CVCheck’s Management commentary on the transformational financial year 2019

More on CVCheck’s comprehensive suite of checks may be READ here.

Chairman’s Address to the Shareholders: FY19

On 24 September 2019, CVCheck released its Annual Report for the financial year 2019 (FY19) that turned out to be a transformational one for the company. Pleased with the year gone by, CVCheck’s Non-Executive Chairman Mr Ivan Gustavino highlighted the main highlights from the year being the achievement of maiden cash flow positive performance in the second quarter (Q2 FY19) and continued cash generation across the remaining two quarters (Q3 and Q4), signalling

• Performance sustainability;
• A strengthening of the company’s business customer revenue base and
• Continued increase in its annualised recurring revenue.

Mr Gustavino also added that the company’s success to date has also been largely driven by certain macro drivers that have continued to play out through the world economy. These include –

• The shift to a service economy has been a prominent phenomenon in both Australia and other regions around the world;
• It has become increasingly imperative for companies to be aware of the capability sets of their own people and those seeking to join them; and
• The company Boards and other leaders concerned with risk management have been pushing for confidence in compliance frameworks, as much as the governments and regulators do.

Over the year FY19, CVCheck addressed these drivers and provided a valuable solution to the resultant pain points, which resulted in the business being able to secure customer wins with large enterprises, as well as key peak bodies such as the Public Fundraising Regulatory Association and SME (small and medium enterprises) customer growth across the board.

According to the Chairman, CVCheck’s strategy for the financial year 2019-20 (FY20) is to focus on maintaining and improving organic growth from higher repeat business customers and to tap into strategic opportunities for transformational growth strongly. In line with this agenda, the Chairman along with the CEO Mr Rod Sherwood undertook a roadshow in July 2019 to throw light on CVCheck’s strategic plan which has been developed based on three pillars:

Capital Raising- In November 2018, CVCheck successfully completed a $1.45 million placement (before costs) to institutional, sophisticated and professional investors and added new significant investors to its register. Two directors, being the Chairman Mr Ivan Gustavino and CEO Mr Rod Sherwood, also supported this capital raise and subscribed for $ 100,000 under the placement.

The proceeds from the placement were directed towards

• Accelerating business development,
• R&D (including refining CVCheck’s IT platform and UX experience) and
• Working capital.

Additionally in August 2019, post the end to FY19, the company completed another successful capital raising of $ 3.1 million (before costs) to institutional, sophisticated and professional investors while the funds raised were used as general working capital and to meet the strategic objectives set by the company.

(Image Source: Company’s Website)

Board and Leadership Team – Commenting on the leadership the Chairman stated that CVCheck has consistently refined its Board composition through the year with the existing Board members possessing diverse and complementary skills, and have significantly contributed to the sustainability, long term growth and governance of the company along with the Non-Executive Directors that have also devoted an enormous amount of time to ensure effective operations and governance.

More on the company’s Management Summary may be READ here.

Chief Executive Officer’s Report: FY19

In the Annual Report 2018-19, CVCheck’s CEO Mr Rod Sherwood emphasised on the company’s main achievements for the year being –

• Final three quarters being cashflow positive.
• Group revenue of $ 12.4 million, business customer revenue 70% across the year.
• Improved revenue quality, growth in annual recurring revenue (ARR) to $ 9.2 million.
• Business customer revenue growth of 21% across FY19, gross margin expansion by 300 bps to 54%.
• An increase to business development resources with the objective to accelerate business customer revenue growth from FY2020 onward.
• Continued investment into the technology improved customer experience and scaled up potential.

The CEO in his report stated that CVCheck aggressively cut advertising targeting individual consumer customers and shifted towards generating more organic traffic while the sales, marketing and account maintenance further improved the business customer engagement model with improvement according to client type. Which resulted in higher average revenue per business customer account with widened gross margins and improved customer satisfaction.

More on the full year results for FY19 can be READ here.

Regional performance

Australia- In Australia, CVCheck’s sales and promotion strategy built on focusing on attracting higher quality repeat order flow from business customers led to strong growth in ARR.

Besides, the individual consumer customer segment also remained a crucial part of the business, with 24% of the segment’s revenue in FY19 recorded from returning individual customers.

During the second half of the year, CVCheck increased resources for its Melbourne-based sales hub with the team tripled by end of June 2019.

New Zealand- An excellent financial performance was recorded across the New Zealand business with sustained strong growth in corporate revenues, including many key government contracts.

The Auckland based team is core to CVCheck’s operations and customer service offering and to accommodate its expanding business, the unit was relocated to larger premises in December 2018 with additional sales personnel added in June 2019.

The CEO also explained that new Integrations with online HR technology platforms also continue to bring in more business customer opportunities in Australia as well as in New Zealand.

New Platform Features - The CEO also explained that new Integrations with online HR technology platforms also continue to bring in more business customer opportunities in Australia as well as in New Zealand.

CVCheck’s platform is now connected with SAP SuccessFactors, PageUp, SnapHire (including its talent app store), JobAdder WorkDay, Springboard, PeopleScout and SmartRecruiters.

During the year, the addition of new features, possible through continued IT efforts, along with new products enhanced customer value, experience, accuracy and efficiency. Moreover, a successful trial of the automated reference check was also conducted, which showcased a strong demand for it amongst the company’s client base and provided the development team with valuable insights.

For CVCheck, channel partnerships, customer retention and technology enhancements continue to be the key focus areas to further scale and support the business.

Outlook for FY2020- According to the CEO, CVCheck has entered the new financial year 2019-2020 with a great momentum both at a corporate and operational level with a proven concept, clear business model, and continued sustainable growth. While the company executes its three-pillar strategy outlined in the Chair’s letter, the robust tender pipeline, increasing average revenue per account and integrated account management offering are expected to drive continued ARR growth throughout FY2020.

Stock performance

CVCheck has a market cap of around $ 37.97 million with ~ 292.1 million shares outstanding. On 26 September 2019, the CV1 stock was trading at $ 0.135, up 3.8% (AEST: 1:45 PM). In addition, the CV1 stock has delivered positive returns of 160% YTD and 51.16% in the last six months.

Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is sponsored but NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. We are neither licensed nor qualified to provide investment advice through this platform.