Airtasker Ltd

Saville Capital Emerging Companies Fund recently initiated a position in Airtasker Ltd (ART) following the divestment of Ansarada. Established in 2011, Airtasker offers a marketplace for local tasks and has recorded significant user engagement, with over 1.3 million unique paying customers and more than 180,000 taskers. Despite its initial IPO success, the stock faced a substantial de-rating, hitting a low of approximately $0.17 in October 2023. However, Airtasker's recent cost-reduction measures and strategic focus on efficient scaling have led to profitability and positive cash flow in 1H FY24. The fund manager highlights the impressive growth potential in Airtasker’s UK market, particularly following a substantial media-for-equity partnership with Channel 4, which is anticipated to facilitate rapid scaling. With solid margins and a strong balance sheet, combined with a recovering Australian business, Saville Capital believes that Airtasker's upcoming performance in both markets could drive a resurgence in its stock value, potentially revisiting its IPO price.

Saville Capital Emerging Companies Fund updates its investment thesis on Airtasker Ltd (ART, 0%) following the announcement of a $6 million media partnership with oOh!media Limited (OML) aimed at enhancing brand awareness across Australia. This strategic initiative allows Airtasker to leverage OML’s extensive network of over 35,000 outdoor sites, promoting capital efficiency. The terms include a two-year $5 million convertible note at a 5.8% coupon rate, with a conversion option at maturity for a discount to the share price. Despite Airtasker’s solid brand recognition and a cash balance of approximately $20 million, growth has recently stalled due to decreased marketing efforts. The fund views this partnership positively as it allows Airtasker to maintain its cash reserves, potentially for strategic acquisitions, and alleviates the need for costly equity financing to cover operating losses while simultaneously reactivating marketing initiatives.

Saville Capital Emerging Companies Fund updates its investment thesis on Airtasker Ltd, noting a robust finish to FY24 with a 76.3% revenue growth in the UK, driven by the company's advertising campaign with Channel 4. While GMV growth in Australia has been modest, optimism surrounds upcoming marketing deals with ARN and OML set to begin in September, which are anticipated to enhance performance in FY25. The fund also sees potential for increased monetisation rates as Airtasker implements changes aimed at improving this crucial metric, reinforcing the belief in the company’s growth trajectory.

Saville Capital Emerging Companies Fund updates its investment thesis on Airtasker Ltd following the announcement of significant capital raises through strategic media partnerships. Airtasker USA has secured US$9.75 million in funding from prominent companies iHeartMedia and TelevisaUnivision. These partnerships are expected to enhance Airtasker's brand awareness in the U.S. market by tapping into expansive audiences—276 million monthly listeners through iHeart and 100 million daily users via TelevisaUnivision. The collaboration with iHeart will provide US$5 million in advertising inventory in exchange for a convertible note, while the partnership with TelevisaUnivision involves a 17.1% equity stake for US$4.75 million in advertising inventory. The fund considers these deals strategically and financially advantageous, fostering relationships with influential U.S. media entities that have vested interests in the success of Airtasker's advertising initiatives, all while preserving cash and minimizing dilution of equity in what they perceive to be an undervalued stock.

Saville Capital Emerging Companies Fund has updated its investment thesis on Airtasker Ltd, highlighting the company's strong performance with a 13.6% increase in marketplace revenue quarter-over-quarter, prominently driven by a remarkable 104.4% growth in the UK. This growth follows the effective implementation of targeted media strategies and has resulted in positive free cash flow, even as Airtasker strategically reinvests its Australian profits into expanding markets in the UK and US while maintaining a robust net cash position. With the Australian marketplace experiencing seasonal peaks in the next quarters, coupled with increased marketing investments across its key markets, Airtasker is positioned to sustain its revenue momentum. The fund believes the market is currently undervaluing Airtasker, viewing it as ex-growth, while the recent media partnerships are expected to enhance growth rates across all markets, attracting greater investor interest in the coming quarters.

Saville Capital Emerging Companies Fund updates its investment thesis on Airtasker Ltd, following the announcement that Airtasker USA Inc secured US$12 million in media capital through a partnership with Sinclair Broadcast Group. This collaboration opens avenues for enhanced brand promotion across Sinclair’s extensive network of 185 television stations and digital platforms in the U.S. Additionally, Airtasker UK Ltd obtained a follow-on investment of £4 million from Channel Four Television Corporation, building on an earlier £3.5 million investment. Collectively, these media capital deals contribute to a total of A$51.6 million raised in 2024, reflecting significant new funding for the company. The fund believes that the market has yet to fully recognize the optionality and potential upside these media agreements provide, allowing Airtasker to evaluate their impact before determining the most favorable funding approaches.

Saville Capital Emerging Companies Fund continues to hold Airtasker Ltd (ART) due to its accelerating revenue growth and positive momentum in its marketplaces. In 2Q FY25, ART’s revenue grew by 11.4% compared to the previous corresponding period, with Airtasker marketplaces revenue rising by 15.8%. The Australian marketplace saw a welcome return to double-digit growth, while the UK and US experienced impressive increases of 95.2% and 278.6%, respectively. This growth is driven by strong consumer demand and improved market reliability, evidenced by a 10.9% increase in booked tasks and a reduction in cancellations. ART is also generating positive free cash flow and has increased its cash balance to $18.3 million, thanks in part to its strategic media deals funding brand marketing initiatives. While these efforts are expected to provide long-term benefits, the fund acknowledges that the payback period for brand awareness initiatives typically takes longer compared to performance marketing. With strong revenue growth, cash flow generation, and a healthy cash balance, Saville Capital Emerging Companies Fund remains optimistic about ART’s continued progress.

Saville Capital Emerging Companies Fund continues to hold Airtasker Ltd (ART) despite the recent pressure on its share price. While ART’s share price has declined sharply, the company has reported solid revenue and cash flow results, and remains cash flow positive. The fund notes that the dip in EBITDA for 1H FY25 was well-flagged, as ART focuses on leveraging the advertising inventory acquired through recent media deals. This strategy, which impacts the company's financials in a non-cash manner, is expected to boost top-line growth by increasing brand awareness and customer engagement across its target markets. Despite the temporary share price pressure driven by aggressive selling, the fund remains optimistic that these strategic investments will lead to long-term growth and value creation for ART.