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XREF LIMITED — Interim / Quarterly Report 2021
Apr 5, 2021
66097_rns_2021-04-05_a2b02fe8-0070-4e29-b51f-60466fdbc14e.pdf
Interim / Quarterly Report
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6th�April�2021
X�ef�Re�e��e��������While�C�����Re�ai��Fla�
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Re�e��e ���3�million���up�36�
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Sale� ���4�million����up�62�
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Ca�h�Recei����f����Sale� ���3�5�million���up�46�
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Ca�h�E��e��e� ���3�5�million���down�17�
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Ca�h�Bala�ce ���6�24�million
Xref Limited �ASX�XF�� �the human resources technology company�today reported a record third quarter of trading�The Group delivered records in revenue at �3 million�sales at �4 million and cash receipts�from�sales�at��3�5�million�for�the�quarter�
New clients acquired in the quarter contributed 13�of total sales�Xref further built on its success in healthcare globally and entered a new geographic market�South Africa� New clients in Australia included the Australian Prudential Regulation Authority ( APRA��Cash Converters and the Children�s Cancer Institute�In the United States and Canada�new clients included Granite Solutions Groupe�Baylis Medical and CrossMed Healthcare�In EMEA�Connect Health�Gray Healthcare and�South Africa�based� Mr Price Group were introduced to the platform�Details about these companies can be found in the appendix�
Rec��d�Re�e��e��C�edi��U�age�
Xref credits used during the quarter totalled �2�7 million and�together with RapidID�s net revenue of �0�3 million�contributed to a record quarterly revenue of �3 million�Xref credit usage grew 23�and RapidID�s�net�revenue�grew�2�1��on�the�previous�corresponding quarter��Q3�FY20��
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���Xref�credits�are�recognised�as�revenue�when�used ���RapidID�Net�Revenue�is�gross�revenue�less�the�cost of�3rd�party�checks
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Xref monitors hiring recovery rates and hiring trends to predict the resilience of the industry and forecast activity�Australian clients usually take six weeks to return to peak credit usage levels following the Christmas and New Year break�due to the impact of the Australia Day holiday at the end of January� However�by week five of 2021�credit usage had already achieved �6�recovery and has continued to grow throughout the remainder of the Quarter�In the Northern Hemisphere�Christmas and New Year holidays are shorter and�over time�the Group expects its geographic expansion will result in less seasonality�in�overall�usage�
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Xref credits used via integration partners represented 2��of all credits used during the quarter and grew�by�61���to��0�8�million��when�compared�to�Q3 FY20�and�14��when�compared�to�Q2�FY21�
S����g�Sale��G����h
COVID�1�has accelerated the global demand for remote working and�as a result�employers�desire to improve governance is increasing�Accordingly�organisations are seeking better ways to perform candidate verification�Xref can now acquire clients via its self�serve platform�its in�house enterprise sales teams or via its 30 channel partners�As a result�Xref�s reliance on outbound�direct sales activities is fast being replaced by inbound�marketing�led demand�During the quarter�Xref witnessed a rise in inbound leads from�in the most part�channel partner integrations�an improved global digital strategy and�the�network�effect�generated�through�the�numerous sectors�and�global�regions�Xref�is�used�in� Group sales reached �4 million during the quarter�up 62�on the previous corresponding quarter �Q3 FY20�and 46�when compared to Q2 FY21�New clients accounted for 13�of sales�while 12�came
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from Xref�s international offices in Europe and North America and 24�from RapidID�Sales �gross revenue��by�RapidID�grew�by�608��when�compared�to the�previous�corresponding�quarter��Q3�FY20��
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Clients who joined Xref prior to FY17 accounted for 30�of sales during Q3 FY21 despite significant sales growth since then�demonstrating Xref�s ability to retain and grow clients over time�Clients that joined within FY21 represented 1��of total sales�demonstrating Xref�s ability to also acquire new�high�value clients�
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C����C�����l
Since December 201��Xref has scaled back event costs�travel�development costs�and office leases and has reduced headcount from �8 to 64 people�This has driven a material reduction in cash expenses while continuing to support growth in sales�Operating cash outflows for the March quarter were down 17��to �3�5 million�from �4�2 million in Q3 FY20�Cash receipts from sales were up by 44� on the previous corresponding quarter�Xref was able to achieve an operating cash flow surplus of �3�000�
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��Government�COVID�1��subsidy�payments�finished�in early�October�2020��Total�subsidies�were��Q4FY20 ��376k��Q1FY21���461k��Q2FY21���184k�
Xref forecasts operating cash expenses for Q4 FY21 to be consistent with Q3 FY21 at �3�5 million�Cash on�hand�at�the�end�of�March was��6�24�million�
P��d�c��I��e���e��
Although the European and North American markets continue to be adversely impacted by the effects of COVID�1��Xref is preparing for the growth that is anticipated to come from millions of returning workers globally�Xref is working with some of its largest global clients to expand the current platform and support their future requirements�The enhanced platform will dramatically increase the global addressable market through the provision of additional services�allow for an entirely digital new client acquisition process and add a subscription�based ARR to the current credit�based model�During the quarter�Xref capitalised a proportion of internal and external development costs related to these platform�features�
Highe���Ra�i�g�Refe�e�ce�Checki�g�Pla�f������Gl�ball�
During the quarter�Xref was again named a leader by independent software review site� G2� appearing as its highest�rated and easiest to use reference checking solution� With a 4�7 star rating on G2� Capterra and Google�Xref is ideally placed to be found and�trusted�by�new�clients�globally�
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B��i�e���U�da�e���I��e�����Call�����h�A��il
Chief Executive Officer�Lee�Martin Seymour�will host an investor call to discuss Xref�s Q3 FY21 results on Tuesday�6th April 2021 at 11�00am AEST�The number for Australian investors is 1800 0�3 431 and for international�investors�is��61�2�8047��3�3��The�conference ID�is���3870�7��
Ma�age�e���C���e����
E�ec��i�e di�ec����CEO Lee�Ma��i�Se������aid� �Our annualised revenue run rate�generated by credits and checks used by existing clients�is now over �15 million and as we enter the busiest quarter of the year�we are excited about being very well positioned to achieve our first cash flow break�even quarter by the end of this financial year�In addition to sales growth and cost control�we are now also heavily focused on delivering our newly built and extended verification platform in Q1 FY22�which will help�us�scale�our�business�even�further �
B�ad R���e��Chai��a��aid ��The evolution of Xref from a sales�led to a marketing�led business is paying off�In Q3 our marketing efforts generated �2�4 million in new opportunities�with 73�of new customers coming via our website�free template builder tool or online content�Paid advertising accounted for 4�and 23�came from clients who had used Xref Lite and requested an enterprise account�As we prepare to launch into a much larger addressable market�we can further leverage the channels�that�have�proven�to�perform�best�for�us �
A��e�di���C�i�e����e��la�a��������e
As required by listing rule 4�7C�3�the amount of �318�000 shown at item 6 within this quarter�s 4C is payment of directors fees and salaries to executive directors�plus statutory entitlements�This includes payout�of�entitlements�to�T�Griffiths�during�the�quarter�
I��e�����a�d��edia�e���i�ie��
Presentation� xf1�com Investor�Centre� xref�com�en�investor�centre Twitter� �xf1 Email� investors�xf1�com
Authorised�by�the�Board��Xref�Limited��ASX���XF1� Xref�Limited��Suite�13��13�Hickson�Road��Dawes�Point�Sydney�NSW�2000�Australia
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| Ke���i���ab���X�ef | Ke���i���ab���X�ef |
|---|---|
| Fi������e�ad�a��age | Xref provided the frst automated solution for the candidate referencing process and it is capitalising on its frst�mover advantagebyfocusingonandinvestingforinternational growth� |
| B��i�e����del | Under Xref�s business model�when clients purchase credits �credit sales�to use the candidate referencing platform�the value of their purchases is recognised as unearned income�When they pay for the credits�the cash is recognised as cash receipts�Once the credits are used by the client �usage��Xref recognises the value of thecreditsusedasrevenue�recognisedrevenue�� |
| Gl�baladd�e��able�a�ke� | Xref�s addressable market includes more than 180 million employees in North America�120 million employees in Europe and 15millionemployeesinAustraliaandNewZealand� |
A��e�di����Ne��Clie���
A����alia�a�d�Ne��Zeala�d
APRA �The Australian Prudential Regulation Authority �APRA�is an independent statutory authority that supervises institutions across banking�insurance and superannuation and promotes financial system stability�in�Australia��APRA�employs�more�than�730 staff�across�Australia�
Cash Converters �Cash Converters International is a franchised retail network listed on the ASX �CCV��It generates revenues from franchising�store operations�personal finance and vehicle finance�From its head�office in Perth�Western Australia the Company controls 700 stores across 16 countries�helping customers�meet�their�financial�needs�
Children�s Cancer Institute �Children�s Cancer Institute is the only independent medical research institute in Australia wholly dedicated to curing childhood cancer�It now employs more than 300 researchers�students and operational staff and is recognised as one of the leading international child cancer�research�institutes�
The�U�i�ed�S�a�e��a�d�Ca�ada
Granite Solutions Groupe �Granite Solutions Groupe provides financial services decision makers with effective people and solutions�It has four offices on three continents�with more than 250 team members�deployed�across�the�U�S��at�Fortune�500�companies and�high�performing�Fintech�firms�
Baylis Medical �Baylis Medical is a world leader in the conception�development�production and distribution�of�state�of�the�art�medical�products that�improve�the�lives�of�people�around�the�world�
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CrossMed Healthcare Staffing Solutions �CrossMed Healthcare provides staffing solutions to nursing and�allied�health�care�professionals�
EMEA
Connect Health �Connect Health is a leading community services healthcare provider encompassing mental health�IAPT�psychological interventions�rehabilitation�MSK �musculoskeletal�conditions� chronic pain�orthopaedics�rheumatology and occupational health services�serving over 375k NHS patients�pa�across�50�NHS�CCGs�Trusts�and�100��occupational health�physiotherapy�services�
Gray Healthcare �Gray Healthcare is the UK�s leading specialist provider of individually tailored community�based support�Its front�line workers include highly skilled support workers and team leaders who use their extensive knowledge and skills to plan and deliver support based on people�s needs�and�desired�outcomes�
Mr Price Group �Mr Price Group Limited is a publicly traded retail company based in South Africa�It trades predominantly in South Africa as well as through owned and franchise stores across 13 African markets��It�targets�a�wide�range�of�customers�and is�well�known�for�fashion�value�offering�
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A������� 4C
Q�������� ���� ���� ������ ��� �������� ������� �� L������ R��� 4.7B
N��� �� ������
| N��� �� ������ | N��� �� ������ | N��� �� ������ | N��� �� ������ | N��� �� ������ |
|---|---|---|---|---|
| Xref Limited | ||||
| ABN 34 122 404 666 |
Q������ ����� (�������� ��������) | |||
| 31 March 2021 | ||||
| C����������� ��������� �� ���� ����� | C������ ������� $A�000 |
Y��� �� ���� (9 ������) $A�000 |
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| 1. C��� ����� ���� ��������� ���������� 1.1 Receipts from c�stomers 1.2 Pa�ments for (a) research and de�elopment (b) prod�ct man�fact�ring and operating costs (c) ad�ertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs 1.3 Di�idends recei�ed (see note 3) 1.4 Interest recei�ed 1.5 Interest and other costs of finance paid 1.6 Income ta�es paid 1.7 Go�ernment grants and ta� incenti�es 1.8 Other (pro�ide details if material) - Upfront ann�al s�bscriptions paid - GST for the period - Net foreign e�change 1.9 N�� ���� ���� / (���� ��) ��������� ���������� |
3,468 (5) (546) (159) (78) (2,161) (158) - 2 - - - (131) (239) 10 |
8,858 (29) (1,310) (376) (368) (6,464) (627) - 9 - - 645 (389) (564) 24 |
||
| 3 | (591) |
Xref Limited - March Q�arter 2021 Appendi� 4C
Page 1
A������� 4C Q�������� ���� ���� ������ ��� �������� ������� ��L������ R��� 4.7B
| 2. C��� ����� ���� ��������� ���������� 2.1 Pa�ments to acq�ire: (a) entities (b) b�sinesses (c) propert�, plant and eq�ipment (d) in�estments (e) intellect�al propert� (f) other non-c�rrent assets - Website 2.2 Proceeds from disposal of: (a) entities (b) b�sinesses (c) propert�, plant and eq�ipment (d) in�estments (e) intellect�al propert� (f) other non-c�rrent assets 2.3 Cash flo�s from loans to other entities 2.4 Di�idends recei�ed (see note 3) 2.5 Other (pro�ide details if material) 2.6 N�� ���� ���� / (���� ��) ��������� ���������� |
- - (10) - - (364) - - - - - - - - 1 |
- - (31) - - (594) - - - - - - - - 3 |
|
|---|---|---|---|
| (373) | (622) |
| 3. C��� ����� ���� ��������� ���������� 3.1 Proceeds from iss�es of eq�it� sec�rities (e�cl�ding con�ertible debt sec�rities) 3.2 Proceeds from iss�e of con�ertible debt sec�rities 3.3 Proceeds from e�ercise of options 3.4 Transaction costs related to iss�es of eq�it� sec�rities or con�ertible debt sec�rities 3.5 Proceeds from borro�ings 3.6 Repa�ment of borro�ings 3.7 Transaction costs related to loans and borro�ings 3.8 Di�idends paid 3.9 Other (pro�ide details if material) 3.10 N�� ���� ���� / (���� ��) ��������� ���������� |
- - - - - - - - (125) |
- - - - 5,000 - (235) - (250) |
|
|---|---|---|---|
| (125) | 4,515 |
Xref Limited - March Q�arter 2021 Appendi� 4C
Page 2
A������� 4C Q�������� ���� ���� ������ ��� �������� ������� ��L������ R��� 4.7B
| 4. N����������/ (��������) ��������� ���� ����������� ��� ��� ������ 4.1 Cash and cash eq�i�alents at beginning of period 4.2 Net cash from / (�sed in) operating acti�ities (item 1.9 abo�e) 4.3 Net cash from / (�sed in) in�esting acti�ities (item 2.6 abo�e) 4.4 Net cash from / (�sed in) financing acti�ities (item 3.10 abo�e) 4.5 Effect of mo�ement in e�change rates on cash held 4.6 C��� ��� ���� ����������� �� ��� �� ������ |
4. N����������/ (��������) ��������� ���� ����������� ��� ��� ������ 4.1 Cash and cash eq�i�alents at beginning of period 4.2 Net cash from / (�sed in) operating acti�ities (item 1.9 abo�e) 4.3 Net cash from / (�sed in) in�esting acti�ities (item 2.6 abo�e) 4.4 Net cash from / (�sed in) financing acti�ities (item 3.10 abo�e) 4.5 Effect of mo�ement in e�change rates on cash held 4.6 C��� ��� ���� ����������� �� ��� �� ������ |
6,734 3 (373) (125) - |
2,937 (591) (622) 4,515 - |
|
|---|---|---|---|---|
| 6,239 | 6,239 | |||
| 5. R������������� �� ���� ��� ���� ����������� at the end of the q�arter (as sho�n in the consolidated statement of cash flo�s) to the related items in the acco�nts |
C������ ������� $A�000 |
P������� ������� $A�000 |
||
| 5.1 Bank balances 5.2 Call deposits 5.3 Bank o�erdrafts 5.4 Other (pro�ide details) 5.5 C��� ��� ���� ����������� �� ��� �� ������� (������ ����� ���� 4.6 �����) |
6,205 34 - - |
6,699 35 - - |
||
| 6,239 | 6,734 | |||
| 6. P������� �� ������� ������� �� ��� ������ ��� ����� ���������� |
C������ ������� $A'000 |
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| 6.1 Aggregate amo�nt of pa�ments to related parties and their associates incl�ded in item 1 6.2 Aggregate amo�nt of pa�ments to related parties and their associates incl�ded in item 2 |
303 | |||
| 15 | ||||
| 7. F������������������ N��e: �he �e�m �facili��� i�cl�de� all f��m� �f fi�a�ci�g a��a�geme��� a�ailable �� �he e��i��. Add ���e� a� �ece��a�� f�� a� ��de���a�di�g �f �he ����ce� �f fi�a�ce a�ailable �� �he e��i��. |
T���� �������� ������ �� ������� ��� $A�000 |
A����� ����� �� ������� ��� $A�000 |
||
| 7.1 Loan facilities 5,000 7.2 Credit standb� arrangements - 7.3 Other (please specif�) - 7.4 T���� ��������� ���������� 5,000 7.5 U����� ��������� ���������� ��������� �� ������� ��� |
5,000 - - 5,000 |
5,000 - - 5,000 |
||
| - |
Xref Limited - March Q�arter 2021 Appendi� 4C
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A������� 4C Q�������� ���� ���� ������ ��� �������� ������� ��L������ R��� 4.7B
- 7.6 Incl�de in the bo� belo� a description of each facilit�abo�e, incl�ding the lender, interest rate, mat�rit� date and �hether it is sec�red or �nsec�red. If an� additional financing facilities ha�e been entered into or are proposed to be entered into after q�arter end, incl�de a note pro�iding details of those facilities as �ell.
$5m f�ll� dra�n facilit� �ith PURE Asset Management. 4-�ear term. 9.95% interest rate, interest to be paid e�er� 3 months. No principal amortisation, repa�able at mat�rit�. Sec�red against assets of Xref Limited & s�bsidiaries. ASX release 31 J�l� 2020
| 8. E�������� ���� ��������� ��� ������ ��������� ���������� |
$A�000 | |
|---|---|---|
| 8.1 Net cash from / (�sed in) operating acti�ities (Item 1.9) 3 8.2 Cash and cash eq�i�alents at q�arter end (Item 4.6) 6,239 8.3 Un�sed finance facilities a�ailable at q�arter end (Item 7.5) - 8.4 Total a�ailable f�nding (Item 8.2 + Item 8.3) 6,239 8.5 E�������� �������� �� ������� ��������� (I��� 8.4 ������� �� I��� 8.1) 2,080 N��e: if �he e��i��ha��e����ed ���i�i�e �e���e�a�i�g ca�h fl���i�i�em 1.9, a���e�i�em 8.5 a��N/A�. O�he��i�e, a fig��e f�� �he e��ima�ed ��a��e�� �f f��di�g a�ailable m��� be i�cl�ded i� i�em 8.5. |
3 6,239 - 6,239 |
|
| 2,080 |
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8.6 If Item 8.5 is less than 2 q�arters, please pro�ide ans�ers to the follo�ing q�estions:
-
8.6.1 Does the entit� e�pect that it �ill contin�e to ha�e the c�rrent le�el of net operating cash flo�s for the time being and, if not, �h� not?
Ans�er: N�� A��licable
- 8.6.2 Has the entit� taken an� steps, or does it propose to take an� steps, to raise f�rther cash to f�nd its operations and, if so, �hat are those steps and ho� likel� does it belie�e that the� �ill be s�ccessf�l?
Ans�er: N�� A��licable
- 8.6.3 Does the entit� e�pect to be able to contin�e its operations and to meet its b�siness objecti�es and, if so, on �hat basis?
Ans�er: N�� A��licable
N��e: �he�e i�em 8.5 i� le�� �ha� 2 ��a��e��, all �f ��e��i��� 8.6.1, 8.6.2 a�d 8.6.3 ab��e m��� be a���e�ed.
Xref Limited - March Q�arter 2021 Appendi� 4C
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A������� 4C Q�������� ���� ���� ������ ��� �������� ������� ��L������ R��� 4.7B
C��������� ���������
-
1 This statement has been prepared in accordance �ith acco�nting standards and policies �hich compl� �ith Listing R�le 19.11A.
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2 This statement gi�es a tr�e and fair �ie� of the matters disclosed.
Date: 6 A��il 2021
A�thorised b�: The B�a�d �f Di�ec���� �f X�ef Limi�ed
Xref Limited - March Q�arter 2021 Appendi� 4C
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