Camplify Holdings: A solid quarter to set up growth into FY23

About the author:

Author name:

By Steven Sassine

Job title:

Associate Analyst

Date posted:

27 July 2022, 7:00 AM

Sectors Covered:

Diversified Financials

• Camplify (ASX:CHL) released its 4Q22 trading update, which in our view showed not only strong growth in key metrics but also highlighted that the underlying momentum in the business (post lockdowns easing) continued throughout the fourth quarter.
• 4Q22 GTV of ~A$17.7m was up ~83% on pcp and +36% on 3Q22, taking 2H22 GTV to ~A$31m (vs MorgansF A$32m). Revenue for the quarter was A$5.6m (+~104% on pcp, +37% on 3Q22), taking 2H22 revenue to A$9.7m (vs MorgansF A$9.1m), representing a 2H22 take rate of ~31.5%.
• We lower our FY22F-FY24F topline estimates by ~3-4% factoring in the quarterly update. Our target price remains largely unchanged at (login to view) on the above changes offset to a degree by a roll-forward of our valuation. Add maintained.

4Q22 trading update

Camplify (CHL) released its 4Q22 trading update, which in our view showed strong growth in key metrics and highlighted the underlying momentum in the business post lockdowns easing continued throughout the fourth quarter.

With a recent FYTD update provided in June, there was little new detail in the release, however we remain comfortable with the growth trajectory of the business and the potential to further gain share in offshore geographies.

The details

4Q22 gross transaction value (GTV) was up ~83% on pcp (+36% on the sequential quarter) to ~A$17.7m, taking FY22 GTV to ~A$54m, +63% on pcp (vs MorgansF A$55m). Revenue for the quarter was A$5.6m (+~104% on pcp, +36% 3Q22), taking full-year revenue to ~A$16.5m (vs MorgansF ~A$16m), representing an annual take rate of ~30.8% (including van sales).

For the quarter however, CHL saw a dip in its take rate to 25.5% (from 29.4% in 3Q22) primarily due to the recent government contract wins within the Temporary Accommodation Program (e.g. emergency flood zone housing) impacting the overall commission rate.

Other details to note: 1) On the other geographic regions, the NZ market showed strong recovery post lockdowns easing, with a +146% GTV increase on pcp and has also seen future bookings increase significantly (+1146% on pcp).

The focus post the integration of recent acquisitions will turn to reactivating some of the dormant RVs in the NZ market (noting the acquired database has ~4x the vehicles that are currently on the CHL NZ platform).

Spain saw GTV growth of ~580% on pcp (off a low base). UK appears to be tracking well and is now within its seasonal peak period, with management commentary indicating GTV growth for the quarter of 103% and revenue growth of 155% on pcp (4Q22 take rate at 34%).

Future bookings for the group also look robust at ~A$14.8m; and 2) Cash burn for the quarter was ~A$2.2m leaving CHL with ~A$15m cash on balance sheet.

Forecast and valuation update

We lower our FY22F-FY24F topline estimates by ~3-4% factoring in the quarterly update, however we still project a robust ~67% 3-year revenue CAGR.

Our target price remains largely unchanged at (login to view) with the above changes offset to a degree by a roll-forward of our valuation. Add maintained.

Investment view

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 should provide longer-term growth potential for patient investors.

Risks

Broadly, the two biggest risks faced by CHL are business disruptions (e.g. bush fires, floods, etc) and those risks associated with being a dominant digital marketplace (e.g. platform risk and competition impacting margins).

Find out more

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Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.