The Xref Ltd (ASX: XF1) share price has been one of the best performers on the Australian share market on Tuesday.
In morning trade, the human resources technology company's shares jumped 32% to a record high of 49 cents.
The Xref share price has eased slightly since hitting its high but remains up 26% at 46.5 cents currently.
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Why is the Xref share price rocketing higher?
Investors have been bidding the Xref share price higher today following the release of a strong fourth quarter update.
According to the release, Xref expects to report record sales of $6.37 million and cash receipts of $5.93 million for the quarter.
A key driver of this growth was the introduction of several big-name customers during the period. This includes the RACV, NIB Holdings Limited (ASX: NHF), and Prospa Group Ltd (ASX: PGL) in Australia. Outside Australia, the company added the New Zealand Ministry of Health, Brighton FC, Ferrovial Construction, and Eurofins Scientific.
Management notes that COVID-19 has accelerated the global demand for remote working. This has led to organisations seeking better ways to perform candidate verification, leading to growing demand for its self-serve platform.
Another positive which is likely to be giving the Xref share price a boost today, is that the company was cash flow positive during the fourth quarter. Management notes that its operating cash outflows were $3.43 million, compared to cash receipts of $5.93 million. This meant an operating cash surplus of $2.5 million.
As a result of this, the company ended the period with a cash at bank of $8.19 million. This is up from $2.94 million a year earlier.
Management commentary
Xref's Executive Director and CEO, Lee-Martin Seymour, said: "The extreme unpredictability of market conditions in FY21 meant it was one of our most challenging financial years to date. However, we are proud of the many strategic decisions we made which resulted in us emerging from the pressures of the pandemic in our strongest position to date."
"Over recent years we have focussed on building Xref's online brand presence, third party ratings and self-serve products. This digital-first approach has been vital to our growth in 2021 as global employers search online for better ways to verify and measure talent. Our results not only reflect the critical nature and demand for the Xref platform but demonstrate the brilliance and professionalism of the Xref team. The year ahead will bring new products, sustained profitability and continued growth. We are all very excited to discover what FY22 will hold."
The Xref share price is up over 150% since this time last year.
