Ann: Xref Limited 2018 Audited Annual Report, page-2

This evening I have found time to go through the annual report, which is an excellent document.

Some quotes and take-aways as per below:

"The rapid rate of Xref’s organic growth can truly be seen in the fact that sales revenue for just the last week of FY18 was almost equal to the sales revenue generated during the entire year of FY15, before the company’s listing on the ASX."

"Growing Average Revenue Per Account (ARPA)
Together with increased client acquisition and adoption, a sales focus on enterprise organisations and highvalue sectors has contributed to an increase in Average Revenue Per Account (ARPA). This is another key benchmark by which we measure our progress. Our ability to increase penetration within existing clients’ businesses, accessing a greater proportion of available hires, can be seen by comparing the ARPA for new and established clients. New clients acquired during FY18 contributed an ARPA of $8.4k, while for clients in their second, third and fourth year their ARPA has grown to $9.5k, $12.5k and $17.9k respectively. Overall ARPA has grown to $10k. This demonstrates clients’ increased use of our platform over time and validates its value to their businesses. "

"Cost management
While investing to support global growth, we have maintained a tight control over costs and cash outflows have been in line with anticipated budgets throughout the year. A new sales platform has significantly improved the speed of client acquisition, reducing the length of the sales cycle to secure new clients by 55% from 80 days to 39 days. Having expanded internationally to drive sales, our costs have now steadied as we experience significant revenue growth"

"Positive outlook for growth
We enter the new financial year in a very positive position. Our markets are growing, and we have a strong pipeline of new business opportunities across Australia and New Zealand, United Kingdom & the Nordics and in North America, supported by experienced, skilled teams. Our business is benefiting from faster client adoption, accelerating new client and integration sales, and ongoing renewals. Importantly, we retain our first-mover advantage and have a unique, leading technology platform which consistently provides a high return on investment for clients backed by unrivalled customer support. The new financial year has started well with sales in line with management expectations. We wish to thank our clients, team and shareholders for their ongoing support as we continue to build a sustainable global business."

I think net positive cashflow towards end 2019, but by far the bigger carrot is their client list and the YoY growth percentages, which I believe will only accelerate given channel partnerships. I would hazard a guess that the cost base has more or less stabilised, so the increase in client sign ups will now drive the bottom line profitability.

Excellent outlook, in my opinion. Should be trading at 90c - 120c in my opinion.