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GROWTH: The Freelancer Ltd share price soars on profit

The Freelancer Ltd (ASX: FLN) share price soared 5% following the release of its half year profit result.

Here are the key takeaways from the Freelancer report:

  • The total value of projects posted was $666 million, up 190%
  • Revenue was $52.7 million, up 37%
  • Gross profit came in at $45.6 million, up 36%
  • Operating cash flow was $4.5 million, up from $1.5 million
  • Operating profit was $0.1 million
  • 2.6 million new jobs were posted in the half, up 53%
  • Freelancer now has 23.3 million registered users, up 23%

Freelancer owns the popular crowdsourcing site, Freelancer.com. Basically, employers (or just ordinary people) who need a specific job that can be completed by anyone — it does not matter who or where they are — can post a contest or ‘project’ for people with the right skills to complete. There are many different ways projects can be posted or skilful people can be hired, but Freelancer ‘clips the ticket’ when money is transferred. It also charges for premium features.

The company’s Escrow.com business, which it acquired in 2015, provides secure online transactions for Freelancer but also creates payment solutions for other services. In 2016, Escrow.com grew its user base by 8.6% but transactions decreased 5%.

In the past year, Freelancer acquired Nubelo and Prolancer, similar businesses focused on the Latin American markets.

Looking ahead over its full 2017 financial year, Freelancer expects more “exceptional” growth in revenue and project value. It also expects an operating net profit, excluding share-based payments.

Should you buy Freelancer Ltd shares in 2017?

Freelancer.com is the largest global community of freelancers, but it’s not the only site doing similar work. In fact, competition is a little stiff. However, so far, the company appears only to be getting bigger, with its technology becoming more and more sophisticated.

At today’s prices, I think Freelancer could be worth a few investment dollars on the outside chance it becomes the online job powerhouse.

Big, Fat, Dividends

This company's dividend is almost the stuff of legends. Its reliable cash flows support a high payout ratio, and the company's stash of franking credits are the cherry on the top of the dividend cake. Based on the last 12-months of dividends, shares are offering a fully-franked 6.5% yield, which grosses up to a whopping 9.3%, when those franking credits are included.

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes and encourages your feedback. You can follow him on Twitter @OwenRask.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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