OrderYOYO announced on Monday, April 17th, the company’s performance during Q1-23. OrderYOYO’s ARR amounted to DKK 226m in March 2023, corresponding to a growth of 39% compared to 2022 consolidated proforma figures. Proforma net revenue amounted to DKK 54m and EBITDA before other extraordinary items was positive all months during Q1-23, which amounted to DKK 2.7m during the period. In connection to the Q1-23 trading update, the company announced the acquisition of Kingfood, a vertical market leader within the Asian cuisine segment serving more than 500 takeaway restaurants. Due to the strong Q1-23 performance and the acquisition of Kingfood the company raised its consolidated 2023 guidance.
“A few weeks ago, OrderYOYO published a full-year report that reflected a strong development, and through the recently presented Q1-23 development we can state that the company continues to show a strong momentum. Despite that the restaurant partners are facing challenging market conditions, with high inflation among other things, OrderYOYO delivered an ARR of DKK 226m in March, growing 39% compared to March 2022. Due to the strong ARR development, the company’s net revenue amounted to DKK 54m in Q1-23, which was slightly above our estimates of DKK 48-50m. Furthermore, OrderYOYO has shown profitability regarding operational EBITDA (EBITDA before other extraordinary items) during the last nine months, something that should be rewarded by investors”, says Analyst Group.
Delivered Profitable Growth During Q1-23
In the first quarter of 2023 OrderYOYO’s ARR amounted to DKK 226m (163), corresponding to a growth of 39% compared to consolidated Q1-22 proforma results. The company delivered an annualized GMV of DKK 2,293m (1,883) in March 2023, which contributed to a proforma net revenue of DKK 54m (42). EBITDA before other extraordinary items amounted to DKK 2.7m (-2.7), where all months in Q1-23 was EBITDA positive.
Acquisition of Kingfood – a Leading Online Ordering Company in Ireland and UK
In connection to the Q1-23 trading update, the company announced the acquisition of Kingfood, a vertical market leader within the Asian cuisine segment. Founded in 2017 in Dublin, Kingfood has built a strong market leading position within the market of online ordering software for the Asian cuisine takeaway vertical in Ireland and UK. Serving more than 500 Restaurant Partners generating more than DKK 150m in GMV (March 2023 annualized). Kingfood is expected to add more than DKK 10m to OrderYOYO’s ARR and contribute to further profitability.
OrderYOYO will acquire Kingfood in a transaction valuing Kingfood at DKK 13.4m, of which DKK 8.9m will be paid in newly issued OrderYOYO shares and the remaining DKK 4.5m will be paid in cash at closing. The issued shares correspond to less than 2% of OrderYOYO’s share capital. Closing is expected to occur on April 28, 2023.
“Following the acquisition of Kingfood, OrderYOYO takes the next step in the company’s consolidation strategy, bringing the number of restaurant partners to +10,000 while further strengthening the market position in UK and Ireland. The transaction is expected to be completed at approximately 1.3x Kingfood’s ARR in March 2023, which we consider to be an attractive ARR-multiple for a company that serves +500 takeaway restaurants generating more than DKK 150m in annualized GMV. Furthermore, we see positively that the acquisition takes place at a lower ARR multiple than what OrderYOYO is valued at, which creates a multiple arbitrage”, says Analyst Group.
Consolidated 2023 Guidance Raised
Given that OrderYOYO showed a strong development during Q1-23 and due to the acquisition of Kingfood, the company raised its consolidated 2023 guidance. The biggest change in terms of the average on the range is in the operational EBITDA, which Analyst Group considers to be partly attributable to an increased net revenue, as well as economics of scale and cost-synergies.
We will return with an updated analysis in connection with the half-year report of 2023.