Pureprofile Ltd: H1 Revenues up 44% to $20.8m, Ahead of RaaS’ Forecasts
Pureprofile Ltd
H1 revenues up 44% to $20.8m, ahead of RaaS’ forecasts
Pureprofile Ltd (ASX:PPL) is a data analytics, consumer insights and media company underpinned by proprietary technology, servicing business decision makers in brands and media companies as well as market researchers. Pureprofile has reported a 44% increase in H1 FY22 sales revenues to $20.8m driven by continued strong growth in the seasonally-biggest second quarter. Q2 FY22 revenues increased 31% to $10.6m and EBITDA for the quarter was $1.4m, an increase of 82% on pcp. H1 FY22 EBITDA was $2.5m and the EBITDA margin expanded to 12% from 9% in H1 FY21. Net operating cashflow for the quarter was $0.86m driven by a 54% increase in cash receipts to $11.2m. PPL ended the period with net cash of $1.7m. The result was well ahead of our forecasts and demonstrates the momentum PPL is experiencing as it executes its growth strategy. Revenues from the Data & Insights and SaaS platform beat our forecasts respectively delivering growth of 33% and 339%. Pure.amplify grew H1 revenues by 46% but revenues of $3.5m were just below our forecast. The company has flagged it will give full FY guidance at its interim results next month. We will wait for the audited half-year result to adjust our forecasts. Our DCF-derived valuation remains at $0.09/share fully diluted for in-the-money options and performance shares. On the current share count, our base-case valuation is $0.10/share.
Business model
Pureprofile generates its revenue from providing data analytics and consumer insights derived from its actively managed panels of digital members accessed through its proprietary technology platform. Pureprofile also has a media arm which executes advertising campaigns for clients. In a world where privacy is increasingly valued, consumer insights and profiles generated through online panels allow businesses to gain the ability to segment, target and engage with their audiences without consumer privacy issues. In exchange, consumers are directly financially rewarded for their information and responses, and indirectly through more relevant content and personalised experiences.
Strong margin expansion, results reflect growth strategy
PPL has reported Q2 FY22 sales revenue of $10.6m and underlying EBITDA of $1.4m, respectively up 31% and 82% on the previous corresponding period (pcp), and continuing the growth momentum demonstrated in Q1. On an unaudited half-year basis, revenue increased 44% to $20.8m, EBITDA by 53% to $2.5m and net operating cashflow by 829% to $1.6m. Excluding Jobkeeper and COVID-related savings, H1 EBITDA increased 147%. PPL’s EBITDA margin increased to 12.0% in the half, versus 9.3% in H1 FY21 and 5.2% in H1 FY20, reflecting the company’s stated aim to lift EBITDA margins to ~40% within its three-year growth strategy. The result was ahead of our revenue, EBITDA and operating cashflow forecasts for Q2 FY22 and puts the company in good stead to exceed our full-year forecasts. We will address our forecasts following the release of the audited interim results in late February.
Base-case DCF valuation of $0.09/share fully diluted
We use the discounted cashflow methodology to value PPL and arrive at a fully diluted DCF of $0.09/share, based on a WACC of 12.3% (beta 1.6, terminal growth rate 2.2%). Our terminal value is $0.05/share within our $0.09/share valuation. On the current share count, our base-case valuation is $0.10/share. In our view, continued demonstration of strong revenue growth and a sustained return to profitability should underpin PPL’s share price in the near term.
- Unlock research summaries
- Follow top, independent analysts
- Receive personalised alerts
- Access Analytics, Events and more
Join 55,000+ investors, including top global asset managers overseeing $13+ trillion.
Upgrade later to our paid plans for full-access.
- Loading...