IHR is getting interesting again with a 2nd bidder emerging (The Access Group), with a 14c a share takeover offer. Still lots of caveats in it and is non-binding but they have been granted an expediated 10 day due diligence to confirm the offer.

HumanForce have positined themselves in a strong position and now own 15% of the company after buying heavily on-market after they made their 11c takeover offer. They now have 5 days to respond with a matching bid to avoid giving the other guys a look at the books. I think the odds are pretty good that they will match it as it looks like they want this prize.

In the half year report management also gave broad outlines how they have contingency plans in place if shareholders vote down the takeover and said they will need to refinance, but are still on track to become cashflow positive with an annual run rate of $9m ARR at the end of last year.

Glad I hung on to my own shares as I was thinking of selling them as I didn't think a 2nd bidder was going to emerge. The market always surprises!

IHR released an updated quarterly with some more info around their tax back for R@D. They had earlier said it was material but have clarified that they are expecting it to be around $1.2M, which is much higher than I was expecting. It will be very interesting to see if they can squeak by without needing to raise but at the least it will get them through until next year and hopefully the Cintra channel starts to deliver.

This is the first quarter report since Matt Donovan took over as CEO, from Rob Bromage who is now an executive director and in charge of products and strategic partnerships. I think this is a good move, I like founder led businesses but I have also seen examples where the skillset of the founder isn't necessarily whats needed to drive the buisness from where it is to where it needs to be. I expecially like it when they can stay involved with the buisness in the area they are good at and don't let egos get in the way, so far it looks like this is happening at IHR. I will watch this carefully though as I wouldn't want to see Rob quit.

I like the way Matt Donovan has reported in this quarterly, good clear summary of the quarters highlights/problems, the previous reports did have a tendancy to hide information depending on which metric was the focus that quarter and lots of visuals that looked good but were sometimes hard to interpret.

Rocket6 and Rapster have given a good summary so I wont rehash beycond adding my thoughts.

-I think the customer churn (0.6% or revenue) on the back of the 10-12% price rise is probably more of the small companies which don't really add much to the bottom line. I will be worried if I see any large enterprises dropping the product. So far all good and they added another 3 in the quarter.

-Cintra reseller arrangement is slower than I was expecting, hopefully the numbers start to increase following the UK launch. Lots of good commentary around new partnerships though and the pipeline does look strong.

Cash of 5.5m is getting low but given they are accutely aware of this I am not as worried as I was previously. They should also get their R&D tax concession back by September, last year it was 800K, which if similiar would provide a nice buffer. So between that, the $500K/qr cost savings, and the pathway to10M ARR by H1 23, I think they might just squeak in without needing a cap raise. If they do though it will most likely be a small sophisticated invester raise and will probably be a good time to buy on market.

One thing I am surprised at is the number of subscribers yet to be invoiced - it is always increasing and is now 16K. I am guessing these are customers that are in the process of transitioning to the software so can't be billed yet.

IHR released there quarterly and overall it was fairly positive and the story is still on track for me and I will be adding more at this level in both RL and STM. I was thinking they might have been dumped during the recent selloff, they did momentarily get to 15c but have steadied around 17c and I think have held up pretty well given that they are a cash-flow negative tech growth company, they are spending 3.4M per quarter and getting 1.2M in cash in from customers.

The growth curves in ARR, customer numbers on platform and headcount and all definately going in the right direction. I am not 100% sure what their professional services constitute, but the revenue from this source is increasing in-line with the growing customer base which is an unexpected positive. Comparing the last two quarters we are getting steady growth and increased 3-fold from a low base in 2019 and the growth rate is accelerating. Customer churn is low so i am fairly confident the ARR values will translate to reliable revenue. They are pointing to momentum continuing into Q3.

December 2021 quarter

September 2021 quarter

They have increased staff costs by 500k in Q2 (1.9M vs 1.5M in Q1) and marketing costs were up 200K in Q2 (800K for H1 22). I am ok with this as they are operating gloabally and from the chart below we can see that sales force and time on the ground does precede growth in customer numbers so happy for this to keeep playing out.