In May 2024 on the announcement of integration issues with Pauls Camper & my first buy I said:

“We will see how things go from here – worst case this is a decent into a hell of downgrades from European issues, but they are well cashed to endure some pain. Best case, it returns to growth and it’s operating leverage kicks off.”

So far it’s been the worst case and the price is 66% down on my buy, which is actually not bad compared to begin down 80% on what it traded at most of the time prior to my buy and down 90% from all time highs… Things could have been worse, they remain cashed up  – but are they going to get better?

H1 FY26 has seen the company generate $11.5m in FCF having a healthy A$23.2m cash balance without debt at 31 December 2025 which is a large portion of the A$36m market cap. For comparison receipts of $57.2m and payments of -$45.7m in H1 FY26 compare to PcP receipts of $63.8m and payments of -$65.6m. Receipts are down 10% but payments down 30%, we will have to wait for the half year accounts to see if this is just a working capital shift or a pleasant surprise of a large drop in costs, the revenue receipts look normal and aligned to sales.

GTV and revenue looks to be down around 7% in H1 Vs PcP based on Q1 and Q2 Appendix 4C, so sales are going in the wrong direction. The exit of the van sales business may explain some of this, but clearly we are not seeing a turn around post resolution of integration issues with Pauls Camper yet.

CHL is a negative working capital business (received money for revenue before it pays the cost of that revenue), which is fantastic and why it hasn’t had to raise capital since FY23 and most of the share count increase was equity purchase of Pauls Camper (which was done when the share price was 4x current levels). However it finished FY25 with -$9.1m in net tangible assets which were almost all cash related (receivables, fees in advance and payables), so it is being funded by negative working capital which works when your making losses only if you are growing. Sales are not growing so they are going to have to cut costs to make a profit or raise capital. It maybe a while, it’s hard to tell but it’s not sustainable.

We have been told that the platform integration issues are now sorted with Pauls Camper and full year impact of $4.6m of annualised operating cost savings from FY25. Plus margin improvement from the MyWay insurance product and yet to be seen growth in European markets.

Management have been over enthusiastic about the resolution of problems in the past, so they don’t get any points until we see the results. The business model is a great one, capital light a two-sided market place and positive working capital, execution since the acquisition of Pauls Camper has been terrible. 

If they have turned things around and get things right from here, a mini-REA or CAR is a possibility. With a modest growth and cutting out costs (improve efficiency) CHL could become a money printer, positive EBITDA for FY26 is the outlook – we will see.

Holding on the strength of the business model not management currently, hoping it’s just a victim of an M&A f-up which is now in the past.

A week after the Migration Issue smashed the price by 25%, we have an investor day presentation (Media & Press Releases – Camplify Holdings Limited (ASX: CHL)) with a Q3 update that in combination with some recoveries earlier in the week has brought the price back to close to what it was prior to the Migration Issue.

I am not sure how I feel about how they handled this “confession season like” announcement in the lead up to the presentation day. I suspect they would have been criticised for delaying material information to the presentation day if they new before, but providing the information from the presentation day at the same time would have resulted in less of a sharp drop…

I should be glad for being able to pick up shares at a discount (not the bottom but better than I had hoped). The flagged issue of it just not adding up (sales fall more than 2 months of additional issues) is still not fully settled, but booking requests have recovered well, so permanent damage seems limited.

In particular I was concerned that we would see a drop in the group fleet of RV’s on the platform which is the income base. However Q3 fleet was 31,215 which is up 6% on 29,388 which is good, but there is no split out between PaulCamper and CHL, so a drop in PaulCamper may have been covered by a lift in CHL – net net it doesn’t look at this point that the damage is crippling and the thesis of long term growth and value through scale is intact.

It's interesting to see them publish consensus number in place of guidance. Presumably if they expect to be materially off consensus they will be compelled to update the market. These numbers don’t include MyWay impact is not included… is this the PaulCamper platform f-up or the potential of additional take rate from the MyWay product – I am not sure, if anyone knows please share.

Well taking the management at their word it seems things are ok with a bit of a hiccup now swallowed and it’s onwards and upwards.

Disc: I own in RL

Announcement today has sent the share price down 15% (11:30am) as the company called out technical issues in it’s migration of PaulCamper onto the Camplify platform.

Expected sales impact for FY24 is a material reduction of $3.5-4m from disruption over the migration which completed at the end of April. The company expects normal trade in the PaulCamper markets by June FY24 and to allow a clean FY25 to use the changes to rollout additional products and they expect FY25 to have $3-4m in efficiency savings from the changes.

I have used the chance to finally buy CHL, my view is the price was already pushed down by lower sales growth expectations in Europe after the H1 result, adding to concerns about Apollo’s exit from the share register and results last week that point to a week industry.

The Apollo factors I see as not materially relevant and a slow growth year as they bed down the PaulCamper integration and set the base to scale is also over discounted. So as unwelcome as todays announcement is, I see it as a temporary hitch and an opportunity to buy at a doubly discounted price.

I have not quite finished my valuation work, but enough to be satisfied with the price and was concerned I had missed a chance when the price rebounded on Monday following the Apollo result last week. However a recent listening to One Up On Wallstreet (Peter Lynch) made me aware of the “Monday” effect for small caps that “retail investors” dabble in. Namely they mostly do their research on the weekend and put in a buy order on Monday. So Mondays are usually one of or the best day for a small cap – CHL exibits this effect. So I held my order at a lower price that triggered this morning.

We will see how things go from here – worst case this is a decent into a hell of downgrades from European issues, but they are well cashed to endure some pain. Best case, it returns to growth and it’s operating leverage kicks off.

Disc: I now own in RL