ChimpChange (AX:CCA) is poised to deliver substantial revenue growth in FY17 and FY18 based on consensus estimates. Monthly client additions have been running 9% above the company’s target since September 2016. Card activity rates doubled from 7.8% in February 2016 to 15.6% by September (Q1) and November data suggest further expansion.
Ultimately, activity generates transaction volume and revenue and these positive trends augur well for the future. Consensus expects revenues to grow tenfold in FY17 and nearly sixfold in FY18. CCA trades on a FY18e P/E of 28x, which looks undemanding given its early stage of development. December and Q2 figures are expected later this month.
New clients ahead of target, rising activity rates
CCA announced November 2016 client metrics early last month. New customer additions totalled 7,700, up 10% m-o-m, bringing total new clients to 20,500 since September. CCA is targeting 25,000 new clients by December, implying it is running 9% ahead of target based on 6,250 clients per month on average.
More importantly, total transaction volume (TTV) of deposit loads and card swipes is accelerating ahead of customer numbers. TTV grew 21% and 32% m-o-m in October and November respectively, indicating that customer activity rates are continuing to expand in Q2 even though card activity rates for instance already doubled from 7.8% in February 2016 to 15.6% by the end of Q1.
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