Amaysim Sheds 2018 Gains as Share Price Drops

Amaysim Australia’s Ltd [ASX:AYS] strong 2018 performance came to an end today as its stock fell 17% to $1.85, after opening at $2.15. Beginning the year at $1.98, Amaysim had made good gains until today’s hiccup. 

The result comes as a bit of a surprise as a trading update released by Amaysim today confirmed the company’s ongoing growth and all-round strong performance.

Subscribers to the company’s mobile service were up 10% to 1.127 million, while its energy market has grown by 18% to 185,000 since buying out Click energy in May 2017.

This growth contributed to projected statutory net revenue of around $292–$294 million (up from $136.6 million in the previous corresponding period), and underlying EBITDA (Earnings before interest, taxes, depreciation, and amortisation) of approximately $17–$18 million (up from $17.3 million in the previous corresponding period).

These figures do not take into account an added $6 million receivable that relates to the first half. Including this amount would take the firm’s underlying EBITDA to $23–$24 million.

Why did Amaysims shares drop?

One reason for Amaysim’s unexpected share price dip could be that the market expected even better figures than those released in today’s trading update.

Amaysim’s mobile net revenue (apart from devices), was down 7% via reduced mobile average revenue per user (ARPU).

While the firm’s subscriber base grew, Amaysim deliberately targeted the sub-$20 market, which could explain the lower ARPU. Basically more subscribers, but with many of them opting for cheaper plans.

Amaysim attributes the growth of mobile subscribers on two marketing campaigns launched in October 2017, which attracted new customers to the company’s lower-priced plans.

Some of this growth has carried over into Amaysim’s broadband and energy services, with around 40% of NBN subscribers having an existing relationship with the brand.

Amaysim’s Chief Executive Officer and Managing Director, Julian Ogrin believes that the firm’s mobile platform is the best tool for expanding its overall subscriber base and driving sales across all areas. In today’s trading update he said:

We are using amaysim’s highly competitive mobile products to bring in new subscribers and we will market our higher ARPU energy and broadband plans to them. The growth in mobile subscriptions remains at the heart of our cross-sell strategy, as this is the most efficient channel for acquiring new subscribers, who have a lower cost-per-acquisition when compared to energy and broadband.’

Amaysim will release finalised 2018 first half financial year results on 26 February 2018, but those looking to take advantage of the firm’s lower share price might not want to wait that long.

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Kris Sayce,
Publisher, Markets & Money


Markets & Money is unlike any other finance newsletter. Our mission is to look at the world of investments and finance in a sceptical and contrarian way. Our editorial team looks beyond the headlines and obvious explanations to bring you what we think is really moving the market. More importantly, we’re trying to show you where the next big opportunities and where the big risks are that you might not be aware of. In Markets & Money you’ll read about the state of the Australian housing market, the future of the commodity boom, China’s rise to an economic superpower, the fate of the US dollar, and of course a whole lot more.

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