Acquisition core to Hipages success

This ASX-listed tradie on-demand company says its new Tradiecore product is ready for launch.

Hipages chief executive Roby Sharon-Zipser says the company’s major acquisition, Tradiecore, will help it further position his business for subscription success, as it ditches its old business model and moves to tap into the on-demand tradie ecosystem.

The ASX-listed outfit announced it had acquired Call of Service in 2019, and is now ready to launch the company’s product, rebranded as Tradiecore, which will offer hipages tradies new tools including accounting, budgeting and business intelligence functionality.

“It had a really good technology stack, but it wasn‘t really designed for infield service. It was more designed for medium and larger sized businesses. So we’ve taken it and enhanced it to work in the field,” the executive said. ”What we’re offering tradies now, beyond a marketing channel, is a tool for them to manage and run their businesses better, and Tradiecore is going to do that for them.”

He said that the new product offers scheduling, quoting and invoicing for tradies, as well as integration into accounting software and business intelligence around how effective their marketing is and how protiftable their jobs are.

“If you‘re a customer of hipages, it will be sold separately, but we’ll offer a discount as part of a bundled offering,” Mr Sharon-Zipser said. ”We’re in pre-launch phase with it for now.”

Hipages last week lifted its full year guidance detailed in its prospectus and announced it now expects to turn a small profit as a home renovation boom lifts demand for tradespeople.

In the third quarter total revenue lifted 18 per cent on the prior comparable period to $14.3m, while total job volume lifted 17 per cent to 400,000.

“The subscription model is really working,” Mr Sharon-Zipser told The Australian. ”I‘ve never seen this kind of demand for trade services before, and there are a few factors driving it. We are obviously spending more time at home, with companies restructuring how they’re working.

“And obviously there are incredibly low interest rates and people are putting more money into their homes, and renovating. So there are a number of factors behind the strong momentum.”

In its results, average revenue per tradie lifted 29 per cent to $1606.

The company now expects total revenue to be 19 per cent higher than previously forecast for the full year, at $57.7m, with recurring revenue to grow 12 per cent to $52.6m.

EBITDA before significant items is predicted to grow 16 per cent above forecast to $11.5m while net profit is now expected to hit $300,000 – compared to a forecast net loss of $1.8m.

“We started with being a transactional business, and now we‘re fully subscription. And what we also see down the track is really nice opportunities through payment solutions, and lending solutions for the tradies because we can see how much they’re invoicing and we can support them with lending to help them with their cash flow,” Mr Sharon-Zipser said.

“We can also allow them to be lenders themselves and offer buy now, pay later solutions, the list goes on.”

Hipages is part-owned by News Corporation, publisher of The Australian.