IPO - Camplify Holdings Limited - 28 June 2021 #, page-56

(Rolls eyes) at the ‘this is a Covid stock’ comments. Can’t see the forest for the trees.
This is a ‘peer to peer’ company infiltrating a new market for those that hold 'idle' assets in their backyards, and for those amateur campers/caravaners that dont want to outlay the cost to enjoy this.

Most of the population doesn’t even realise this is a thing yet. Particularly if you’re a potential hirer i.e. like all the ‘Noob’ campers like me that don’t own a van, caravan or motorhome but wouldn’t mind giving it a shot every now and then.

In the US you have RVezy being one of the more dominant providers and they started from scratch in 2016. It’s an incredibly new market in an old industry. Like AirBnb was to accommodation, like Menulog was to ordering takeaway. It became ‘the norm’ over time and spread through the demographics.

You also have a company that doesn’t tie up capital physically owning the asset.

I ran a financial model on its EBITDA and NPAT through to 2030 and this thing is literally a ‘hockey stick’ when I look at it’s growth.
22FY to 24FY NPAT and EBITDA is forecast to still be negative as I assume they keep the Employee expenses, Marketing, operations margins elevated relative to Revenue in order to build the base early on. Build the presence. Be the #1 or #2 player in Aust, NZ and Europe.

Then from FY24/25 this thing starts to take off and EBITDA and NPAT starts to double year on year in 26FY, 27FY, 28FY. To the point where I can see this being a $1.15 billion market cap business as we head towards 2030 when it’s a $55m market cap at the moment.

The Micro managers, then the Small cap managers will start to sniff this thing out when it starts heading towards $100m market cap.

It's hockey stick because it Revenue compounds due to all these different multipliers:
- Increase in NEW hirers year on year. Multiplier 1
- New hirers then become return hirers year on year. Multiplier 2
- Hirers may book multiple times in the one year. Multiplier 3
- The average spend per booking climbs – even if it’s just with inflation. Multiplier 4.
- And Camplify earns as a % percentage of revenue.

And the Expenses for business such as this that just need to build the presence, IT and support platforms first then start to flatten out relative to the growth in top line Revenu.

Revenue takes off first, then expense margins stay elevated whilst they build the presence and EBITDA remains low. Then can no longer be contained relative to costs and EBITDA just explodes year on year.

Interesting that IPO raised cash for business re-investment to gain more ground– not to payout it’s existing shareholder (hello Airtasker). Says a few things I feel.

I’ll just keep on accumulating whilst it’s still sub $100m market cap.