Camplify Holdings: A good quarter in a tough environment
About the author:
- Author name:
- By Steven Sassine
- Job title:
- Associate Analyst
- Date posted:
- 27 January 2022, 11:30 AM
- Sectors Covered:
- Diversified Financials
- Camplify Holdings (ASX:CHL) has released its 2Q22 trading update. It was a good result overall, in our view, highlighting the underlying business momentum/platform resilience during a challenging quarter. 2Q22 GTV of ~A$11.8m (+48% on pcp, +12% on 1Q22), had CHL reaching 1H22 GTV of just over ~A$22m.
- 2Q22 revenue of ~A$4m implies a robust quarterly take rate of ~31% (ex van sales), with 1H22 revenue of ~A$7m coming in ~6% ahead of MorgansF.
- We lower our FY22F/FY23F/FY24F EBITDA forecasts by 0.3%-6%, with lower GTV forecasts offset by stronger take rate assumptions. Our price target rises marginally to (login to view) on the above changes, timing factor impacts of our DCF and a slight lowering of valuation multiples used (given recent sector de-ratings) Add maintained.
2Q22 trading update highlights platform resilience
Camplify Holdings (ASX:CHL) released its 2Q22 trading update, which in our view, highlighted the underlying business momentum and platform resilience in what was again a difficult operating environment (e.g. October restrictions impacting a key holiday booking period).
CHL also added ~20k new customers to the platform and grew its RV fleet to now over 7.3k.
2Q22 GTV of ~A$11.8m was up ~48% on pcp (+12% on the sequential quarter), with the growth seen in UK and Spain over the period a result highlight, in our view (UK GTV +98% on pcp and Spain >1600% off a low base).
This bodes well for the Northern Hemisphere operations, showing signs of momentum coming into their peak seasons. 1H22 GTV (~A$22.3m vs MorgansF ~A$25m) was up ~57% on pcp, with the average booking value actually seeing a slight decrease 2Q on 1Q due to that October impact (~A$1,143 in 2Q vs ~A$1,235 in 1Q).
Revenue in the quarter was ~A$4m (+~140% on pcp), implying 1H22 revenue of ~A$7.1m (vs MorgansF of A$6.7m), with the driver of this result being a stronger take rate for the quarter of ~30.1% (ex van sales). For the half, the take rate blends out to ~28.9% (ex van sales), which is ~200bps above the FY21 take rate.
Regarding the UK operations, CHL has announced an agreement with Comfort Insurance (a UK based insurance company that has ~15% of UK RV’s on its insurance product).
At this stage, it is a marketing relationship, allowing Comfort Insurance (CI) customers to utilise the CHL platform and use their existing CI policy. CI will also actively market CHL to their customer base.
On the recently announced acquisitions of Mighway and SHAREaCAMPER, a decision by the NZCC is expected mid-March 2022.
Investment view and valuation update
We lower our FY22F/FY23F/FY24 EBITDA by 0.3%-6% with slightly lower GTV forecasts offset to a degree by higher take rate assumptions factoring in todays’ quarterly update. We continue to anticipate near term spend as CHL builds out in its newer geographies.
Our valuation is derived using an equally-weighted blend of a DCF and relative value methodologies. Our price target rises marginally to (login to view) on the aforementioned changes, timing factor impacts of our DCF and a slight lowering of valuation multiples given recent sector/peer de-ratings.
Trading on ~2.1x FY22F EV/GTV and ~7.5x FY22F EV/Rev we see these above-peer multiples as justified given CHL’s solid growth pathway both domestically and offshore. Add maintained.
Upcoming price catalysts may include the 1H22 result on 28 Feb, any further commentary on the offshore build-out and the NZCC acquisition decision in mid-March.
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).
Post recent acquisitions, deal integration risk is now a factor.
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