CHL back to $4 ?.., page-2

Agree. Not many posts on here but personally dont see this as a bad thing. Prefer not much chatter compared to constant dribble and ramoing you see on other forums.

$4 per share?
It would therefore have a market cap of around $286m less $26m of Cash so Business Value of $250m approx. It's possible but a lot of Growth expectation would need to be pumped right now given they'll just be entering from loss to profit.

If they demonstrate over the coming 12-18 months that they are not only now profitable but it's also growing rapidly, then yes $4 per share could be back on the cards.

An increase in to the number of Campers/RVs multiplied by an increase in Bookings multiplied by an increase to Take Rate = explosive revenue growth.

And explosive revenue growth on the back of a flat cost structure then equals rapidly growing profits.
That would be the general plan in getting them back to $4 per share and beyond.

Their first step was to turn cashflow positive which they have (unofficially) achieved.
Plenty of cash in the bank and they are no longer burning through it. This start-up has proven to the investment community that it is a viable business and not just an idea that ends up failing like many others we have seen over the past 3 years.

The next step is to achieve profitability - very close in 23FY and I suspect this half-year report may show it's first half year profit.
Which then in turn brings more professional investors in to have a look at Camplify.

It's all good and well to become profitable, but they will need to then demonstrate the potential for rapid growth in profit if they want to justify a $4 share price in the near term.

My general take on the business at the moment....

Camplify (Aust. NZ, UK, Spain)

Take Rate
The take rate in the Camplify businesses was already solid. Especially Australia.
Australia had a 31% avg take rate for 23FY and off memory I believe in some of the later quarters of last financial year it was getting up towards 34% which is very high versus the likes of AirBnb etc. The growth in this take rate seemed to coincide with the introduction of their Accident and Excess Options (AER) when booking, but there could be even further growth in this when they integrate the MGA into their existing insurance offerings.

Average take rate for the other countries was 25.46% NZ, 23.25% UK and 21.3% Spain.

I'd expect over the course of the coming 12-18months that the NZ,UK and Spain to move towards Australia's 30-34% take rate, and potentially the Australian take rate goes even higher off the back of new insurance offerings through Camplify's new MGA (now labelled as "Myway").

Booking Volume
Just using website traffic as an indicator, I'm still seeing growth across all locations.
Average YoY traffic growth for the 6 months ending December 2023 appeared to be 28.6%.
And then January for some reason across all geographies seems to have had some explosive traffic growth when comparing against January 2023.
Australia 69% increase compared to Jan 2023, UK 46% higher, 94% higher for NZ and 85% higher for Spain. Could be an anomoly but will be watching with interest over the coming months.

The traffic into most of their sites also appears to be mostly Direct or Organic versus Paid.

Growth in Take Rate x Growth in Booking Volume = Large revenue growth.

Paulcamper

Take Rate
The take rate in for Paulcamper was already poor at around 18.5% and Camplify saw this as one of the opportunities when acquiring.
With the introduction of some of the tried and tested methods used in Australia, NZ, UK, Spain they should be able to bump this up fairly quickly.

Already I can see on their website when booking that they have a type of Accident and Excess Reduction (AER) option when booking. This alone will add some % to the take rate for this coming Northern Hemisphere peak period.

Booking Volume
Again just using website traffic as an indicator, the growth in Paulcamper doesnt appear to be as solid as the Camplify business.
But it's also not reducing. You could call it flat YoY if anything but in all fairness we have to wait to see what February through to June delivers as this is the prime booking season for the Northern Hemisphere summer.

I'm not that concerned about growth in Booking Volume for Paulcamper at this stage but I will be watching closely the growth in the Take Rate.
If they can get this from the current 18.5% avg to something like 25% take rate then even without out any booking/GTV growth, you would still have an increase in revenue of 35%.

And one day in the not too distant future it gets up towards the 30% take rate level (or more) that the rest of the Camplify business enjoys.

Other - Myway
This new MGA and the ability to customise other insurance offerings will be interesting to watch over the coming years.
It may open up a whole new customer base for Travel/Camping/RV solutions to anyone even if they dont book a van through Camplify.

Those RV/Caravan owners that swear that they will never rent out their pride and joy may end up finding that they still buy insurance on their RV/Caravan (or travel insurance) through a Myway product.

We'll wait and see.

If you're buying shares in CHL then you need to see the long term potential on this one which could be explosive.
But be wary that at the same time, if it doesnt execute well on its growth plans then it runs the risk of just bumbling along with mediocre profit growth. I'm hopeful (but patient) for the more positive outcome.