Screening and verification company CV Check (ASX: CV1) has recorded the best start to a financial year in its entire history, after achieving yet another cash flow positive quarter – its third in a row.
According to chief executive officer Rob Sherwood, the company’s strongest start to a financial year now leaves it “primed for rapid growth in the 2020 financial year”.
CV Check says it has secured further business-to-business (B2B) customers which were largely responsible for its “impressive” quarter.
However, shareholders will have to wait a few weeks before seeing specific details relating to performance. Further details of its record-breaking year are expected to be published in a comprehensive update as part of a quarterly cash flow report at the end of July.
In today’s update, CV Check noted it recorded positive cash generation of $26,000 from normal operating and investing activities for the past quarter.
The result represents a $704,000 improvement on a quarter-on-quarter basis and brings its total cash balance to $3.1 million, a 105% improvement.
White label boost
More specifically, CV Check attributed its best quarter to a new white label feature that is helping to propel its customer base growth.
During the past quarter, CV Check released phase one of its white label screening and verification solution and found immediate success by securing Visy Industries as the white label’s foundation large enterprise customer.
Additionally, an as yet unnamed university and a construction company are currently implementing their “tailored” white label solutions, first conceived and during the past six months.
CV Check provides check products to employers, industry associations and individuals via the CV Check brand on its proprietary online platform.
The company has been operating for more than 10 years and has developed a robust online platform providing a comprehensive range of checks across the globe.
Earlier this week, CV Check announced that the Public Fundraising Regulatory Association (PFRA) adopted the company’s product as part of its regulatory function in the charities and not-for-profit industry sector.
The industry already comprises more than 50,000 registered charities across Australia with hundreds more registering every month which means CV Check will have a growing addressable audience.
The PFRA is responsible for industry self-regulation and its members comprise over 85 major enterprises operating globally.
Since commencement in early June, this approach has already resulted in accounts being set up by over 15% of the members. The company has declared that “orders have been received and revenue is already being booked”.
The full scale of the opportunity is being assessed but for those enterprises that have already on-boarded the annual recurring revenue per account is expected to range between $12,500 and $25,000.
“CV Check is delighted to have won Visy Industries with the decisive factor being our phase one white label solution. Visy Industries is already ordering whilst our other notable wins are in the account set up and user onboarding phase,” Mr Sherwood..
“The result is particularly noteworthy as it comes after absorbing the cost of doubling our salespeople and added marketing spend in the quarter.”
“The solid financial performance was driven by our rapidly expanding B2B activities which are delivering a steady increase in predictable annualised recurring revenue. Continued investment in CV Check’s proprietary technology platform underpins the company’s major market advantage,” said Mr Sherwood.
This morning’s financial performance helped CV Check’s shares to add almost 5% up to $0.225.