Good quarter. Was a bit worried about this one given this and the next quarter are traditionally the softest.
Add to this the
Thing that I felt were interesting:
1. Positive Cashflow (again!)Reported $1.06m + cashflow - normalised it was around $1.374m+.
On my numbers for the past 4 quarters they have a positive (and normalised) cashflow of $5.76m+ versus the previous 4 quarters (normalised) of negative - $4.478m. A large turnaround in cashflow within 12 months.
Cost margins have reduced and seemed to be staying low.
2. Take rate & Hirer Insurance (Accident & Excess Reduction Insurance)
Camplify (excl Paulcamper business) take rate was 34.2%.
A material increase and likely sustainable - but with the possibility of it going even higher as new products come online to offer hirers (and owners and 3rd party businesses) now that they have this MGA through Mighway.
As noted, this bump in take rate seems to have largely come from the 51% uptake by hirers on the new Accident & Excess Reduction (AER) insurance on offer.3. PaulCamper Take RateSits at 19% which marginally increased. But 2024 will be where the story lies in this business CHL.
There is a clear pathway now for this take rate to gradually increase towards 25% and eventually towards what is being achieved on the existing Camplify business (@ 34.2%).
a) Hirer Accident & Excess Reduction Insurance
They will likely start to offer this to Paulcamper hirers from around January 2024 but will see the uptick leading into the 2024 season (May to September 2024 onwards).
If they have a similar 51% uptake by hirers of this insurances, then you would expect that this will materially bump-up the take rate from the current 19%.
b) Premium Membership Model
The same Premium Membership model that has been on offer for existing Camplify RV owners, will in a few months, also be on offer to PaulCamper RV owners. As Justin Hales expects, it will start off as amaybe only 20 to 30/50 new premium memberships per month to eventually similar to what they were seeing in the current Camplify business where it went to 300/400 new premium memberships per month.
4. Cost Margins dropped YoY and remaining flat
Marketing and Employee costs (as a % of customer receipts) seems to be remaining at a relatively flat % of revenue - as best as I can track it using Quarterly cashflow.
Staff costs seems to be averaging around 9% of receipts now over the past 4 quarters after previously averaging around 18.50% in the prior 4 quarters.
Marketing costs seems to be averaging around 4.6% of receipts now over the past 4 quarters after previously averaging around 9.90% in the prior 4 quarters.
And even if you assumed that there was 0% Growth in the number of new Hirers, with things like the introduction of this Acciden Excess Reduction insurance in Paulcamper during 2024 and a bump in their take rate alone should see these cost margins decrease even further as a % of customer receipts/revenue.
To summarise as their CFO Andrea put it, 'We continue our focus on cashflow positivity and profitability, whilst achieving solid growth" I couldnt agree more.
(20min delay)