Jayride acquires AirportShuttles.com to expand US presence and accelerate to positive cash flow

Major airport transfer travel business Jayride (ASX: JAY) has acquired AirportShuttles.com to boost its growth in the United States and accelerate its path to positive cash flow.

Jayride describes AirportShuttles.com as a leading online platform for airport shuttle bookings in the US, and a complementary fit with its growth strategy. However, during the pandemic the company filed for Chapter 7 bankruptcy given it was unable to trade during the COVID travel disruptions.

For a total of US$215,000 (A$303,000), the purchase includes the domain name, technology, IP, and website traffic, which is substantial in the US market.

The acquisition cost will be funded from existing cash reserves and any minor integration cost will be incurred this quarter.

The transaction will be completed this month, with Jayride looking to instantly capitalise from AirportShuttles.com’s assets.

Online revenue generation

According to Jayride’s co-founder and managing director Rod Bishop AirportShuttles.com’s domain is the “best top-level domain name” for airport shuttles, which is a key element of the service that Jayride provides its travellers.

“Jayride was the exclusive supplier of rides to AirportShuttles.com until February 2020 and the onset of the pandemic.”

“The assets we are acquiring are a compelling fit with our growth strategy to build the world’s leader in rides for travellers.”

Jayride has a track record of converting website traffic into passenger trips booked and the expectation is that the acquisition will be immediately accretive to Jayride’s revenue, contribution profits, and cash flows.

The traffic and revenue of AirportShuttles.com is approximately 70% from the US market, and Jayride believes the domain can be applied to opportunities in other market beyond the US.

Website traffic to AirportShuttles.com comes from search engines like Google that have no cost associated with customer acquisition.

Strengthened metrics

Jayride is making progress towards its objective of becoming cash flow positive.

During 1H FY2023, contribution profit climbed to $1.21 million – the company’s highest-ever performance.

In 1H FY2023, as compared to 1H FY2022, cash receipts from customers and stand-still operating cash flows increased by 312% to $2.3 million.

In Q2 of FY2023, the company’s net revenues rose 234%, to $1.13 million, over Q2 of FY2022.

Additionally, with 53,500 bookings in December, Jayride experienced its largest monthly volume of passenger trip reservations.

The most recent trading data as of 25th January revealed 40,600 bookings, with a monthly rate of 50,400 trips and a quarterly rate of 150,000 journeys, ahead of the northern hemisphere’s prime summer travel season.

Business outlook

Jayride expects to continue its path towards positive cash flow in the second half of FY2023 by taking advantage of the peak travel season in the US and Europe, the reopening of the Asian market, and upgrades to raise net revenue per trip.

To increase traveller acquisition, conversion, and retention, the company is increasing its traveller offer and investing in market growth strategies.

“This is our moment, to really capture the opportunity and to accelerate our path to cash flow positive, with one million plus trips booked per year at $10 net revenue each, and to become the world leader in rides for travellers,” Mr Bishop stated in a recent call with shareholders.

Jayride closed out the December quarter with $4.92 million cash in the bank, plus a $1 million undrawn credit line capacity.