Nice summary and I concur with all the reasons cited in support of a ‘Buy’. Extended my holding in Xref after the COVID crash and have subsequently added to that holding. This is far from being a ‘new start’ and has built an impressive track record with some very significant Customer organisations. The move to integrations via relevant strategic partners is equally impressive. COVID-19 has clearly impacted their Revenue streams over the past 5 months, but this headwind will soon become a tailwind as hiring increases.
Relentless cash burn is a sentiment killer in any business, but as you correctly point out, that is all about to change. Discounting the change to the pay cycle ( 13 to 12 periods ), Xref exited FY2020 with a run-rate on cash flow which is essentially break even. In summary, the growth story is in tact now balanced with a road map to profitability. I too give credit to Xref for going the debt route opposed to a Capital Raise. Signals Management’s confidence in what lies ahead.
FY2021 should reward shareholders for their patience (and some).
Rokewa
XF1 Price at posting:
15.5¢ Sentiment: Buy Disclosure: Held
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