TIDMLOOP
RNS Number : 8041Z
LoopUp Group PLC
23 September 2020
23 September 2020
LOOPUP GROUP PLC
("LoopUp Group" or the "Group")
Interim results for the period ended 30 June 2020
Resilient performance delivering strong revenue growth,
profitability and cash generation
LoopUp Group plc (AIM: LOOP), the premium cloud communications
provider, is pleased to announce its unaudited interim results for
the period ended 30 June 2020.
The results demonstrate six months of strong financial
performance, with significant revenue growth, margin expansion and
high cash flow conversion. This performance has been driven
primarily by the large-scale migration towards working from home
due to Covid-19. The Group enters the second half of the year with
major new customer wins set to roll out, a healthy new business
pipeline, and a strong balance sheet. This will enable investment
in sustainable growth of our recently augmented product offering,
which now also enables our customers to make and receive external
calls via Microsoft Teams and provides LoopUp with a significantly
expanded addressable market opportunity.
Financial highlights:
-- Revenue growth of 43% to GBP31.9 million at a gross margin of 71.4%
-- EBITDA growth of 247% to GBP12.2 million at an EBITDA margin of 38.2%
-- Adjusted operating profit growth of 664% to GBP9.2 million
-- EPS growth of 1,164% to 13.9 pence
-- Strong cash position as at 30 June 2020 improved to GBP8.3 million
-- Materially-reduced net debt to GBP5.3 million
Six months Six months
to to
30 June 2020 30 June 2019
Year-on-year
GBP million (unaudited) (unaudited) growth
--------------------------------- -------------- --------------- -------------
Revenue 31.9 22.4 43%
Revenue from Core LoopUp
Products(1) 27.9 18.1 54%
Gross profit 22.8 15.0 52%
Gross profit from Core LoopUp
Products(1) 21.7 13.9 56%
Gross margin 71.4% 66.9% +4.5 PPS
Gross margin from Core LoopUp
Products(1) 77.8% 76.9% +0.9 PPS
Adjusted EBITDA(2) 12.2 3.5 247%
Adjusted EBITDA margin(2) 38.2% 15.7% +22.5 PPS
Adjusted operating profit(3) 9.2 1.2 664%
Operating profit / (loss) 7.8 (0.2)
Cash 8.3 3.8
Net debt 5.3 11.5
Adjusted diluted EPS (pence)(3) 13.9p 1.1p 1,164%
--------------------------------- -------------- --------------- -------------
(1.) Includes LoopUp (now comprising both remote meetings and
cloud telephony) and Event by LoopUp, and excludes Cisco resale
(2.) Earnings before interest, tax, depreciation and
amortisation, excluding share-based payments charges
(3.) Adjusted to exclude amortisation of acquired intangibles
and share-based payment charges
Operating highlights:
-- Material increase in demand for Core LoopUp Products,
especially in the Group's primary Professional Services
("PS") (4) target market where:
- PS volume grew 90% to 335 million minutes (58%
overall to 617 million minutes)
- Net Revenue Retention (5) - measuring overall impact
of churn, growth and shrinkage in established accounts
- improved to 132% for PS customers (114% overall)
- PS revenue grew 81% to approximately GBP16.1 million
(54% overall to GBP27.9 million)
-- 'Event by LoopUp' volume grew 88% to 3,596 events
-- Sales momentum acceleration driven by Covid-19 for
strongest ever new business performance
- Continued success growing market share in PS, with
numerous landmark customers won across legal, corporate
finance, investment banking and consulting sectors
- New Customer CAC Ratio - the fully-loaded cost
to acquire GBP1 of new ARR - of GBP0.40, comparing
favourably with 2020 SaaS benchmark (6) of GBP1.60
- New pods now active in the French and German markets
-- Enhanced forward revenue visibility following material
migration to committed term contracts (subscriptions
and minimum spend) from rolling monthly pay-as-you-go.
As at end H1 2020:
- 30% of LoopUp business came from committed term
contracts (13% at the start of the year)
- Average committed term duration: 24 months
-- Broad platform scaling to contend with materially higher
work-from-home load, successfully resulting in zero
core platform downtime year-to-date
-- LoopUp Meetings video capabilities augmented to facilitate
20 concurrent cameras
Post period highlights:
-- Announced major extension to LoopUp flagship product
to include global cloud telephony via 'Direct Routing'
integration with Microsoft Teams
- A five-fold increase in our addressable market
by 2024 to more than $10 billion (7)
- Rapidly developing pipeline - 219 live opportunities
have potential Total Contract Value of approximately
GBP50 million
- Recruitment of 10 industry-recognised pre-sales
consultants and project managers
-- Major new contract win with one of the world's top-5
law firms and two top-100 law firms
-- Expanded distribution partnership with C&W Communications
in the Caribbean and Latin America to FY2022
-- Launch of promotional LoopUp Meetings 'freemium' plan
to drive lead generation
-- Continued migration momentum towards committed term
contracts
-- R&D tax credit for GBP1.3 million received in August
2020
- Cash balance at 31 August 2020: GBP10.6 million
- Net Debt at 31 August 2020: GBP3.0 million
Outlook and guidance:
-- Overall macro conditions continue to be marked by a
high degree of instability relating to the societal
and economic effects of the Covid-19 pandemic.
-- This instability makes it difficult to provide more
specific guidance on near-term market expectations
beyond our July trading update, other than noting recent
forex changes and continued momentum towards committed
term contracts.
-- Into 2021 and beyond, the increasing prevalence of
Microsoft Teams for internal collaboration, landscape-changing
analyst projections for the extension of Teams into
'Direct Routing' cloud telephony, and initial market
reaction to our differentiated implementation of Direct
Routing, all combine to makes us very optimistic about
the future prospects of our flagship LoopUp product.
-- The Group is confident in its ability to drive attractive,
sustainable and profitable growth, and intends to invest
from its cash balance to maximise shareholder value
creation.
(4) Law, investment banking and corporate finance; private
equity and venture capital, asset and fund management,
consulting, accounting, marketing and advertising, PR,
recruiting, and property
(5) Net Revenue Retention measures the year-on-year percentage
revenue change in all accounts that were at least 4 months
old one-year prior, averaged over the trailing 12-month
period
(6) KBCM Technology Group (formerly Pacific Crest Securities)
SaaS survey
(7) Source: Wainhouse Research
Steve Flavell and Michael Hughes, co-CEOs of LoopUp Group,
commented,
"It has been a strong and incredibly busy first half for our
business as Covid-19 has accelerated changes in working habits.
We're proud to be helping our customers with their
business-critical communications in these challenging times, by
providing simple, reliable and secure products that are diligently
operated and supported. We would like to thank our team for their
tremendous and ongoing efforts.
With change comes opportunity, and we're embracing this
opportunity with our recent product expansion into global cloud
telephony integration for Microsoft Teams. Early market reactions
to our differentiated implementation have been highly encouraging,
and we're confident in our ability to generate strong, profitable
growth in this vibrant market that is set to grow from $3.5 billion
to $10.4 billion over the next four years. We have a balance sheet
that enables us to invest for growth and we're excited and
focussed."
Market abuse regulation:
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
LoopUp Group plc via FTI
Steve Flavell, co-CEO
+44 (0) 20 7886
Panmure Gordon (UK) Limited 2500
Dominic Morley / Alina Vaskina (Corporate
Finance)
Erik Anderson (Corporate Broking)
+44 (0) 20 7260
Numis Securities Limited 1000
Simon Willis / Jonny Abbott (Corporate Finance)
+44 (0) 20 3727
FTI Consulting, LLP 1000
Matt Dixon / Emma Hall / Jamille Smith / Shamma
Kelly
About LoopUp Group plc:
LoopUp (LSE AIM: LOOP) is a premium cloud communications
solution for business-critical external communications. The
solution combines premium remote meetings with inbound and outbound
cloud voice services via Direct Routing integration with Microsoft
Teams. Our customers benefit from a global fully-managed service,
and an emphasis on security, reliability and simplicity, delivered
with deep domain expertise and caring customer support. We're proud
to be trusted provider to over 5,000 organisations worldwide,
including more than 20 of both the world's top-100 law firms and
top-100 private equity firms, as well as enterprises such as
Travelex, Kia Motors, Planet Hollywood and National Geographic. The
Group is headquartered in London, with offices in San Francisco,
New York, Boston, Chicago, Dallas, Los Angeles, Denver, Cardiff,
Milton Keynes, Madrid, Berlin, Malmo, Hong Kong, Sydney and
Barbados, and is listed on the AIM market of the London Stock
Exchange (LOOP). For further information, please visit:
www.loopup.com .
Chief Executive Officers' Business Review
Strong, profitable and cash-generative growth
We are delighted to announce strong trading for the first half
of FY2020, with business performance accelerated by a material
increase in demand for our premium remote meetings products - both
LoopUp and 'Event by LoopUp' - in response to the widespread
migration towards working from home associated with the Covid-19
pandemic. This strong first half performance owes much to the hard
work of our people, who have adapted brilliantly to this new
working environment and we would like to thank them for their
ongoing efforts.
We are incredibly proud to be helping our customers stay
securely and reliably connected on their business-critical client
communications during these difficult times. We have added capacity
across our global platform and are pleased to report zero primary
outages during the period, in our determination to ensure reliable
service for our customers.
The Group has delivered strong, profitable growth and enhanced
cash generation during the period. Revenue grew by 43% to GBP31.9
million at an improved gross margin of 71.4%, and EBITDA grew by
247% at a materially improved margin of 38.2%. Adjusted operating
profit increased 664% to GBP9.2 million, and earnings per share (4)
increased 1,164% to 13.9 pence. We have strengthened our balance
sheet, finishing the period with a healthy cash balance of GBP8.3
million and materially-reduced net debt of GBP5.3 million.
Once again, performance was superior in our core Professional
Services (PS) target market, where minute volumes grew by 90% and
revenue grew by 81%. Similarly, our key Net Revenue Retention KPI,
which measures the overall impact of churn, growth and shrinkage in
established accounts, was also stronger in PS verticals at 132%,
versus 114% across all verticals.
We have worked collaboratively with our customers on pricing and
have seen a positive migration towards committed term contracts - a
mix of subscription contracts and minimum spend contracts. Over 30%
of LoopUp business now comes from such committed term contracts by
the end of the period versus 13% at the start. While these
contracts clearly come at a cost of reduced effective pricing, we
benefit from the forward-looking revenue visibility given the
average initial term duration of approximately 24-months.
(4) Adjusted to exclude amortisation of acquired intangibles and
share-based payment charges, and calculated on a diluted shares
basis
Strongest ever new business performance
Great communications have always been at the heart of successful
organisations and now more so than ever . Covid-19 has accelerated
the need for our services and we are delighted to report our
strongest ever period of new business wins, with continued success
at growing our market share within our core PS target market. Our
New Customer CAC Ratio - the fully-loaded cost to acquire GBP1 of
new ARR - improved markedly to GBP0.40 (FY2019: GBP1.38), comparing
highly favourably with the 2020 year-to-date SaaS benchmark of
GBP1.60. There was a particularly strong influx of new customers in
March and April, often after having experienced reliability and
security issues with their incumbent provider.
Post period end, landmark customer wins have continued into the
second half, with the Group closing a significant new contract with
one of the world's top-5 law firms. Following a successful pilot
with 300 users, LoopUp Meetings will now be rolled out globally
with the potential to become one of the Group's largest accounts.
This contract follows two other top-100 global law firm wins
secured during July and August.
We have expanded our existing partnership with C&W
Communications in a new contract through to the end of FY2022. A
white-labelled version of LoopUp Meetings will now be included in
C&W's core Unified Communications and Collaboration portfolio
of products, with expanded distribution across 16 Caribbean and
Latin America country markets.
To drive forward and promote lead generation, the Group has also
launched two new online plans for LoopUp Meetings. These new
offerings, aimed at individual users within target market
professional services firms, enable prospect LoopUp customers to
experience the product as guests of existing customers and try out
the product for hosting their own online meetings.
Strategic product expansion in cloud telephony
In late July, we announced a major extension of our flagship
product, LoopUp, by adding global cloud telephony services via
'Direct Routing' integration with Microsoft Teams, to complement
our existing best-in-class remote meetings capability. This enables
users to make and receive outbound and inbound phone calls directly
from their Teams user interface on any device, irrespective of
geographic location, and with differentiated audio quality,
reliability and security.
'Direct Routing' refers to the interconnection between Microsoft
Teams cloud PBX ('Phone System') and a third-party voice provider's
network. In LoopUp's case, this interconnection is implemented
'cloud-to-cloud' to LoopUp's secure, enterprise grade,
multi-tenancy global platform, avoiding the need for equipment at
the customer premises. The solution replaces incumbent voice
providers, potentially on a global basis, and is presented as a
fully-managed service, with premium 24/7 global support, global
telephone number management, and extensive Microsoft Teams and
Voice expertise.
Customer benefits include: global service provision from a
single, trusted provider; differentiated voice quality, reliability
and security on all business-critical, external communications; and
a smooth, compliant managed transition process from disparate
legacy systems. Our remote meetings proposition is also enhanced
due to cost savings achieved by internal call legs now being
on-network for the customer, as well as our Microsoft Teams add-on
application with schedule and join LoopUp meetings.
The extended LoopUp solution is priced on a monthly user
subscription basis, which includes bundled domestic calls, meetings
access, screen sharing and video. Additional per-minute surcharges
apply for international meetings access and voice calls.
A $10 billion addressable market by 2024
Covid-19 has precipitated a paradigm shift in remote working and
intensified the spotlight on best-in-class solutions that drive
business continuity and productive collaboration.
Adjacent to LoopUp's focus on business-critical external client
communications, Microsoft Teams has grown incredibly strongly in
the market for channelised chat and internal collaboration. Daily
active Teams users increased by 70% to 75 million in just a
seven-week period during lockdown.
As yet, relatively few larger enterprises have extended Teams
into business telephony. However, Gartner projects that 90% of
larger enterprises that use Teams will adopt Direct Routing
telephony by 2022, a landscape-changing shift from just 10% in
2019.
Wainhouse Research sizes the 2019 cloud telephony market at
$13.7 billion, and projects growth to $25.8 billion by 2024. The
addressable segment of particular relevance to LoopUp is cloud
telephony integrated with 'Teams' UC platforms. This is forecast to
grow from $1.5 billion in 2019 to $7.6 billion in 2024, a 38% CAGR.
When combined with our existing professional services remote
meetings market (approximately $2 billion in 2019 and $2.8 billion
in 2024), this leads to a total addressable market of $3.5 billion
in 2019 and $10.4 billion in 2024.
Business priorities
The Group is focused on the following priorities:
-- Growing pipeline for the expanded LoopUp product
We are investing in lead generation and running hard to build
pipeline for our newly-expanded LoopUp product, and we have had a
very encouraging start. In addition to the existing pipeline for
LoopUp Meetings, we have generated 251 qualified opportunities, of
which 219 remain live at various stages of the sales cycle and with
potential Total Contract Value in excess of GBP50 million.
-- Augmenting our operations for broader international service provision
A core theme to our differentiated value proposition -
particularly in the Direct Routing market - is its international
availability as a premium fully-managed service. As such, we are
interconnecting with additional tier-1 carrier partners (beyond our
existing 13), as well as adding numerous virtual Direct Routing
points of presence in Azure as satellites to our six primary global
data centres.
-- Continuing to innovate in our core remote meetings capabilities
We are continuing to innovate to make sure our remote meetings
capabilities remain best-in-class for professional services
external client communications. In the first half, we added
resilient scale to a broad array of platform components to contend
with the material increases in demand, and we also extended our
video capabilities to support 20 concurrent cameras in response to
customer demand. We expect to launch additional significant feature
upgrades during H2 2020.
Chairman, Lady Barbara Judge CBE
We are deeply saddened by the loss of our Chairman, Lady Barbara
Judge, who died from pancreatic cancer earlier this month. On
behalf of the Board and everyone at LoopUp, we extend our thoughts
and sympathies to Barbara's family. The Group benefitted hugely
from her stewardship, her wealth of experience and the calm
guidance she brought to us, and she is sadly missed by all of
us.
Mike Reynolds, Non-Executive Director and previously Chairman of
the Group prior to our 2016 IPO, has assumed the role of acting
Non-Executive Chairman while the Board gives due consideration to
appointing a new Chairman. An update on succession planning will be
made as appropriate in due course.
Outlook
Our ability to provide more specific guidance than already
presented in our July trading update is hampered by the high degree
of instability around overall macro conditions, business climate
and working practices. We do note, however, that the dollar has
weakened against the pound since the end of the first half, and we
continue to see momentum in customer migrations to committed term
contracts, which while clearly beneficial in terms of revenue
visibility and retention, also naturally lead to effective pricing
reductions.
Looking further ahead, we are very confident in our ability to
drive attractive, sustainable and profitable growth, and we intend
to invest from our strengthened balance sheet to maximise
shareholder value creation. The market opportunity for 'Direct
Routing' cloud telephony for Microsoft Teams is clear, and the
speed and success of early pipeline build since late July launch
makes us very optimistic about our differentiated implementation
and future prospects for the Group.
Steve Flavell Michael Hughes
co-CEO co-CEO
Unaudited consolidated statement of comprehensive income for the
six months to 30 June 2020
Six months Six months
to to Year to
30 June 30 June 31 December
GBP'000 2020 2019 2019
--------------------------------------- ----------- ----------- -------------
Revenue 31,897 22,350 42,541
Cost of sales (9,133) (7,393) (14,304)
---------------------------------------- ----------- ----------- -------------
Gross profit 22,764 14,957 28,237
Adjusted operating expenses
(1) (10,587) (11,445) (21,825)
---------------------------------------- ----------- ----------- -------------
Adjusted EBITDA (2) 12,177 3,512 6,412
Depreciation (828) (571) (1,475)
Amortisation of development
costs (2,164) (1,738) (3,777)
Adjusted operating profit
(3) 9,185 1,203 1,160
Exceptional reorganisation
costs - - (509)
Amortisation of acquired intangibles (1,105) (1,105) (2,210)
Share-based payment charges (298) (262) (588)
---------------------------------------- ----------- ----------- -------------
Operating profit / (loss) 7,782 (164) (2,147)
Finance costs (299) (314) (647)
Profit / (loss) before income
tax 7,483 (478) (2,794)
Income tax (490) (252) 789
Profit / (loss) for the period 6,993 (730) (2,005)
Other comprehensive income
and loss
Currency translation gain
/ (loss) 70 (148) (397)
Total comprehensive income
/ (loss) for the period attributable
to the equity holders of the
parent 7,063 (878) (2,402)
======================================== =========== =========== =============
Earnings / (loss) per share
(pence) - Note 4
* Basic adjusted (4) 15.1 1.2 2.4
* Basic 12.7 (1.3) (3.6)
* Diluted adjusted (4) 13.9 1.1 2.2
* Diluted 11.6 (1.2) (3.3)
======================================== =========== =========== =============
(1.) Total administrative expenses excluding depreciation,
amortisation of development costs and acquired intangibles,
exceptional reorganisation costs and share-based payment
charges.
(2.) Adjusted EBITDA is operating profit stated before depreciation,
amortisation of development costs and acquired intangibles,
exceptional reorganisation costs and share-based payment
charges.
(3.) Adjusted operating profit is operating profit stated
before amortisation of acquired intangibles, exceptional
reorganisation costs and share-based payment charges.
(4.) Basic adjusted and diluted adjusted earnings per share
are calculated using profit before tax adjusted for
exceptional reorganisation costs.
Unaudited consolidated statement of financial position at 30
June 2020
30 June 30 June 31 December
GBP'000 2020 2019 2019
---------------------------------- --------- --------- ------------
Assets
Non-current assets
Property, plant and equipment 2,748 2,393 2,737
Right of use assets 2,785 1,879 3,228
Intangible assets:
* Development costs 10,164 8,578 9,104
* Other intangible assets 28,544 30,761 29,656
* Goodwill 30,951 30,951 30,950
Total non-current assets 75,192 74,562 75,675
----------------------------------- --------- --------- ------------
Current assets
Trade and other receivables 15,239 9,584 9,321
Cash and cash equivalents 8,281 3,756 3,000
Current tax 1,486 1,212 1,631
----------------------------------- --------- --------- ------------
Total current assets 25,006 14,552 13,952
----------------------------------- --------- --------- ------------
Total assets 100,198 89,114 89,627
----------------------------------- --------- --------- ------------
Liabilities
Trade and other payables (7,671) (4,619) (5,415)
Accruals and deferred income (4,897) (2,268) (2,686)
Lease liabilities (862) (523) (862)
Borrowings (1,700) (1,700) (1,700)
Total current liabilities (15,130) (9,110) (10,663)
----------------------------------- --------- --------- ------------
Net current assets 9,876 5,442 3,289
Non-current liabilities
Borrowings (11,900) (13,600) (12,750)
Lease liabilities (1,923) (1,356) (2,366)
Deferred tax liability (5,709) (5,711) (5,709)
Total non-current liabilities (19,532) (20,667) (20,825)
Total liabilities (34,662) (29,777) (31,488)
----------------------------------- --------- --------- ------------
Net assets 65,536 59,337 58,139
=================================== ========= ========= ============
Equity
Share capital 277 276 276
Share premium 60,623 60,588 60,588
Other reserve 12,691 12,691 12,691
Foreign currency translation
reserve (2,262) (2,083) (2,332)
Retained loss (5,793) (12,135) (13,084)
Shareholders' funds attributable
to equity owners of parent 65,536 59,337 58,139
=================================== ========= ========= ============
Unaudited consolidated statement of changes in equity at 30 June
2020
Shareholders'
funds /
(deficit)
Foreign attributable
currency to equity
Share Share Other translation Retained owners of
GBP'000 capital premium reserve reserve loss parent
------------------------ --------- --------- --------- ------------- ------------------ --------------
Balance at 1 January
2019 276 60,504 12,691 (1,935) (11,667) 59,869
Profit and total
comprehensive income
/ (loss) - - - (148) (730) (878)
Equity share-based
payment compensation - - - - 262 262
Proceeds from share
issues - 84 - - - 84
Balance at 30 June
2019 276 60,588 12,691 (2,083) (12,135) 59,337
Profit and total
comprehensive income - - - (249) (1,275) (1,524)
Equity share-based
payment compensation - - - - 326 326
Proceeds from share
issues - - - - - -
Balance at 31 December
2019 276 60,588 12,691 (2,332) (13,084) 58,139
Profit and total
comprehensive income
/ (loss) - - - 70 6,993 7,063
Equity share-based
payment compensation - - - - 298 298
Proceeds from share
issue 1 35 - - - 36
Balance at 30 June
2020 277 60,623 12,691 (2,262) (5,793) 65,536
------------------------ --------- --------- --------- ------------- ------------------ --------------
Unaudited consolidated statement of cash flows for the six
months to 30 June 2020
Six months Six months
to to Year to
30 June 30 June 31 December
GBP'000 2020 2019 2019
-------------------------------------- ----------- ----------- -------------
Operating activities
Profit / (loss) before tax 7,483 (478) (2,794)
Non-cash adjustments:
Depreciation and amortisation 3,654 3,414 6,671
Share based payment charge 298 262 588
Interest payable 299 294 647
Working capital adjustments:
(Increase) / decrease in trade
and other receivables (5,841) (142) 80
Increase / (decrease) in trade
and other payables 4,177 (545) 737
Income tax paid (124) (428) -
Income tax received - - 401
-------------------------------------- ----------- ----------- -------------
Cash generated from operations 9,946 2,377 6,330
Cash flows from investing activities
Purchase of property, plant
and equipment (397) (558) (1,257)
Development expenditure (3,224) (2,436) (5,001)
Net cash used in investing
activities (3,621) (2,994) (6,258)
-------------------------------------- ----------- ----------- -------------
Cash flows from financing activities
Proceeds from share issues 35 84 84
Repayment of loans (850) (850) (1,700)
Interest and finance fees paid (299) (294) (647)
Net cash generated by financing
activities (1,114) (1,060) (2,263)
-------------------------------------- ----------- ----------- -------------
Net increase / (decrease) in
cash and cash equivalents 5,211 (1,677) (2,191)
Cash and cash equivalents brought
forward 3,000 5,581 5,581
Effect of foreign exchange
rate changes 70 (148) (390)
Cash and cash equivalents carried
forward 8,281 3,756 3,000
-------------------------------------- ----------- ----------- -------------
Notes to the financial information for the six months ended 30
June 2020
1. General information
LoopUp Group plc (AIM: "LOOP", "LoopUp Group", or the "Group")
is a global provider of cloud communication software and services.
It is a public limited company incorporated and domiciled in
England and Wales, with company number 09980752. Its registered
office is The Tea Building, 56 Shoreditch High Street, London, E1
6JJ.
2. Basis of preparation and significant accounting policies
These consolidated interim financial statements have been
prepared in accordance with those IFRS standards and IFRIC
interpretations issued and effective or issued and early adopted as
at the time of preparing these statements (September 2020). This
results announcement does not constitute statutory accounts of the
Group within the meaning of sections 434(3) and 435(3) of the
Companies Act 2006. The balance sheet at 31 December 2019 has been
derived from the full Group accounts published in the Annual Report
and Accounts 2019, which has been delivered to the Registrar of
Companies and on which the report of the independent auditors was
unqualified and did not contain a statement under either section
498(2) or section 498(3) of the Companies Act 2006.
The results have been prepared in accordance with the accounting
policies set out in the Group's 31 December 2019 statutory
accounts, which are based on the recognition and measurement
principles of IFRS in issue as adopted by the European Union
("EU"). The Group has changed its policy on segmental reporting as
outlined in note 3 below.
These unaudited interim results have been prepared on a going
concern basis. At the balance sheet date, the Group had net cash of
GBP8.3m and net assets of GBP65.5m. The impacts of Covid-19 on the
demand for LoopUp have resulted in significant improvements in
profitability and cash generation in the period. The Group's cash
position has increased to GBP10.6m at the end of August 2020, and
as such, the Directors have a reasonable expectation that the Group
has adequate resources to continue operations for the next twelve
months.
The results for the six months ended 30 June 2020 were approved
by the Board on 22 September 2020. A copy of these interim results
will be available on the Group's web site www.loopup.com from 23
September 2020.
The principal risks and uncertainties faced by the Group have
not changed from those set out in the Annual Report and Accounts
2018.
There are no post balance sheet events to report.
3. Revenue and segmental reporting
The Directors have identified the segments by reference to the
principal groups of services offered and the geographical
organisation of the business as reported to the chief operating
decision-maker (CODM). In July 2020 the Group announced a major
extension to the LoopUp proposition to include global cloud voice
services via direct routing integration with Microsoft Teams. This
capability will be marketed to customers alongside the existing
premium remote meetings solution as part of a combined, core,
LoopUp proposition. This new combined segment has been termed Core
LoopUp Products below. Existing revenue from the voice proposition,
which was previously categorised as part of the 'third party and
other services' segment, has been added to this segment in the
comparative information below. The remaining revenue previously
categorised as 'third party and other services' revenue has now
been categorised as 'third party resale services'.
Segmental revenues are external and there are no material
transactions between segments.
The Group's largest customer represented less than 3% of total
revenue in all periods reported above.
No segmental balance sheet was presented to the CODM.
The Group's revenue disaggregated by primary geographical
markets is as follows:
Core LoopUp Third party
GBP'000 Products resale services Total
---------------------------------- ------------ ----------------- -------
For the six months to 30 June
2020:
UK 14,844 1,739 16,583
Other EU 3,900 836 4,736
North America 8,577 1,390 9,967
Rest of world 611 - 611
---------------------------------- ------------ ----------------- -------
27,932 3,965 31,897
---------------------------------- ------------ ----------------- -------
For the six months to 30 June
2019:
UK 9,965 1,963 11,928
Other EU 2,120 939 3,059
North America 5,771 1,336 7,107
Rest of world 256 - 256
---------------------------------- ------------ ----------------- -------
18,112 4,238 22,350
---------------------------------- ------------ ----------------- -------
For the 12 months to 31 December
2019:
UK 19,007 3,537 22,544
Other EU 4,046 1,728 5,774
North America 10,800 2,853 13,653
Rest of world 570 - 570
---------------------------------- ------------ ----------------- -------
34,423 8,118 42,541
---------------------------------- ------------ ----------------- -------
The Group's revenue disaggregated by pattern of revenue
recognition is as follows:
Core LoopUp Third party
GBP'000 Products resale services Total
---------------------------------- ------------ ----------------- -------
For the six months to 30 June
2020:
Services transferred at a point
in time 26,761 409 27,170
Services transferred over time 1,171 3,556 4,727
---------------------------------- ------------ ----------------- -------
27,932 3,965 31,897
---------------------------------- ------------ ----------------- -------
For the six months to 30 June
2019:
Services transferred at a point
in time 17,058 318 17,376
Services transferred over time 1,054 3,920 4,974
---------------------------------- ------------ ----------------- -------
18,112 4,238 22,350
---------------------------------- ------------ ----------------- -------
For the 12 months to 31 December
2019:
Services transferred at a point
in time 32,269 554 32,823
Services transferred over time 2,154 7,564 9,718
---------------------------------- ------------ ----------------- -------
34,423 8,118 42,541
---------------------------------- ------------ ----------------- -------
The Group's gross profit disaggregated by segment is as
follows:
Six months Six months 12 months
to 30 June to 30 June to 31 December
GBP'000 2020 2019 2019
----------------------------- ------------ ------------ ----------------
Core LoopUp Products 21,726 13,931 26,449
Third party resale services 1,038 1,026 1,788
----------------------------- ------------ ------------ ----------------
22,764 14,957 28,237
----------------------------- ------------ ------------ ----------------
The Group's non-current assets disaggregated by primary
geographical markets are as follows:
Six months Six months 12 months
to 30 June to 30 June to 31 December
GBP'000 2020 2019 2019
--------------- ------------ ------------ ----------------
UK 74,873 72,400 74,648
Other EU 3 9 62
North America 311 255 1,410
Rest of world 5 19 11
--------------- ------------ ------------ ----------------
75,192 72,683 76,131
--------------- ------------ ------------ ----------------
4. Earnings per share
The basic earnings per share is calculated by dividing the net
profit attributable to equity holders of the Group by the weighted
average number of ordinary shares in issue during the year.
Six months 12 months
Six months to to
to 30 June 31 December
30 June 2020 2019 2019
------------------------------------- -------------- ----------- -------------
Profit / (loss) attributable
to equity holders (GBP000) 6,993 (730) (2,005)
Adjusted profit attributable
to equity holders (GBP000) (1) 8,396 637 1,302
Weighted average number of ordinary
shares in issue (000) 55,265 55,170 55,208
Basic earnings per share (pence):
* Basic adjusted (1) 15.1 1.2 2.4
- Basic 12.7 (1.3) (3.6)
===================================== ============== =========== =============
The diluted earnings per share has been calculated by dividing
the above profit numbers by the weighted average number of shares
in issue during the year, adjusted for potentially dilutive shares
that are not anti-dilutive.
Six months 12 months
Six months to to
to 30 June 31 December
30 June 2020 2019 2019
-------------------------------------- -------------- ----------- -------------
Weighted average number of ordinary
shares in issue ('000) 55,265 55,170 55,208
Adjustments for share options
('000) 4,961 4,737 5,058
-------------------------------------- -------------- ----------- -------------
Weighted average number of potential
ordinary shares in issue ('000) 60,266 59,907 60,266
-------------------------------------- -------------- ----------- -------------
Diluted earnings per share (pence):
* Diluted adjusted (1) 13.9 1.1 2.2
- Diluted 11.6 (1.2) (3.3)
====================================== ============== =========== =============
(1) Calculated using profit attributed to equity holders
adjusted for exceptional reorganisation costs, amortisation of
acquired intangibles and share based payment charges.
5. Dividends
The directors did not recommend the payment of a dividend for
the years ended 31 December 2019 or 2018.
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END
IR KKBBBNBKBACB
(END) Dow Jones Newswires
September 23, 2020 02:00 ET (06:00 GMT)
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