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Value of Clipp, page-5

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4,115 Posts.

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27/11/15

08:26

Post #: 16490255
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Originally posted by z man ↑

This investment has the potential to become the next Menulog which was sold for $855 million on a multiple of 17 times revenue of circa $40 million. Here are the similarities between Clipp and Menulog:
1. Exponential growth in registered users - Clipp has registered users have grown 160% since June 2015 (that's approximately 50,000 registered users). They have a target of driving this to 200,000 in a short period of time). In fact MBE believe that can easily achieve this but prefer to focus on adding venues for now rather than driving app installations.
2. Increase in venues - ALH owned by Woolies have signed up all their 300 pubs and clubs. Wesfarmers owns 90 through Spirit Hotels and Gaming and ALE Property Group own another 86. These are easy targets and it shouldn't be too long before these are added.
3. Menulog had a near monopoly in its market. Clipp is the only credible bar application in the market place.
4. Menulog makes 10% on the transaction value generated through its platform (that's roughly $400,000,000). Chris has aspirations of generating 5% or 6%. He gave a quick example at the AGM of 200,000 users spending $60 either per week or per month (I can't remember). But let's assume its per fortnight, this would equate to transactional value of $312,000,000. Apply a multiple of any where between 10 to 17 , and this adds up to a lot of dollars.

What is even more exciting is that this application can be taken overseas, imagine the endless possibilities in a place like London where there are over 7,000 pubs.

Now include the potential of targeted advertising revenue to the Clipp app users, which by the way is under discussion, and you have a very interesting proposition indeed.

Am I just dreaming? If there is so much potential, why then was MBE able to buy it for so cheap? I think the answer is that to become great, the owners of Clipp had to carefully select a partner to help Clipp realise its full potential. In MBE, they have found the perfect partner.

The best thing about this is that none of this potential value has been priced in just yet as everyone is looking just a few months ahead. I think we will start to see the real potential is about 18 month's time as MBE will want to crank up sales revenue before it consolidates Clipp in its accounts.

Those giving away their shares at current levels will regret it.

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Clipp were desperate for money. They were cheap because they had no cash left. Australia has penchant for being risk adverse - it's easy to see why Clipp didn't seem like value opportunity to most.

MBE on the other hand knows the mobile ecosystem well and was well placed from an industry point of view to make an investment.

MBE Price at posting: 34.5¢ Sentiment: Buy Disclosure: Held
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Value of Clipp, page-5

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