Camplify Holdings: Paving the way for a good 2H

About the author:

Steven Sassine
Author name:
By Steven Sassine
Job title:
Associate Analyst
Date posted:
25 February 2022, 8:30 AM
Sectors Covered:
Diversified Financials

  • Having recently released its 2Q22 trading update last month, most of Camplify’s (ASX:CHL) key 1H22 headline metrics were known.
  • 1H22 GTV of A$22.9m was up ~62% on pcp, with total revenue of A$6.8m (+109% on pcp) highlighting a very strong take rate of 29.1% (vs 22.9% in 1H21). CHL’s GM of ~55% (ex van sales) was impacted by an insurance revenue accounting policy change (to AASB4). 
  • We lower our FY22F/FY23F/FY24F EBITDA by ~8%-27% with higher topline growth estimates driven by a stronger take-rate assumption tempered by a lower GM (aforementioned accounting policy change). Our price target is lowered to A$4.75 (from A$5.04) on the above changes and a slight lowering of valuation multiples used (given recent sector de-ratings). Add maintained.

1H22 result - navigating a challenging half

Camplify (ASX:CHL) released its 1H22 result. Having recently pre-released key headline metrics at the 2Q22 trading update, there was little surprise in today’s result, in our view. 1H22 GTV of A$22.9m was up ~62% on pcp with revenue of A$6.8m (+109% on pcp) implying a very strong take rate of 29.1% for the half (vs 22.9% in 1H21 and ~25.7% in FY21).

Analysis

The ~A$23m of GTV for the half saw a greater contribution from CHL’s offshore operations (UK/Spain), with 150% GTV growth in the UK and ~2800% GTV growth (off a low base) in Spain leading to a ~13% group contribution (vs ~3% in pcp).

Group GTV growth was driven by a ~38% increase in bookings (>17.3k) and a ~18% rise in average booking value to A$1,183 (reflecting longer booking length). CHL saw a 13.6% increase in GTV per booked day to $159 with hirers opting for longer trips (global average booking duration now at 7.48 days vs 7.18 in the pcp).

The number of RV’s subscribed to the Premium Membership product doubled on pcp to ~2.5k, with Premium membership and Insurance revenue increasing ~115% on pcp to ~A$2.5m. CHL also grew its RV fleet on platform to over 7.3k (vs ~6.2k at FY21 end). 

GM (ex van sales) of ~55% was down from 72% on pcp as CHL underwent an Insurance revenue recognition policy change (1H22 hirer related GM at 77%). CHL also ramped up marketing in the half to drive GTV growth, with GPAPA broadly flat on pcp at ~A$1.6m (GPAPA margin ~24% vs ~39% in 2H21). 

CHL continues to launch ancillary products/revenue drivers (revenue quantum unknown at this early stage) with a number of new initiatives recently offered/planned for 2H22. These include tow vehicle rental, RV sales (A$824k in 1H22), event partnerships, temporary accommodation programs and a managed service for investor vans (4Q launch, higher take-rate product).

FCF of ~-A$1.8m was driven by ~A$1m capex primarily related to head-office fit-out. CHL had ~A$19.3m cash on balance sheet at Dec-21.

Investment view and valuation update

We lower our FY22F/FY23F/FY24F EBITDA by ~8%-27% with higher topline growth estimates (driven by a stronger take-rate assumption) tempered by lower GM forecasts. Our valuation is derived using an equally-weighted blend of a DCF and relative value methodologies.

Our price target is lowered to (login to view) on the above changes and a slight lowering of valuation multiples used (post recent sector de-ratings).

Whilst acknowledging current global macro and geopolitical concerns may weigh on market sentiment near term, we believe CHL has a long growth pathway ahead of it and is guided by a management team that has shown an ability to build out a successful, scalable platform. Add maintained.

Risks

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 risks and competition impacting margins). Post recent acquisitions, deal approval by NZCC and deal integration risks are also a factor

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