Pureprofile Ltd: Strong Start to FY22 with July up 50%, Valuation Upgrade
Pureprofile Ltd
Strong start to FY22 with July up 50%, valuation upgrade
Pureprofile Ltd 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. The company has an established position with delivering insights to clients across 89 countries and has captured through its panel fully declared, deep consumer profiles, first-party data and insights. Pureprofile has reported a 24% increase in audited FY21 sales revenues to $30.0m and FY21 EBITDA of $3.14m, which exceeded its guidance and grew 124% on the previous corresponding period. Net operating cashflow for the year grew 65% to $2.4m. Reported NPAT for FY21 was $2.81m and included $6.17m in net non-recurring/non-cash items. Pureprofile also noted that it had started FY22 strongly with July revenue up 50% to $3.1m on the pcp. Within this Data & Insights APAC lifted 41% to $1.6m, Data & Insights UK/EU grew 27% to $0.7m and the SaaS platform revenue jumped 207% on the pcp to $0.3m. We have upgraded our forecasts to reflect the strong start to FY22 and have rolled the model for the new financial year, resulting in our base case DCF valuation increasing to $0.064/share (previously $0.053/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 end to FY21, FY22 starts well, earnings fcsts upgraded
PPL has reported FY21 sales revenues of $30.0m and underlying EBITDA of $3.14m in line with its announced results with its Q4 result in late July. The company noted that it has had a strong start to FY22 with July revenues of $3.1m, up 50% on July 2020 and exceeding its expectations. Pureprofile noted that growth in new markets and existing customer activity had driven this growth. Data & Insights Asia Pacific revenues increased 41% to $1.6m in July against the same period in FY21 while Data & Insights UK/EU revenues increased 27% to $0.7m versus the pcp. The group’s SaaS Platform revenue jumped 207% in July to $0.3m. We note the strong start to FY22 and have upgraded our revenue forecasts by 5% to $37.7m.
Base case DCF valuation of $0.064/share (previously $0.053)
We use the discounted cashflow methodology to value Pureprofile using a WACC of 14.5% (beta 2.0, terminal growth rate of 2.2%) and this derives an equity value of $68.0m or $0.064/share (previously $0.053/share). Our terminal value is $0.033/share within this valuation. As a sense check, this implies an FY22 EV/Sales multiple of 1.78x (based on our forecasts) which is still below the group of comparable domestic peers that we have identified. On the current share price of $0.03/share, PPL is trading at 60% discount to the median multiple of its peers. In our view, continued demonstration of strong revenue growth and a sustainable return to profitability should underpin Pureprofile’s share price in the near term.
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