ASX:CHL
Camplify Holdings Ltd
Investment Summary
The fund managers believe Camplify Holdings Ltd (CHL) has a compelling core business model with strong underlying financial metrics, particularly in its established markets of Australia and New Zealand. In their opinion, the company has demonstrated impressive growth, with significant increases in gross transaction value, revenue, gross margins, and total bookings. They highlight the successful integration of the PaulCamper business into Camplify’s unified OnePlatform as a strategic milestone, enabling the company to operate more efficiently across global markets. This integration is expected to drive higher take rates and booking volumes, as well as support the rollout of key products and services such as Premium Membership and the Myway insurance division. However, the fund managers also express concerns regarding recent setbacks in the PaulCamper integration process, which led to a material reassessment of the investment. While they acknowledge the potential for upside if execution improves, they are cautious due to the historical risks associated with large acquisitions disrupting otherwise sound businesses. In their view, while Camplify remains a structurally interesting and innovative business with strong long-term potential, the integration challenges have introduced uncertainty. As a result, they have chosen to exit their position for now, preferring to monitor the company’s progress from the sidelines.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Manager
Saville Capital
Date
28 Feb 2024
Price
$2.25
Medium
Monthly Report
Commentary
Saville Capital Emerging Companies Fund continues to hold Camplify Holdings Ltd (CHL) due to its strong growth and strategic initiatives, despite some short-term market volatility. CHL reported impressive growth in 1H FY24, with Gross Transaction Value (GTV) and revenue up 93.6% and 95.4%, respectively. Gross margins also increased from 58.1% to 61.4%, reflecting operational improvements. While the company posted a modest EBITDA loss of $1.4 million, this was mainly due to seasonal factors, with 1H typically being a weaker period for revenue. The integration of PaulCamper into CHL’s global OnePlatform is a key development, enabling operational efficiencies, standardized technology, and the rollout of products like Premium Membership and AER in new markets, which will enhance revenue potential. CHL’s focus on expanding its MGA Myway division and recent acquisition of the “Rent a Tent” business also positions it well for future growth. While CHL’s share price experienced short-term fluctuations, Saville Capital remains optimistic about the company’s long-term potential, given its strong market position and growth trajectory.
Saville Capital
Date
31 May 2024
Price
$1.45
Medium
Monthly Report
Commentary
Saville Capital Emerging Companies Fund sold their investment in Camplify (CHL) following a disappointing update on the integration of its PaulCamper business. Although the fund remains attracted to the core business's model and financial metrics in Australia and New Zealand, there are concerns that the acquisition may negatively impact these strengths. The integration issues could potentially be temporary, and there is significant upside if management can successfully navigate their plans. However, given past experiences with major acquisitions leading to ongoing challenges for other businesses, the fund opted to step back for now rather than remain actively involved in the situation.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.