Ten Lifestyle (TENG), which works with global banks to drive loyalty among their high net worth customers by offering concierge services, said in a trading update today that it had seen active members jump by more than a third over the past, driving net revenues up 49% to £30.9m and Ebitda to a record £5m, beating its previous highest half year profit of £4m in the second half of 2022.
It said that in the six months to the end of February 2023 member numbers had climbed to 316,000, up from 275,000 at the end of the last full year in September and 221,000 a year earlier. The company noted that it had continued its investment in its technology and proposition to drive improvements in service levels and bolster its competitive advantage.
Those investments appear to be paying off - in November, for example, Ten expanded its digitally enabled concierge programme for the premium cardholders of an issuing bank in Latin Americas after early success, while in February it won a new mandate in the Americas and materially increased the value per member of an existing contract in EMEA.
Ten plans to announce its half-year results on Wednesday 3 May 2023.
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Ten is a beneficiary of the battle among banks and other premium brands to keep hold of their wealthiest customers, helping them to offer their clients’ ways to organise their often-high-end lifestyle and travel needs.
That’s translating into strong demand, which means the group has hit a critical mass which should see it deliver a maiden pre-tax profit (PTP) in the current year – brokers expect PTP of £3.4m in 2023 on sales of £58m, rising to £4.2m and £64m the year after.
The company is in a net cash position of £0.5m, lower than expected due to the impact of a late client receipt of £1.0m, which has now been received. Working capital requirements are underpinned by an invoice discounting facility, and Ten expects to generate net cash in H2 2023.
After a difficult year, Ten’s shares have doubled from their October lows, but still trade on less than 25x 2023’s forecast EPS, relatively conservative given the growth on offer. With travel demand bouncing back strongly after the pandemic and the wealthy’s propensity to spend showing no signs of abating, Ten is in good position to deliver further contract success.