Chairman's Address to Shareholders
Sydney, May 16, 2014 AEST (ABN Newswire) - CEO & Chairman Freelancer Limited (
ASX:FLN) provided the following address at the annual general meeting on 16 May 2014.
Good morning, ladies and gentlemen.
I would like to commence the Chairman's address today by providing a brief overview of the Company and I will then provide an overview of the Group's financial performance in FY13 and make some comments about FY14.
We will then turn our attention to the matters to be resolved at this meeting in the 'Formal Business' section, before closing the meeting.
Freelancer is the world's largest freelancing, outsourced services and crowdsourcing marketplace by total number of users and number of projects posted. Over the 2013 financial year, the Company experienced significant growth in users, projects and contests posted, bringing the total number of registered users to 9.7 million, and the total number of projects and contests posted to 5.3 million.
Today we have 11.8 million registered users, including users from recent acquisitions, and 5.9 million projects and contests posted.
Performance in FY13
I am pleased to present some of the key financial and operational highlights delivered by the Company in FY13:
- Net Revenues up 77% to $18.8 million;
- Gross Payment Volume up 66% to $84.4 million;
- Operating EBITDA up 53% to $1.2 million; and
- Operating net profit up 46% to $1.1 million.
The Company has historically achieved year on year monotonic acceleration in revenue in line with the overall growth in marketplace demand and increased sales of value added services.
Gross margin in FY13 was 87.6% compared to 87.4% in the prior period in 2012 reflecting a slight increase in payment processing efficiencies due to scale benefits and internal process improvements.
Gross Payment Volumes have in turn grown substantially through continued improvement in website functionality, useability and performance and the execution of various successful user, project and contest acquisition strategies.
The marketplace's take rate in FY13 was 22.2% compared to 20.9% in the prior period in 2012 reflecting an increase in non-commission based fees generated from the online marketplace and its users.
With limited funding historically, the Company has managed its operating cost base to be marginally profitable and cash flow positive with the aim of maximising re-investment in product development and topline growth, and is pleased to have done so in FY13.rican Resources
In FY13, the Company achieved EBITDA (excluding IPO costs) of $1.2 million and positive operating cash flows of $0.2 million.
Reported pre-tax Profit for FY13 was $0.6 million, and reported Net Profit was $0.8 million, which included a tax benefit of $0.2 million.
As at 31 December 2013, the Company held cash and equivalents of $24.4 million.
The Board did not declare a dividend for FY13 as the Directors expect to continue re-investing the Company's earnings into the development and expansion of its online marketplace and to lay the foundations for continued global growth.
Start to the Year 2014
After a successful debut on the ASX last year, the Company has stepped up its investment in people and global presence to support its aggressive growth and expansion strategy.
In order to support this strategy, the Company has opened additional offices in Vancouver, Canada and London, United Kingdom to provide additional engineering and marketing and communications support throughout North America and pan-Europe respectively. The Company is aiming to grow its staff in those offices during the course of this year.
In addition, the Company has significantly expanded its campus in Manila, Philippines where the Company's customer service operations are predominantly run, as well as other product and engineering functions.
The Company has also utilised its strong balance sheet to make several strategic acquisitions that we expect to greatly enhance and compliment the core online services marketplace, including:
- the leading pure play online services marketplace in Poland, zlecenia.przez.net;
- a leading virtual content marketplace, fantero.com; and
- the world's largest Internet marketing marketplace & community, Warrior Forum.
We expect these acquisitions to be highly accretive to our core services marketplace. In particular, Warrior Forum with its more than 730,000 registered users, provides us direct access to Internet entrepreneurs and marketers. Internet marketing is an important category of work in our online services marketplaces.
Outlook
We are at the very beginning of a global revolution in the way that we do work.
Over the decades to come, the rest of the world's population will be connecting- at an accelerating pace. More and more industries will be eaten by software, and more and more jobs will be performed with a computer and will head into the cloud. People on opposite sides of the world will increasingly work together, and through software it will be as seamless as if they were in the same room together.
We believe, in time, it is inevitable that a global marketplace for services will emerge, that will be of a similar size and scale as global marketplaces for products like eBay, Amazon and Alibaba.
Freelancer is uniquely positioned to be this marketplace, and we are proud to be doing so as an Australian company.
Going forward we will be focussed on improving scalability, strengthening the team, and our marketplace. We will continue to focus on innovative product development, and continue to expand across regional and multilingual markets, and across job categories.
Thank you
I would like to acknowledge my fellow Directors, the strong leadership team, our valued employees and my fellow shareholders for their continued support of the Company.
Thank you.
Matt Barrie CEO & Chairman Freelancer Limited
About Freelancer Ltd
Triple Webby award-winning Freelancer.com is the world's largest freelancing and crowdsourcing marketplace by total number of users and projects posted. Tens of millions of registered users have posted 7+ million projects and contests to date in over 750 skill category areas as diverse as website development, mobile apps, logo design, marketing, copywriting, astrophysics, aerospace engineering and manufacturing. Freelancer Limited is listed on the Australian Securities Exchange under the ticker (ASX:FLN).
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