Transcription of Finance News Network Interview with Freelancer Limited (ASX:FLN) Chairman and CEO, Matt Barrie
Hello, I'm Lelde Smits for the Finance News Network and joining me from online job outsourcing company Freelancer Limited (ASX:FLN)
is its Chairman and CEO, Matt Barrie.
Matt, congratulations on listing Freelancer on the Australian Securities Exchange today.
Matt Barrie: Thank you.
Lelde Smits: Freelancer’s offer price of $0.50 per share valued the company $218 million. What did the stock list at and what are your expectations for the stock’s first year?
Matt Barrie: We opened at $2.50 which is over a billion dollars market cap [market capitalisation] and for the future, we’ll just have to wait and see.
Lelde Smits: You established Freelancer as it now stands in 2009. What were your reasons behind taking the company public in Australia today?
Matt Barrie: We had a lot of options open to us but this one, taking it public on the ASX I think, made us sort of masters of our own destiny in terms of how we grow in the future and there’s a long way to go.
Lelde Smits: And while it is still early days have you considered dual listings in time?
Matt Barrie: No, way too early days for that.
Lelde Smits: Freelancer turned down a $US400 million take-over bid by a Japanese company in September. What are your personal ambitions for the company?
Matt Barrie: I want to build Australia’s first big global consumer internet company. There is a long way to go, but I think it’s important to build a technology industry in this country.
Lelde Smits: Some investors have highlighted the relatively small amount of shares on issue, with directors retaining the majority of the company. Why was the issue size capped at $15 million?
Matt Barrie: We didn’t need to raise a lot of money basically and we’ve done pretty well the last four years. We haven’t raised any funds since 2009, we’ve done pretty well. So we thought, you know, sell a bit off now, see how things go, and you know, keep working hard, heads down and execute.
Lelde Smits: Freelancer’s listing has attracted a series of high profile investors. Can you give us an idea who’s jumped on board?
Matt Barrie: We’ve had a number of funds, both here and internationally. So, Caldonia, the majority investor in Zillow for example, very deep experience in market places. We’ve had Candence, Wilson Asset Management. We've got LHC. We’ve got a number of high net worths. The SEEK management team put in about $1 million.
Lelde Smits: So you’ve got a lot of backing.
Matt Barrie: Yes, a lot of backing.
Lelde Smits: The company’s listing has also attracted attention for its relatively high forecast Price to Earnings (PE) ratio of 463. How do you justify to investors the multiple you're asking them to pay?
Matt Barrie: Well I should have been running the business at a loss, shouldn’t I, so that no one could calculate the PE/ I mean a high growth technology company, that is now how you value it. I mean, LinkedIn Corp (NYSE:LNKD) is a $26 billion company with a 900 PE.
Lelde Smits: So the PE is of no interest to you?
Matt Barrie: I just been focusing on the revenue and I’ve just been trying to manage earnings so that they’re slightly greater than zero. The PE at this point is really irrelevant.
Lelde Smits: Let’s look closer at your expansion plans. Freelancer claims to be the world’s largest outsourcing marketplace, boasting 9 million users working on projects worth more than $US1.2 billion. What is your strategy for growing these numbers?
Matt Barrie: I can’t tell you all my secrets. There is a lot of things we’re working on.
Lelde Smits: Freelancer has completed a number of acquisitions of its own. Where are you looking for future opportunities and have you earmarked any?
Matt Barrie: Certainly can’t talk about that.
Lelde Smits: But not something you’re ruling out?
Matt Barrie: No of course not.
Lelde Smits: Have you considered diversification such as new products, features or services?
Matt Barrie: All the time, every day.
Lelde Smits: OK, but again, not something you’re going to give away, no clues?
Matt Barrie: No, not at this stage, no.
Lelde Smits: The company’s IPO [Initial Public Offering] was oversubscribed, raising $15 million. Where will you spend the cash?
Matt Barrie: Just focusing on growth.
Lelde Smits: OK, growth opportunities.
Matt Barrie: Correct.
Lelde Smits: Domestically, internationally, everywhere?
Matt Barrie: Globally, growth.
Lelde Smits: So you’re very globally focused?
Matt Barrie: Australia’s about 4.5 per cent of my business. We’re global from day one. We’re born global.
Lelde Smits: And where do you think the biggest opportunities are in the world?
Matt Barrie: It’s a mix of, you know, major Western markets and major developing world markets. Countries like the US, UK, Canada and so forth and countries like India, Pakistan, Bangladesh and Indonesia and so forth.
Lelde Smits: And you’ve got your eyes on it all?
Matt Barrie: Just everything. World domination.
Lelde Smits: Looking closer at financials. Revenue is forecast to hit $18.3 million this calendar year, but net profit to fall to $471,000. What’s your guidance for 2014 and which figures will you be paying the most attention to?
Matt Barrie: No guidance at this point.
Lelde Smits: No guidance, but-
Matt Barrie: And the revenue figure.
Lelde Smits: The revenue figure is the one that you’ll be paying attention to?
Matt Barrie: We’ll be investing as much as possible into growth.
Lelde Smits: From an investor’s perspective what do you believe are the most compelling reasons to jump on board?
Matt Barrie: Fantastic team, executes well. We’re in a strong position, I think globally, in terms of leadership and we're in a big space. I mean it's a global marketplace of services. I mean, I think in time there is going to be a global marketplace of services the size and scale of eBay or Amazon.
Lelde Smits: Finally Matt, you’ve achieved a massive milestone listing Freelancer and have a lot of skin in the game yourself – what have you set your sights on next?
Matt Barrie: Just head down, execute.
Lelde Smits: Matt Barrie, congratulations on the listing-
Matt Barrie: Thanks Lelde.
Lelde Smits: And all the best in being public.
Matt Barrie: Thank you very much.