SEVEN years after Justin Hales' inability to find a caravan for holiday hire inspired him to create a digital platform that links caravan owners to potential van hirers, his start-up Camplify is poised to list on the Australian Stock Exchange.
Having buckled down during an operational standstill in COVID-19 lockdowns at home and abroad, Mr Hales and Camplify co-founder Josh Fischer say they want their "high-growth" company to be the number one player domestically and overseas, currently in the UK, New Zealand and Spain.
If Mr Hales needs a reminder that demand for his product is there, he only has to review his own situation.
"I have two vans and I haven't been able to use them because they are so heavily booked - one is in Tasmania, I left it with a mate with the idea of going down there regularly but I can't access it. It's unbelievable," the 40-year-old says with a laugh.
According to its prospectus, Camplify is seeking to raise $11.5 million via the issuing of 8.1 million shares with an issue price of $1.42, bringing a market capitalisation of $58 million upon listing. Camplify has about 5400 vans and those in the Hunter and Newcastle make up about 8 per cent of its national fleet. Just over 40 per cent of its current shareholders are from Newcastle.
Mr Hales says the decision to move to an initial public offering (IPO) was influenced by similar moves of other tech companies.
"There a number including Air Tasker and Mad Paws that were going through the IPO process and we started thinking of our next move," he says. "It got our attention to look at it sooner than later and we were also buoyed on the back of one of the biggest growth periods that domestic tourism and most probably caravanning and camping had probably seen in my life time. It seemed like the right time."
Growth was also a factor: the company's revenue has grown by 77 per cent last financial year and is forecast to grow by 132% this financial year.
As reported by the Financial Review, Camplify revenue is projected to rise from $2.9 million in 2019-20 to $6.7 million in 2020-21. On a statutory accounts basis, the company is making losses still - it is forecast to make a loss of $2.9 million on an earnings before interest and tax basis in 2020-21, compared with an EBIT loss of $2.4 million a year earlier.
"We are a high growth company, we had some months of profitability this and last financial year, when, due to the pandemic, we decided to slow our growth and we focused on stability," Mr Hales says.
"The direction of the business is growth and when we are focused on growth we are going to have higher costs."
Camplify's IPO follows three separate capital raises by it since Mr Hales registered the company in 2014. His startup idea came after he struggled to find a caravan for hire while simultaneous noticing a glut of unused vans lining the streets of his Newcastle neighbourhood.
He took his caravan-share idea to the first intake of Hunter-founded business accelerator Slingshot, receiving mentorship as he developed the software for his peer-to-peer digital platform. Four months into this process, he met Mr Fischer, the company's chief operations officer.
Mr Hales, who gave up a high-flying customer liaison role at mining tech company QMastor for the entrepreneurial life, says Camplify has, since inception, focused on the customer. He believes that is one of the company's strengths.
"Two things that we stand for ... is empowering our users and simplicity, to have a system that makes life easier," he says.
Camplify launched in the United Kingdom in 2017 and in New Zealand in 2019. It had just launched in Spain in early 2020 when the pandemic emerged.
"We were well positioned to take advantage of the spring/summer there, then we never really got going. Now we are just seeing the market to start to recover and to see a lot of traffic and interest," Mr Hales says.
"The UK has obviously been through a horrible time with their extended lockdown period and that has affected our ability to trade when people can't go on holidays or move around, and from May last year to April this year we did not see trade at all.
"But there are lots of green shoots in the UK at the moment and we can see that the market will recover well and we are seeing positivity in terms of people who want to take a holiday, and we saw that pattern at the backend of the GFC in 2008."
In Australia, COVID-19 brought a rocky three months for the company.
"We were not trading and in negative as we were helping to refund customers who couldn't take holidays and many of our staff took pay cuts but continued to work because they believed in us, and customers knew we'd turn it around in the long-run," Hales says, adding JobKeeper had assisted.
Witnessing the cancellation hiccups in the travel industry, Camplify began a credit system that allowed customers to change bookings. Most decided to re-book rather than cancel.
Every time there is a regional lockdown, we've seen an uplift in bookings. People at home are saying 'That's it, as soon as it's over, let's go away'.
Justin Hales
"That has helped us into the period we have now with the Melbourne lockdown, that flexibility," Mr Hales says. "Interestingly, other than the first lockdown, every time there is a regional lockdown, for example the northern beaches, we've seen an uplift in bookings. People at home are saying 'That's it, as soon as it's over let's go away'."
Camplify will soon shift from its city office to a leased warehouse in Wickham it will soon spend about $400,000 to update.
Raised in Kurri Kurri in a family of teachers, Mr Hales says the company's decision to remain based in Newcastle is deliberate.
"In the past, people would ask us, 'Will you move to Sydney, why are you in Newcastle?' and I think the world has now understood, particularly in Australia, that regional locations like Newcastle have a hell of a lot going for them when you are running businesses," he says.
"From a general culture perspective it's a great place to be for us. We've also brought a lot of people into Newcastle from outside the region and country ... We have some amazing people we've been able to attract to the business because we are a fast growing tourism company based in Newcastle."
Mr Fischer, who worked in senior managerial roles at Nestle, Arnott's and Goodman Fielder domesticall and abroad before moving to Camplify, maintains that there's nothing like a "great Aussie road trip" and caravanning holidays "hold a special place" in our hearts.
"From the planning and preparation, unexpected places and delicious snacks you might discover along the way, to the sense of achievement and excitement as you pull up at your destination - it's all an adventure," he says.
"Having grown up camping myself, I've always aspired to be able to share this experience with my wife and our two daughters."
Mr Fischer says Camplify is making caravanning holidays accessible to everyone with the choice of its vans, and agrees with Mr Hales that the customer focus remains paramount.
"From building a bespoke comprehensive insurance solution for our van owners in the early days to constantly listening and improving our product to provide our community with all the tools they need to grow their hiring businesses with us," he says.
Mr Hales says he hasn't had time to reflect on the moment he rings the ASX bell, but he cites a few milestones - winning industry entrepreneur awards and driving a campervan through the hills of Spain prior to the company's launch there - as being memorable.
The last 18 months, he says, have given him new perspective of where he, his business and family should be.
"Going through the whole COVID-19 situation has made me take a breath, not react to it, just pause and think what we need to do," he says.
"More than ever I feel very responsible for the team I have built and I've wanted to make sure I provide a good example and leadership. Over the years we've employed a lot of people through the government's long-term unemployed program and built pathways and careers for them and for me personally that has been something I have enjoyed - watching them grow."
He remains grateful to those close to him for their support in the past year.
"I'm good friends with Kurt Fearnley and I remember him ringing during lockdown and saying 'Are you OK?' ... I really value who I have around me, and my wife [Sarah] has been a really great source of strength during that."
