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Hipages Group Holdings (ASX: HPG) has hammered out is first annual profit as the company’s platform that connects homeowners with tradies benefitted from a rise in economic uncertainty for the construction sector.
The company says it has achieved “inflexion point” with its business by delivering positive free cash flow of $2.1 million in FY24, helping it post a $3.6 million bottom-line profit for the year.
The result compares with a $5.1 million loss in FY23 and was supported by a 13 per cent lift in revenue to $75.8 million.
This is despite subdued consumer demand which led to a 6 per cent drop in posted jobs to 1.3 million jobs, although the company notes that the number of tradie-homeowner connections grew 3 per cent to a record 2.7 million.
Revenue was supported by more tradies opting for higher subscription packages as they sought out higher quality jobs on the platform.
“FY24 demonstrated Hipages’ ability to deliver growth and profitability as we benefit from continuing momentum on our marketplace, which has seen further improvement in our key revenue metrics and as we drive operating leverage through our disciplined cost management,” says Hipages Group co-founder and CEO Roby Sharon-Zipser.
“The value proposition of the Hipages online marketplace continues to build in the current uncertain economic environment.
“Tradie subscriptions are growing as tradies seek high quality leads and homeowners are benefiting from strong job connection rates, which now stand at a record 86 per cent.”
Sharon-Zipser notes that the group continues to achieve double-digit growth in average revenue per user and monthly recurring revenue.
This is thanks to improvements in its lead pricing algorithm and proactive account management capabilities that has helped push both new and returning tradies into higher subscription packages.
“Importantly, FY24 has seen Hipages deliver $2.1 million of free cash flow generation. This is a significant milestone and is achieved through our unrelenting focus on driving sustainable revenue growth as we maximise the value exchange in the platform, and our disciplined approach to both operating costs and our investment spending.”
The CEO adds that the strong operating cash flow has allowed the group to continue investing in optimising its business and building out the platform.
“During the second half we successfully launched our Tradiecore single tradie platform and have a range of exciting upgrades and initiatives planned for FY25,” he says.
“These are expected to further increase our market penetration and better reflect the value of our services to tradies and homeowners.”
Hipages has lifted monthly recurring revenue by 13 per cent to $6.4 million, while average revenue per user is up 11 per cent to $2,079.
The company has posted record marketplace activity, as tradies competed for fewer listed jobs, pushed recurring revenue up 15 per cent to $72.1 million.
The latest earnings performance led to a sharp lift in Hipages Group’s share price today. The shares were trading at $1.48, up 20c, or 15.6 per cent, at 11.46am (AEDT).
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