CV Check Ltd (ASX:CV1) achieved its goal of sustainable growth during the first half of FY21, booking $7 million of revenue – a 5% improvement on the $6.6 million from the prior comparative period (PCP).
A surge in revenues occurred from September 2020 as the economic recovery gathered pace and resulted in all-time company records being achieved for a quarter, for a half-year and for a 12-month booked Annual Recurring Revenue (ARR) for periods ending on 31 December 2020.
Notably, the ARR for the 12 months to 31 December 2020 increased 4% to $10.2 million (PCP $9.8 million).
This was largely driven by new sales wins and a recovery in orders among the company’s pre-existing business customers who were making new hires and catching up on rescreening their workforces to maintain compliance standards.
B2B direct sales
Total B2B revenue for the half-year ended 31 December 2020 came to $5.3 million (PCP $5 million), an increase of 6%, with some clients shifting to the integrations sales channel.
This channel is enjoying strong momentum with a focus on increasing addressable market through growing the number of available platforms through which customers can place orders.
Revenues booked through this channel grew by 115% to reach $0.7 million (PCP $0.3 million).
Integrations completed
CVCheck currently has integrations available with JobAdder, LinkedIn, LiveHire, PageUp, PeopleScout, Realme, SmartRecruiters, Snaphire, SpringBoard, SuccessFactors, Workday and Xref; some customers also build integrations to their bespoke systems.
During the half-year CVCheck completed:
- An integration with Livehire Ltd (ASX:LVH) (FRA:24X) an AI enabled cloud-based platform allowing enterprises the ability to manage employee movements on demand;
- A successful new integration with RealMe®’s verified service offering Digital ID verification, a revolutionary technology, in use by the New Zealand government to allow individuals to interact with public institutions; and
- A new integration with TechnologyOne Ltd (ASX:TNE) (FRA:RW8) Australia’s largest enterprise software company.
B2B wholesale and B2C direct sales
During the second quarter, the company also executed contracts with 2 new international wholesale screening customers in a second phase of its strategic white label rollout, Netforce Global LLC (US) and Vero Screening Ltd (UK).
Additionally, direct sales to individuals continued to be an important source of revenue and B2B leads with sales of $1.7 million and a growth of 2% achieved for the half-year (PCP $1.6 million).
Bright People Technologies acquisition
On 10 February 2021, CVCheck announced its plans to acquire Bright People Technologies, a cloud-based workforce credentials and compliance software company, operating under a Software as a Service (SaaS) business model.
The acquisition enterprise value is calculated at $15.3 million, being assumed debt and $12.0 million in scrip issued at completion to be held in voluntary escrow until 31 December 2022 (a fixed number of ordinary shares at an assumed price of 16.5 cents per share).
The acquisition is subject to shareholder approval.
$10.5 million placement
Associated with the proposed acquisition, on 18 February 2021 the company completed a share placement of 63,636,364 ordinary shares at 16.5 cents per share to institutional, sophisticated, and professional investors raising $10,500,000 before costs.
Of the share placement, 606,061 shares (equivalent to $100,000 at the issue price) were applied for by a director and their issuance is subject to shareholder approval.
The company also issued 4,500,000 unlisted options exercisable at 37.1 cents per option expiring 3 years from the date of issue as part of the placement to the joint lead managers.