Jayride : Quarterly Business Review Call Transcript

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ASX Announcement

29th July 2022

Quarterly Business Review Call Transcript

Jayride Group Limited (ASX:JAY) ("Jayride" or the "Company") the world leading global travel marketplace for airport transfers today releases the transcript of the Quarterly Business Review and Appendix 4C Presentation held on 28th July 2022 at 2.30pm AEST.

Start of transcript

Rod Bishop (Jayride Group Managing Director): Good afternoon and welcome Jayride is pleased to present a record quarter four, showing our company as fundamentally improved and more proftable and delivering on major milestones.

Today I'm delighted to say that we have delivered our frst quarter that has cash fow positive after stand-still operating costs, the delivery of a major milestone with $500,000 of positive cash fow after stand-still costs in Q4, that's an improvement of $691,000 from Q3.

Cash receipts from customers that grew to $1.37 million. That's a return to pre-pandemicall-time high, up 148% versus Q3.

We have contribution proft that grew to $566,000 in the quarter, up 86% since last quarter, up 260% since the previous corresponding period. That is a record high contribution proft, far above any pre-pandemic period, and the largest contribution

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proft growth on record up $262,000 since last quarter.

Net revenues that grew to $1.09 million in the quarter, that's up at 86% since last quarter, up 213% since the previous corresponding period, and the largest revenue growth on record up $506,000 since last quarter.

A great and record quarter four. Good afternoon, and thanks for coming.

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If there's just one message that I'd like investors to take away from the call it's this:

Whereas the macro environment is complex to anticipate, and we acknowledge that, by contrast, Jayride is very simple at the moment. For Jayride for two years, we invested for growth. So that we would be ready to grow today, now that travel has resumed. And so we're growing now.

We anticipated that this growth would bring operating leverage, proftability, and cash fows. We're pleased to report that it is doing so. And, we said that we would deliver major milestones along the way with this growth and encouragingly we've now delivered two of those.

And so we're here with these results today, still at an early stage in a long-term growth trajectory, still with more growth ahead.

It's not a one-of spike. That we have returned to peak levels of cash receipts and that we're back here with a much lower cost base. Or that in an industry with credit problems overall, our cash conversion has improved. In a quarter with revenue and receipts scaled up, our non-variable costs actually reduced. And that we've introduced new and expanded traveler ofers, with strategies like that to scale revenues and revenue per trip.

These things are as a result of strategic execution, with a view to build long-term growth and scale. Our company is just a better company and a stronger company than it was when we were here 12 months ago.

So, it might be that macro factors impact us as the macro environment is complex. But the far more substantial impact is the work that we've completed throughout the pandemic to build the foundation stones for growth today. And the way that we're implementing our strategies for growth ahead.

It's this position that we're in that enables us, just by focusing on the things that are within our control, to continue to simply grow.

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And so today, we have this once in a generation opportunity to grow. I've said that in the past, that message; today I reafrm it. From here, we grow.

For the remainder of this call, three things. Firstly, we will hand over to Peter to talk about the great cash results and the operating leverage that's coming through. And then secondly, we'll return to me and let's talk about the outlook and the growth ahead. And then fnally we'll open the room for questions.

Thank you, Peter.

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Peter McWilliam (Jayride Group Chief Financial Ofcer): Thank you Rod.

It is very encouraging to see the strategies we have put in place are increasingly helping us win market share and increase proftability.

From where I am sitting the highlight for this quarter is the stand-still cash fow performance. The performance here looks to be a pronounced infection point.

In the bar chart at the top of page 2 you can see the stand-still cash performance and its relationship with cash receipts from customers over multiple quarters. The infection point that I refer to is best shown in the bars on the far right of the chart and by comparing these bars to the other periods. For this quarter the net increase in stand-still cash fow was $692,000.

Beyond the $692,000 movement, the key takeaway is: At this level of scale and operating leverage, the underlying business is now cash generative and able to contribute to discretionary growth and technology investments.

The efects of this can clearly be seen in the cash waterfall chart, at the bottom of page 2,

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where the $500,000 of stand-still cashfow substantially covered the growth investments and helped produce a much improved $274,000 cash outfow for the quarter. This performance left the company with $3.7 million of cash to be deployed in future periods.

The result was built of strong contribution and an increase in the receipts movements from trips booked. Grants played a part and periodically will, but the job was already done before factoring grants in and the infection point stands.

To help you model potential outcomes and get a feel for what is ahead, I would like to draw your attention to the four charts at the bottom of page 4. We refer to these four charts as our performance dashboard and regularly include them in updates to the market.

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If you multiply passenger trips booked by net revenue per trip and then by contribution proft margin you can calculate the contribution proft. The bottom chart on the right shows our fxed operating costs.

When looking at these charts closely, it is easy to see why we are hitting milestones in quick succession. Passenger trip volumes, net revenue per trip, and contribution proft margin are increasing, while operating and corporate costs are relatively fxed.

With respect to infationary cost pressures, I will take a moment to discuss our diferent costs and the potential impact given it is topical.

For contribution proft margin, we believe it is more likely transport companies will increase their prices than our predominantly tech variable cost providers, and so contribution margin should at least hold with the potential for larger cart sizes to increase net revenue.

For fxed costs, the majority of our costs are people related. We have a global remote model that should help insulate us and have recently observed that the heat is coming out of the product and technology recruitment markets.

Before handing back to Rod, I would like to reiterate 3 key points.

1. The results are strong and have outperformed the travel recovery following sound investments in initiatives that support market capture, margin expansion and cash conversion.
2. The company has hit a key infection point in cash generation to deliver stand-still cash fow that can increasingly cover the growth investments.
   3. The overall cash outfow of $274,000 this quarter left the company with $3.7 million at 30th June 2022 and a clear path to further milestones in coming periods.

Rod Bishop: Thank you, Peter. Onto our outlook. Our outlook is positive.

Jayride is focused on execution and we're delivering the milestones that we said that we would deliver. We're well positioned to continue growth in quarter one of FY23 and across the year ahead.

We've just had another milestone breaking quarter, and as Peter mentioned, we are generating cash fows now to self fund a large share of our own growth investment, and we have a strong balance sheet.

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