Hiremii Ltd (ASX:HMI) has outlined strong revenue growth in a half year report to December 31, 2021, that details financial and business highlights.
Enhancing the encouraging progress by the tech-driven labour hire and recruitment company during the half was completion of the acquisition of Perth-based Inverse Group Ltd.
Financial update
Revenue from customer contracts in the first half of the 2022 financial year of $3,828,000 increased by 9.1% compared to $3,505,000 of the corresponding period of FY21.
Hiremii quarterly revenue. Source: HireMii
The main driver for growth in the first half continued to be increases in active recruited contractors for the company’s clients.
Following the acquisition of Inverse, Hiremii now has a diverse client base with more than 100 clients, 40 of whom are active. This leaves the inactive clients who provide the company with an opportunity to expand its contractors once COVID-related barriers start to ease in 2022.
A portion of the UGL meter reader contract was not extended past December 2021 as announced in November last year.
This portion of the contract entailed quarterly revenue of $1.3 million and a gross margin of $30,700. Overheads were reduced by $59,000 per quarter in response.
Inverse Group contributed one month of revenue to the company following the acquisition, totaling $1,161,000 with a gross margin of $129,000.
A restructuring provision of $142,000 was also recognised for the acquisition of Inverse Group and Oncontractor businesses.
"Enhanced its scale"
Recently appointed managing director and previous CEO of Inverse, Andrew Hornby, said, "Despite tough ongoing COVID-related restrictions on labour movement, Hiremii delivered growth in the first six months and has significantly enhanced its scale through the acquisition of Inverse late in the second quarter of FY22.
"We are continuing to focus on delivering a best-in-class recruitment and payroll solution to clients in the energy, resources and digital sectors.
"Our margin improvement strategy is under way with the transfer of contractor management to our in-house system enabling better control, communication and overall performance. This will help underpin future growth as the unit works closer with sales and account managers to ensure accuracy and efficient problem resolution.
"With our integration complete this should enable us to focus outwardly on client engagement and sales activity with existing and target clients.
"In parallel, we are working with our partners to progress the initial module in our technology platform to completion and in a deployable position."
Business activities update
Hiremii continues to focus on its strategic intiatives set out in its IPO Prospectus in 2021 with near-term and long-term goals planned.
The near-term focus is to quickly complete the integration of the two Hiremii and Inverse recruitment businesses and brands.
Merging of the two-employee recruitment and support teams is now complete, with all WA staff now in one central office in Perth’s CBD. The account management team will focus on providing ongoing recruitment services to existing clients.
An historic outsourced payroll supplier arrangement is being wound down to improve overall gross margin by 2%, however, this will negatively impact working capital by approximately $300,000-400,000 in H2 FY22.
The company is expected to save $100,000 per month in run-rate costs once the integration process finishes. These savings will help reduce Hiremii’s current operating cost cash burn rate by around one-third in future periods.
Shortlistmii plans
A second near-term goal is focused on Shortlistmii - an express candidate shortlisting, matching and screening service running on Hiremii’s powerful AI technology platform.
The service uses AI to screen a candidate’s CV against client job scope skill, experience and personality requirements, providing a shortlist in the fraction of the time it would normally take to screen and review large volumes of applications.
Once beta testing is completed, Shortlistmii will be launch in quarter four of the 2022 financial year.
Hornby added, “We are excited to be ready to launch Shortlistmii to our client base in the coming months as our next growth strategy for 2022 and beyond.
“This is the first service offer from the world-class Hiremii AI-driven recruitment management platform, which will provide our clients with significantly increased efficiency and effectiveness in their own recruitment processes.”
Long term focus and beyond
Looking ahead, the company will continue to drive business development and marketing initiatives to acquire new clients and branch out into new sectors, such as healthcare.
In addition, Hiremii will consider expanding to New South Wales and Victoria in the second half of the year depending on what COVID conditions allow.
- By Duncan Bailey