ~$ 1.09 million. The outlook for the remaining FY20 looks immensely bright for CVCheckâs business.
Stock Performance
CV Check Limitedâs market capitalisation is around $ 39.45 million, and the stock has ~ 292.2 million shares outstanding. The CV1 stock was trading at $ 0.130 on 9 October 2019 (AEST 03:45 PM). In the last six months, the stock has delivered positive returns of 32.65%, while on a year-to-date basis, the stock gave an outstanding return of 160%. The one-year return for the CV1 stock stands at 62.50%.
Disclaimer
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