Rent.com.au Ltd - Second Consecutive Year of Positive EBITDA from Search

Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through their rental profile, rental bond and payments, and through a growing number of aligned transactional services. The company has announced record FY22 revenues of $3.37m, an increase of 9.0% on the previous corresponding period (pcp) and in-line with our forecasts. The EBITDA loss for the year was $1.60m, up from FY21’s EBITDA loss of $0.69m due to the $1.8m investment in the RentPay platform. The loss was largely in line with our forecast for a $1.56m EBITDA loss. The core Rent.com.au delivered positive EBITDA of $0.22m, its second consecutive year of positive EBITDA, and a 90% increase on the EBITDA delivered in FY21. The company ended FY22 with $2.23m in net cash. The RentPay platform had 3,147 active customers at the end of July transacting payments and the platform is now handling more than $1.25m in rental payments a week (up from $1m a week reported at its Q4). The company expects RentPay to make a meaningful revenue contribution in FY23 and new branding, content and a product refresh for the core rent.com.au search platform is scheduled for this half and expected to underpin continued positive performance. In our view, Rent.com.au is well positioned to leverage its investment in both RentPay and its renter products in FY23, particularly in light of the recently-announced Origin Energy Ltd (ASX:ORG) strategic partnership. We have made some adjustments to our FY23 forecasts, chiefly revenue projections from RentPay for the year, and our valuation is maintained at $0.23/share, which is predicated on RentPay securing 5% of renters on its platform by FY24 and 20% on the platform by FY30.