Which company has the most valuable customers?

Wednesday, Apr 11 2018 by

I've been thinking about different approaches to valuation. Customer bases for example have wildly different values. Three UK companies:


ASOS (y/e Aug 2017)
Sales £1.9bn
PBT £80m
Active customers 16.5m

ASOS annual PBT/customer £5


Tesco (y/e Feb 2018)

  • Sales £51bn
  • PBT £1.3bn
  • Active customers 40m (based on 79m shopping trips/week - I've assumed that customers visit twice/week on average)

TSCO annual PBT/customer £33


CMC Markets (y/e Mar 2018(e))

  • Sales £185m
  • PBT £57.5m
  • Active customers 39K

CMCX annual PBT/customer £1,475


CMC Markets seemingly have got a licence to print money.

Can you think of any other listed company that has such an elevated profit/customer?

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CMC Markets plc is a holding company. The Company is a provider of online and mobile trading servicing both retail and institutional clients. The Company enables clients to trade over 10,000 financial instruments, including indices, commodities, foreign exchange (FX) and equities through its trading platform. It operates through three segments: UK and Ireland (UK & IE), Europe, and Australia, New Zealand and Singapore (APAC) and Canada. Clients can trade the markets via contracts for difference (CFDs), financial spread bets (UK and Ireland segment only) and binaries. With the Company's spread bet, a client bets a specific stake size per point movement of a product, rather than trading a specific number of shares or units. The Company offers four types of binaries: Ladder, One Touch, Up/Down and Range. It also offers Australian wholesale and retail clients the ability to buy and sell Australian Securities Exchange (ASX) and SSX (formerly APX) listed products and managed funds. more »

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Tesco PLC (Tesco) is a retail company. The Company is engaged in the business of Retailing and associated activities (Retail) and Retail banking and insurance services. The Company's segments include UK & ROI, which includes the United Kingdom and Republic of Ireland; International, which includes Czech Republic, Hungary, Poland, Slovakia, Malaysia and Thailand, and Tesco Bank, which includes retail banking and insurance services through Tesco Bank in the United Kingdom. The Company's businesses include Tesco UK, Tesco in India, Tesco Malaysia, Tesco Lotus, Tesco Czech Republic, Tesco Hungary, Tesco Ireland, Tesco Poland, Tesco Slovakia, Tesco in China, Tesco Bank and dunnhumby. The Company's brands include Finest, Exclusively at Tesco, F&F and Fox & Ivy. Finest and Exclusively at Tesco are the two food brands in the United Kingdom. The Company offers a range of personal banking products and services that include credit card receivables, personal current accounts and personal loans. more »

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Asos PLC is a global fashion destination for a range of things. The Company sells and offers a range of fashion-related content on ASOS.com. The Company's segments include UK, US, EU and RoW. It sells over 85,000 branded and own-label products through localized mobile and Web experiences, delivering from its fulfilment centers in the United Kingdom, the United States, Europe and across the world. It offers approximately 75,000 separate clothing ranges, spanning women's wear and menswear, footwear and accessories, alongside its jewelry and beauty collections. The Company's collection of specialist own-label lines includes ASOS Curve, ASOS Maternity, ASOS Tall and ASOS Petite. The Company caters a range of customer segments and sizes, across all categories and price points. It also operates returns centers in Australia and Poland. It operates country-specific Websites in Australia, France, Germany, Italy, Spain, Russia and the Unites States. more »

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  Is LON:CMCX fundamentally strong or weak? Find out More »

3 Posts on this Thread show/hide all

sharmvr 11th Jul 1 of 3

I am not sure it is a fair basis of comparison, much like one wouldn't consider any ratio without industry context, I think the same applies here. That said, on an industry basis when considering over multiple periods, I think it would offer some very valuable insights, especially when assessing a company's moat.

Tesco and Asos are volume business, Fortnum & Mason & Burberry are not - they would clearly have a higher profit per customer but would not have the same customer opportunity (addressable market in MBA speak!).

Further, if you were a b2b, you would likely have a smaller customer base, but stickier and potentially higher profit / customer.

In answer to your question on CMC, Hargreaves Lansdown (LON:HL.) generates £208/customer after tax! Anticipated to be £218 for 2019.
That said the company is quite literally a license to print money, and had it not been for stupid behavioural biases like waiting for it to drop that little bit more, it would have made me a decent wad too!

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shipoffrogs 11th Jul 2 of 3

Interesting concept.

But to flip it - is it better to invest in companies with the least valuable customers? Buffett likes companies where there are many customers making small value purchases (that said repeat purchases would be a major component - Washington Post, Coke, American Express, See's Candies etc).

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sharmvr 11th Jul 3 of 3

In reply to post #492081

I say we find the company where:
They have lots of customers,
Those customers makes lots of high value repeat purchases,
Those purchases attract a high margin.

Interestingly I was being somewhat facetious there but I see why he has such a large holding in £aapl (services + iPhone together) hit the requirement.
In fact a lot of the mega techs meet this requirement - maybe US tech is not as overvalued as some would have you believe.

Great post - certainly made me think

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