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MyHotelMatch

CR
Bloomberg   MHM FP
Travel Services  /  France  Web Site   |   Investors Relation
Préparation du lancement de l'application de Matching
Target
Upside 671%
Price (€) 0.81
Market Cap (€M) 4.66
Perf. 1W: 7.72%
Perf. 1M: 13.4%
Perf. 3M: -6.83%
Perf Ytd: -14.3%
10 day relative perf. to stoxx600: 2.64%
20 day relative perf. to stoxx600: 18.7%
Earnings/sales releases27/02/2024

Preliminary results for 2023. The App is moving forward.

MHM has given an update on the development of its Matching application. It has also published preliminary results for 2023 in line with our estimates.


Fact

  • MyAgency, the Concierge segment of MHM (MyAgency), will have generated €12m in revenue over 2023 and c€0.7m in EBIT.
  • Work on the Matching application continues with successive upgrades.
  • MHM expects to be ready by the end of 2024 to welcome an acceleration in revenues from the App in 2025.

Analysis

MyAgency

MyAgency’s revenues were down at €12m compared with €13m in 2022 (of which €7.8m consolidated in 2022 given the date of integration). After very strong growth of 37% in H1 23 driven by buoyant tourism in Europe and France, business declined by around 35% in H2 23, mainly due to events in the Middle East, which prompted customers to cancel their end-of-year holidays. Prior to these events, MyAgency was expecting strong growth in H2 23. The second half of the year is traditionally important for MyAgency’s business.

This resulted in revenue of €12m for the full year 2023, compared with the €13.8m forecast, which transparently reflected a decline in revenue of just 11% in H2 23.

However, the impact on the profitability of this business remained limited, with 2023 EBIT at around €0.7m (c.€0.3m in H1 23), compared with the €0.6m EBIT we had been expecting thanks to highly effective cost control and a positive pricing effect. Note that the EBIT in this segment was c.€0.6m in 2022 and H1 23 recorded a performance of c.€0.4m better than in the H1 22. A portion of the lead taken in H1 23 was therefore given back, but this division remains profitable.

MHM does not provide more detailed profitability metrics or guidance for 2024. The audited accounts will be published in April.

The above figures should be understood as the profitability of the MyAgency division. To arrive at the consolidated result, it will be necessary to deduct the costs of developing the application (c.€1m in 2023) and miscellaneous items, which weighed in at €1m in 2022, for example.

Matching application

The commercial launch took place at the end of 2023 after 18 months of development. The application can be downloaded and is operational. MHM is continuing to make improvements to make the application more effective and provide it with the optimum conditions for wider deployment. This roll-out will remain dependent on a significant viral effect, in our opinion.

The investment made in 2023 was in the region of €1m, i.e. lower than our estimates already revised last year. At consolidated level, the cash burn is therefore under control and remains largely financed by the profitability of the MyAgency business. MHM has also indicated that 40% of this investment can be recouped via the French Research Tax Credit (tax refund).

The roadmap is for a significant acceleration for this product by 2024, with a number of upgrades that should raise the product’s quality standard to a level in line with customer expectations. This is a prerequisite for more sustained commercial development. For the moment, the number of downloads recorded since the launch only represents the results of a “test+” phase. The number of hotels referenced in the application, i.e. 800 units, will be increased to almost 2,000 in the next few days. The products will therefore soon be fully off the shelf, and MHM indicates that the application as a whole will reach full maturity by the end of 2024.

Our current estimates reflect: i/ a business volume of €1.4m in 2024, before accelerating in 2025 and ii/ a breakeven point that is unlikely to be reached before 2027 for this business line. These estimates are dependent on the critical milestone of 2025 being reached, with a download rate for the application that is sufficient to generate much higher revenues.

Financing

To tackle a $128bn market (luxury travel), MHM can count in the short term on its own resources (EBIT MyAgency) and the benefit of the Research Tax Credit. The press release does not provide any balance sheet information at this stage. There are still €8m in warrants that can be exercised between now and the end of 2024. These warrants are currently very much out of the money. Their exercise would have a highly accretive impact on MHM’s current share price.


Impact

The 2023 financial year was in line with our expectations for MyAgency’s profitability, and does not require any changes to our estimates. The consolidated financial statements will be published in April.

Our estimates continue to reflect a substantial marketing budget for 2023-25. It appears that the related expenditure was virtually nil in 2023 and should remain low in 2024, which should enable the Group to report a net loss well below our expectation for 2023-24 (current expectation of an accrued €10m before tax and minority interests). The marketing budget that will accompany the acceleration of the commercialisation of the application in 2025 has not been specified at this stage.

MHM continues to move forward and is rolling out its roadmap. We can now assume that 2025 will be the decisive year for its application. In 2024, the Group’s balance sheet should remain under control, thanks in particular to the support of its reference shareholder, Mr Ott.


Updates

27 Feb 24 Earnings/sales releases
Preliminary results for 2023. The App is moving...

04 Oct 23 Earnings/sales releases
Strong growth in H1 23, imminent launch of the...

13 Jun 23 Earnings/sales releases
MHM will use AI

21 Feb 23 Earnings/sales releases
Successful restart of MyAgency achieved

15 Nov 22 Earnings/sales releases
A good performance from My Agency in H1 22

14 Aug 22 Other news/comments
Taking into account the share consolidation.

11 Nov 21 Opinion change
Reprise prochaine des acquisitions

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