Camplify Holdings: Prospectus beat highlights business momentum
About the author:
- Author name:
- By Steven Sassine
- Job title:
- Associate Analyst
- Date posted:
- 24 August 2021, 9:30 AM
- Sectors Covered:
- Diversified Financials
- Camplify (ASX:CHL) released its FY21 result, with all key headline metrics (GTV A$32.9m, revenue A$8.4m and take rate 25.7%) coming in ahead of prospectus forecasts/recently provided guidance. The NPAT loss of A$2.1m was also better than our estimates (-A$2.7m).
- Whilst FY22 will be about gaining scale and product innovation, management have reiterated they expect year-on-year bookings volume growth to continue due to pent up demand from locked-down regions.
- We increase our FY22F/FY23F EBITDA forecasts by ~4-9% on improved GTV/revenue growth assumptions and a slightly stronger take rate than previously forecast. Our price target increases to (login to view). Add maintained.
FY21 Result summary – prospectus beat on key metrics
Camplify (CHL) released its FY21 result, with all key headline metrics coming in ahead of prospectus forecasts/recently upgraded guidance. Gross transaction value (GTV) on platform reached A$32.9m (MorgansE A$32m), +172% on pcp, generating revenue of A$8.4m, which was up 190% on pcp (MorgansE A$8m). The take rate remained robust at 25.7% (vs 23.8% in FY20), with the improvement attributed to additional subscriptions and products purchased on the platform. A better than prospectus NPAT loss of A$2.1m was reported (prospectus -A$2.8m, MorgansE -A$2.7m).
The detail – what we liked and what we’re keeping an eye on
The core business continued to show strong momentum despite 12 rolling COVID lockdowns impacting CHL’s operating environment. The key positives in the result, in our view, are:
1) Total paying hirers rose 106% on pcp to >70k with the number of bookings more than doubling to ~30.6k (+128% on pcp);
2) Total RV’s on platform increased to ~6,200 with premium membership subscribers increasing 109% on pcp to ~2.1k;
3) Excluding van sales, the gross profit margin remained broadly stable at 68%;
4) Offshore showed promising signs (albeit off a low base), with the UK GTV up 220% on pcp to A$1.1m (despite lockdowns from Sept-20 to May-21), and
5) CHL continues to launch new revenue accretive products, including Tow Vehicle rentals and RV purchases via Camplify’s manufacturing partnerships (including finance via MME).
Other areas of note worth keeping an eye on, in our view, include:
1) repeat hirers were ~21% (with management commentary pointing to this being an area of emphasis in FY22);
2) Customer acquisition costs remain low (owners ~A$109, hirer ~A$9), how this cost trends as CHL builds out offshore will be a point of focus;
3) fleet growth in offshore geographies (NZ +12% on pcp, UK +11% on pcp) is trailing Australia (+44% on pcp) and
4) Technology investment spend in FY22 will continue as CHL innovates/iterates its Owners App/core platform with additional functionality.
Forecast and valuation update
We increase our FY22F/FY23F EBITDA forecasts by ~4-9% on improved GTV/revenue growth assumptions and slightly stronger take rates than previously forecast. Our valuation is derived from an equally-weighted blend of a DCF and relative valuation methodologies. Our price target rises to (login to view) on the above earnings changes and a valuation roll-forward. Add maintained.
CHL’s management team has shown an ability to build out a successful scalable platform, in our view.
Whilst still in its infancy and not without risk, we believe structural tailwinds supporting CHL and the prodigious opportunity offshore (post lockdowns easing) should provide longer term growth potential for investors
1Q22 trading update is expected in October.
Any indication of local/international restrictions easing and borders re-opening should drive platform demand.
Broadly, the two biggest risks faced by CHL are business disruptions (e.g. bush fires, COVID etc) and those risks associated with being a dominant digital marketplace (e.g. platform risk and competition impacting margins).
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