Hipages Group Holdings Ltd (ASX: HPG) has a strong balance sheet, putting it in a strong position to grow through acquisitions, the company's shareholders were told on Thursday.
The chair of the company, Inese Kingsmill, told shareholders at the company's annual general meeting (AGM) that FY25 had been a transformational year for the company, "as we continued our evolution from marketplace to SaaS-enabled platform, while maintaining our strong and profitable growth trajectory''.
The company last financial year grew revenue by 10% to $83.1 million, while net profit after tax came in at $2.4 million, a 33% decline from the previous year.
Hipages operates a digital marketplace where users can source and book jobs with tradespeople, who can also use the platform to manage their job acquisition and billing.
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Strong balance sheet
Ms Kingsmill said in her address to the AGM that the company's strong financial position gave it plenty of options, including possible merger and acquisition activity.
She told the meeting:
Our robust balance sheet was further strengthened this year by our strong free cash generation, with a closing cash balance of $26.9 million and no debt. This provides the group with a strong foundation to continue investing in our strategic evolution, including selectively exploring inorganic opportunities to accelerate our growth and deliver additional capability.
Ms Kingsmill said the company didn't declare a dividend in FY25. Instead, she said the board determined the best use of funds was to invest for growth.
On this front, the company was, "embedding generative, predictive, and agentic AI applications across our product and operations, positioning Hipages to deliver greater value to both homeowners and tradies''.
For homeowners, this means simpler discovery and smarter ways to plan, connect, and manage projects. For tradies, it means AI-driven tools that support quoting, scheduling, customer management and business optimisation.
Chief executive Roby Sharon-Zipser told the AGM the company was targeting revenue growth of another 10%-12% this financial year, and free cash flow of $8 million to $10 million.
Shares looking cheap
E&P Capital analysts said on Thursday the reaffirmation of guidance was welcome, "as is the reiteration of the long-term target of achieving 30% cash EBIT margin (from 7% in FY25)".
E&P Capital has a bullish price target on Hipages shares of $2.14, compared with the share price on Thursday of $1.36.
Should this be achieved, it would represent a shareholder return of 57.4%.
Hipages was valued at $184.8 million at the close of trade on Wednesday.
