FSB Desk Note

22^nd June 2016

**SALES DESK COMMENTARY**

LiveHire Ltd (LVH, $0.15, mkt cap $30M) – Unique platform offering real-time, “live”, and updated connections between employers and candidates continues growth momentum. RECOMMENDATION RESTRICTED.



UNIQUE “CANDIDATES ON-DEMAND” PRODUCT

• LiveHire (LVH), which listed on the ASX on June 10th, serves the lucrative and costly HR and recruitment market. The company raised $10M in its IPO and has a market cap of ~$33M. The share price performance post the IPO has been no doubt impacted by general market nervousness (e.g. Brexit), but creates an opportunity for investors.

• LVH’s Talent Community platform allows employers to access, and interact with, candidates in real-time. Employers use LiveHire to create an up-to-date database of potential candidates from a variety of sources – known as a Talent Community. Unlike other typical HR databases, LVH’s Talent Community is not outdated, cumbersome, or disparate. Instead it allows live, real-time, centralised, and interactive messaging between employer and candidates who are engaged, qualified and available.

• Employers invite candidates from a number of sources. The LiveHire platform is medium agnostic, allowing employers to invite and aggregate candidates from a number of sources – e.g. stale offline ATS (applicant tracking systems) with past applicants, social media, company websites, job boards, targeted emails, referrals, email signatures, internal employees – into their own private Talent Community. LiveHire does not compete but actually complements HR platforms that source candidates e.g. via job boards.

• Proactive rather than reactive. Candidates can create a digital personalised LiveHire profile, and join talent communities of companies who they wish to work with or have an affinity to. This proactive approach is rated highly by employees in successful hires, rather than typical reactive responses (eg replies to posted vacancies on job boards).

• Reducing cost and time to hire. Prior to a vacancy arising a company can prepare pools of talent, to then filter, search, rank skills, and prioritise the most appropriate candidates within its Talent Community, and message them (directly to their personal mobile phone or email) to speedily ascertain their interest. Cost of hiring is reduced as the LiveHire platform aids productivity and streamlines the process and in long-term with scale, minimises the need to advertise outside the Community. In addition to the productivity cost savings, time to hire also declines as the community’s digital profiles eliminate the need to ask, receive, and process CVs.

DOUBLE DIGIT MONTH-ON-MONTH GROWTH IN CONNECTIONS

• Growth in connections demonstrates strong momentum. The LiveHire platform is rapidly gaining scale, the company reported 130k Talent Community connections (TCCs) as at end of May, up from ca. 50k end December 2015. This equates to compound month-on-month growth of 21%. TCCs are the lead indicator to the company’s subscription revenue, with LVH typically charging clients a fee of $0.50 per TCC per month. Importantly, for future scale and growth, candidates can be a part of numerous Talent Communities.

• Respected industry leader as Chairman is an endorsement. LVH was founded by Antonluigi Gozzi (MD) and Mike Haywood (Director of Growth). Chairman is Geoff Morgan AM, founder of Morgan & Banks and Talent2, who is an endorsement of LVH’s product and management.

IMPRESSIVE CLIENT BASE

• Impressive client base includes Bupa, KPMG, Alfred Health, and Ernst & Young. LVH has over 40 clients across diverse industries, including KPMG (Professional Services), Bupa (Healthcare) and Barminco (Mining). Visit LVH’s YouTube channel https://www.youtube.com/channel/UCNn54x7pZqZfoV7TvF95gjg to view glowing testimonials. Just last week the company signed Alfred Health, Victoria’s largest healthcare provider.

• Signing of cornerstone clients such as Alfred Health form a pillar of LVH’s strategy to scale. LVH intends to identify and sign industry leaders to invite the majority of an industries talent to the LiveHire platform and in turn creating a unified profile for the industry to encourage fast followers (other industry players) to join the ecosystem of industry talent.

• Recruitment Process Outsourcing (RPO) firms another channel of growth. Around 40% of large employers use outsourced recruitment services to manage the end to end hiring of new employees. The LiveHire Talent Community platform can be used by RPOs to deliver recruitment productivity and accelerate market penetration of the platform to corporates, while saving the RPO costs and time in recruiting for their clients.

• Potential to scale internationally. LVH’s product is applicable to enterprises with as few as 50 employees to large corporations with thousands, which makes it a participant in a lucrative market. The company is currently focused on Australia but we can see that successful penetration domestically will provide a strong future springboard into other geographies, particularly through global RPOs.

• Ample news flow to come - new cornerstone clients, channel partners in form of RPOs, and growth in connections should provide clear share price catalysts. We expect the LVH share price should re-rate upon company news of signing major customers, as well reporting continued growth in its talent community connections.

• Foster Stockbroking is restricted on providing formal research coverage and a recommendation on LVH.