CHL generates very little interest on Hot Copper, so at the risk...

CHL generates very little interest on Hot Copper, so at the risk of preaching to an empty theatre, I would like to share some of my analysis of CHL's excellent customer metrics. If enough of you think this analysis is of value (e.g. by awarding a GA), I will continue to post on Camplify. It's important that we try to generate more interest on Hot Copper by keeping the conversation going.

Customer Acquisition Cost (Total Sales and Marketing Cost / Total New Customers) has reduced significantly from $326 in H1 FY22, to $258 in FY22, to $141 in H1 FY23. That is down by 57% over the 12 months from H1 FY22 to H1 FY23. This indicates to me that Campify's sales and marketing spend is becoming much more efficient and effective.

So, each new vehicle is now only costing $141 to add to the platform. Yet the total revenue generated in H1 FY23 was $12.4M. That equates to about $925 / vehicle in just 6 months (note that I have calculated this based on my estimate of the weighted average number of vehicles over the six months of 13,400, compared to 9926 vehicles as at 30 June 2022). We all should keep in mind that most vehicles are likely to continue generating this kind of revenue (or higher) for many half-years to come, without any further acquisition cost.

Now it's important to consider the cost to add hirers as well. It's no good adding vehicles if the number of hirers is not increasing. I note that prior to the acquisition of Paul Camper, the ratio of hirers to vehicles was running at around 12 to 1. The cost of each hirer is now down to $11, so IMO we should add the cost of acquiring 12 new hirers for each new vehicle. That is an extra $132, for a total acquisition cost of $273 for one new vehicle and 12 new hirers. Yet, that combination is likely to add around $2000 of revenue within 12 months (allowing for some growth in revenue rates), and then for each year to come until they leave the platform.

I know that revenue is not the same as profit. Camplify is generating around 60% gross margins, so that $2000 revenue converts to around $1200 of gross profit, on a one-off spend of around $273. And it is likely to keep generating that GP for many years to come.

Looks to me like a very profitable business model, which should greatly benefit shareholders as Camplify scales from here.