IMO the slides are somewhat misleading about their gross margins.
On page 9 they try to paint a picture that whilst ARPU is falling, their gross margin is actually ahead of prospectus. Good news.
But if you compare gross margin for 2H15 vs 1H16 the numbers are:
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
| 1 |
|
ARPU |
Gross Margin % |
Gross Margin $ |
| 2 |
2H15 |
$26.99 |
29.8% |
$8.04302 |
| 3 |
1H16 |
$26.34 |
30.4% |
$8.00736 |
(from slides 8 and 9 of
http://www.asx.com.au/asxpdf/20160219/pdf/43551c5c1bnh30.pdf)
So their gross profit is actually falling despite improved margins because ARPU is falling faster than margin improvement. I think this will continue because of very aggressive competition in the market right now - triggered by TPG's move of 320,000 customers from Optus to Vodafone.
This could be ok if they can grow customer numbers quickly which would explain the Vaya purchase. But they paid $500/customer for Vaya, and if they're lucky they might make $100 per customer per year before overheads.
I still like them as a customer but IMHO from an investment POV the folks who have done well out of Amaysim are the vendors who cashed out $192m during the IPO.
