While the future on when Aussies can holiday overseas remains unclear, one company is seizing the opportunity that has now become the norm since the pandemic, domestic tourism.
Camplify (Proposed ASX code: CHL), is an online platform which connects owners of campervans, caravans, and motorhomes to keen outdoor holidaymakers, renting them out in a similar way to how owners of houses list them through Airbnb.
After beginning seven years ago, the platform has since become heavily established in the RV rental marketplace, facilitating the transactions of over 50,000 bookings and 1.5 million overnight stays to date. The company, which makes a commission on the transactions, has distributed over $35M to the owners of recreational vehicles across Australia and internationally, including NZ, UK and Spain.
The company reports that pandemic conditions have ‘fast-tracked’ their growth. The popularity, and necessity, for RV holidays in Australia saw an estimated 14 million last year. It seems that hirers are also consistently spending more on the total booking value of the trip, with the average value forecasted to be $1,002 this financial year, up from $793 two years ago.
The growth in the industry has been reflected in the company’s financial performance. The company’s revenue grew by 131% from FY20 to this year’s forecast, after previously growing 81% year on year from FY19. While their revenue growth has been significant, it is also notable that their gross margin percentage has stayed within 1% of previous years across the same period, calculated as their gross profit of revenue hovering around 70%.
Additionally, the impressive jump in Camplify’s revenue has not been able to offset their forecasted pro forma loss for the FY2021 period of $3.3M, recording similar losses of $3.2M and $2.2M in FY20 and FY19 respectively. Additionally, while the company’s cost of sales is forecasted to be lower, as a percentage of revenue, from FY20, their operating expenses grew by $2.7M, attributable to increases in employees, marketing, and operating expenses respectively.
Because of the nature of such peer-to-peer business models, there is huge operational reliance placed on the platform. Camplify needs owners to continue to put their vehicles on the platform, and hirers will have to keep wanting to pay to use them. As international travel eventually returns as an option for Aussies, a return to the pre-pandemic popularity of domestic RV holidays must be considered.
Of the cash proceeds received under the offer, a considerable 67% is proposed to be used for pursuing growth strategies and investing in the Camplify business model. Expansion costs around product development are estimated to make up $2.6M (23%), with the remaining 11% allocated toward costs of the offer.
The company is due to list on the exchange on June 28, with the offer expected to close June 18. Camplify is looking to raise $11.5M at an offer price of $1.42 per share, which would give the company an indicative market cap of just over $58M. Morgans Corporate Limited are acting as lead manager on the deal which is fully underwritten.