TIDMLOOP
RNS Number : 7602G
LoopUp Group PLC
19 March 2020
LOOPUP GROUP PLC
("LoopUp Group" or the "Group")
Preliminary results for the year ended 31 December 2019
LoopUp Group plc (AIM: LOOP), the premium remote meetings
company, today announces its unaudited preliminary results for the
year ended 31 December 2019.
Financial Highlights
FY2019 FY2018
Year-on-year
GBP million (unaudited) (audited) growth
------------------------------ ------------- ----------- -------------
Revenue 42.5 34.2 24%
Gross profit 28.2 23.9 18%
Adjusted EBITDA (1) 6.4 7.7 (16%)
Adjusted operating profit
(2) 1.2 4.5 (74%)
Operating profit / (loss) (2.1) 0.9
Adjusted diluted EPS (pence)
(2) 2.2 9.3
Cash at 31 December 3.0 5.6
Net debt at 31 December 11.4 10.6
------------------------------ ------------- ----------- -------------
1. Earnings before interest, taxation, depreciation and
amortisation, adjusted to exclude non-recurring transaction costs,
exceptional reorganisation costs and share-based payments
charges
2. Adjusted to exclude non-recurring transaction costs,
exceptional reorganisation costs, amortisation of acquired
intangibles and share-based payments charges
Operating Highlights
-- Results in line with market expectations for FY2019, ending year with solid cash position
-- Group FY2019 revenue of GBP42.5 million (FY2018: GBP34.2 million)
Core LoopUp product ("LoopUp"): GBP21.2 million (FY2018: GBP20.6
million)
Event by LoopUp: GBP2.2 million (FY2018: GBP1.4 million)
MeetingZone Audio: GBP8.3 million (FY2018: GBP6.0 million)
Enablit: GBP2.8 million (FY2018: GBP1.6 million)
Cisco resale: GBP8.1 million (FY2018: GBP4.7 million)
-- Continued strong demand for LoopUp product, with numerous landmark accounts won during FY2019
World's largest private dispute resolution provider
Regional operations of a global top-6 accounting firm
Six of the world's top-200 law firms
-- LoopUp continues to gain market share in its core Professional Services market
Active users grew 24% from 33,356 in FY2018 to 41,209 in FY2019
(overall growth of 10% from 55,995 to 61,580)
Meeting minutes grew 19% from 199 million in FY2018 to 237
million in FY2019 (overall growth of 1% from 385 million to 388
million)
Revenue grew 12% from GBP12.1 million in FY2018 to GBP13.6
million in FY2019 (overall decline of 1% from GBP21.4 million to
GBP21.2 million)
(1) Law, investment banking and corporate finance; private
equity and venture capital, asset and fund management, consulting,
accounting, insurance, marketing and advertising, PR and media,
recruiting, and property
(2) At FY2019 constant currency
-- Key LoopUp unit economics metrics also outperform in Professional Services
Gross Revenue Churn of 5.6% (FY2018: 6.2%), compared with 9.0%
overall (FY2018: 7.4%; SaaS benchmark: 12.7%)
Net Revenue Retention of 106.7% (FY2018: 110.3%), compared with
95.5% overall (FY2018: 101.8%; SaaS benchmark: 102.7%)
New Customer CAC Ratio - the cost to acquire GBP1 of new ARR -
of GBP0.96, compared with GBP1.38 overall (FY2018: GBP1.08; SaaS
benchmark: GBP1.34)
-- During FY2019, there was a behavioural 8.8% year-on-year
decline in minutes per active LoopUp user (and a similar effect in
the MeetingZone Audio base). From extensive customer discussions,
we believe that macro conditions were the clear primary driver in
Professional Services, with a more even mix of both macro
conditions and competition as the drivers in other sectors
-- Transition of MeetingZone Audio customers over to the LoopUp
platform completed in Q4 2019 in all geographies except Sweden
-- Continued investment and innovation to enhance the LoopUp value proposition including:
Introduction of video
Software extended into German, French, Spanish, Swedish and
Chinese
-- Launched 'Event by LoopUp' for operator-assisted events, and
'Enablit' for value-added voice add-on services to Microsoft Teams
and Skype for Business
Post Period Highlights
-- Material increase in volumes across our global LoopUp and
Event by LoopUp platforms during March, driven by the large-scale
migration towards home-working associated with the Covid-19
outbreak
Closely monitoring this fluid and fast-moving situation
Working hard to help our employees, customers and users stay
connected and safe
At this stage, it's too early to predict how usage levels will
develop in the short term and settle once the outbreak subsides
Focused on ensuring global platform capacity remains comfortably
above demand level
Amplified inbound approaches from companies that are struggling
with VoIP-based conferencing solutions, but currently unclear how
many will switch to LoopUp
-- Reallocated approximately GBP1 million of commercial costs
towards an intended similar increase in investment in product
development to accelerate our roadmap for the professional services
market. Therefore, as previously indicated, we guide towards:
12 sales pods in FY2020
Product development spend of approximately GBP6 million in
FY2020
Outlook
-- We are confident in our ability to achieve continued strong
growth in our core professional services target market, driven by
our differentiated competitive strategy and product positioning
-- We are also confident at this point in our ability to meet market expectations for FY2020
-- There are many dimensions of uncertainty at this early stage
of the year that could impact full year FY2020 results and we will
keep the market updated accordingly
(3) Please note: in this financial year, we have evolved our key
unit economics metrics to align closer with SaaS norms. All evolved
metrics are provided for FY2017 and FY2018 also to provide
comparability with previous metrics
(4) Gross Revenue Churn measures the full-year revenue in year
X-1 that is deemed lost from accounts that fall to less than 5% of
historic levels in year X, divided by the revenue in year X-1
(5) KBCM Technology Group (formerly Pacific Crest Securities)
survey of 424 SaaS companies, conducted in July 2019 for 2018
data
(6) Net Revenue Retention measures month-on-month revenue
changes in accounts that are more than 4 months old, compounded to
form an annualised number
(7) New Customer CAC Ratio measures the fully-loaded sales and
marketing cost to acquire GBP1 of new customer ARR
Steve Flavell and Michael Hughes, co-CEOs of LoopUp Group,
commented:
"It has been an important year in the evolution of our business.
The progression of key business metrics has led us to sharpen our
focus on serving and further strengthening our position within the
Professional Services market. We have taken decisive action by
reallocating cost in a way that will allow us to accelerate our
product roadmap for the Professional Services market while
retaining a strong and focused commercial team.
"Despite short-term challenges to the business in 2019, the
landscape has changed dramatically with the recent migration
towards large-scale working from home. We are working intently to
support our customers and helping to keep them connected during
this uncharted period, as well as ensuring that our platform
capacity remains comfortably ahead of very fluid demand.
"We continue to monitor the situation closely and are well
positioned to make a difference to the business community we serve,
responding to both the immediate challenges presented by Covid-19,
as well as our longer term objectives to provide a product
experience that encourages more effective remote communications and
responsible corporate travel."
For further information, please contact:
LoopUp Group PLC via FTI
Steve Flavell, co-CEO
+44 (0) 207 886
Panmure Gordon (UK) Limited 2500
Dominic Morley / Alina Vaskina (Corporate
Finance)
Erik Anderson (Corporate Broking)
+44 (0) 207 260
Numis Securities Limited 1000
Simon Willis / Jonny Abbott (Corporate Finance)
+44 (0) 203 727
FTI Consulting, LLP 1000
Matt Dixon / Emma Hall / Jamille Smith / Shamma
Kelly
About LoopUp Group plc
LoopUp (LSE AIM: LOOP) is a premium remote meetings solution.
LoopUp helps technology leaders to unlock the true potential of
remote meetings in their organisations by combining simple,
progressive software with best-in-class audio reliability. Over
2,000 organisations worldwide trust LoopUp's award-wining SaaS
solution with their remote meetings, including 20 of the world's
top-100 law firms, 24 of the world's top-100 private equity firms,
and 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, Atlanta, 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 .
Notes:
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Chief Executive Officers' Business Review
This review of the business:
-- Puts a spotlight on the underlying strategic direction of the business
-- Discusses some of the more immediate-term factors impacting the business
Increasing strategic focus on Professional Services segments
FY2019 throws a spotlight on the Professional Services market
for remote meetings, where LoopUp's competitive value proposition
is strongest, and where the business is increasingly focusing its
commercial and product development resources.
Professional Services sectors represent approximately $2 billion
of the $7 billion global market, including law, investment banking
and corporate finance; private equity and venture capital, asset
and fund management, consulting, accounting, insurance, marketing
and advertising, PR and media, recruiting, and property.
Organic LoopUp growth in Professional Services - in terms of
active users, minutes and revenue - has materially outpaced organic
growth in the business as a whole during FY2019, as our
differentiation becomes more apparent in that segment and as larger
competitors continue to focus on the broader market.
LoopUp Active LoopUp Minutes LoopUp Revenue
User 9 (millions) 10
('000) (GBP million)
------------------- ------------------- -------------------
2017 2018 2019 2017 2018 2019 2017 2018 2019
----- ----- -----
Professional
Services 25.6 33.4 41.2 156 199 237 9.1 12.1 13.6
----- ----- ----- ----- ----- ----- ----- ----- -----
Other 21.2 22.5 20.4 180 186 154 8.7 9.2 7.6
----- ----- ----- ----- ----- ----- ----- ----- -----
Total 46.8 55.9 61.6 336 385 391 17.8 21.4 21.2
Active users grew by 24% in Professional Services versus 10%
overall; minutes grew by 19% in Professional Services versus 1%
overall; and revenue grew by 12% in professional services versus a
1% decline overall.
The Professional Services market has distinctly different needs
and priorities from the remote meetings market as a whole. The main
factor is the prevalence and importance of external guests on their
meetings, often the most important participants on the call.
Conference calls and remote meetings have become the lifeblood of
critical day-to-day client and adviser-to-adviser
communications.
A best-in-class product for the Professional Services market,
therefore, looks quite different to a leading product for the
broader enterprise market, where internal team calls are far more
dominant:
-- VoIP audio is less reliable for external guests over the
public internet than for internal guests over well-managed
corporate networks. Reliable audio quality is paramount for most
Professional Services firms and so LoopUp chooses not to permit it.
By contrast, VoIP audio makes eminent sense for products targeting
the market as a whole.
-- Software downloads/installs can be problematic for external
guests due to security permissions, whereas IT teams can
pre-install the software for internal users. Given the importance
of the external guest experience for Professional Services firms,
LoopUp chooses to avoid any install as part of the c ore guest
experience. By contrast, nearly all products targeting the market
as a whole understandably choose differently.
-- External guests will often be unfamiliar with the product
versus internal users who use it every day. LoopUp therefore
chooses to keep its product feature-lite and incredibly simple for
the Professional Services market. By contrast, nearly all products
targeting the market as a whole choose differently as they seek to
accommodate quite varied departmental use cases.
(8) Source: Wainhouse Research data and discussions
(9) A user who has used the LoopUp product as host over the
prior 3-month period
(10) At FY2019 constant currency
In summary, LoopUp is optimising its value proposition and
product experience for the distinct needs of the $2 billion
Professional Service market, rather than competing head-to-head
with its considerably larger competitors for the market as a
whole.
Key LoopUp unit economics metrics
We have evolved our key LoopUp unit economics metrics to align
closer with SaaS norms and industry standards, and given the
change, we provide three years of backward-looking data where
possible.
1) Gross Revenue Churn - measuring the lost revenue impact of
customers that move away from LoopUp to another provider
2) Net Revenue Retention - measuring all revenue changes, both
positive and negative, in accounts that are more than 4 months'
old
3) New Customer CAC Ratio - measuring the fully-loaded sales and
marketing cost to acquire GBP1 of new customer ARR
Gross Revenue Net Revenue New Customer
Churn (%) 11 Retention (%) CAC Ratio (GBP)
12
------------------- ------------------- ---------------------
2017 2018 2019 2017 2018 2019 2017 2018 2019
----- ----- ------
Professional
Services 6.8 6.2 5.6 112 107 103 N/A N/A 0.96
----- ----- ----- ----- ----- ----- ------ ------ -----
Other 11.5 8.6 14.4 101 96 74 N/A N/A 2.43
----- ----- ----- ----- ----- ----- ------ ------ -----
Total 8.3 7.4 9.0 107 103 93 1.02 1.08 1.38
SaaS Benchmark
13 12.7 103 1.34
This data further emphasises our stronger performance in the
Professional Services market, where all three metrics compare
favourably with SaaS benchmarks, notwithstanding the macro
headwinds that the business faced in FY2019.
More immediate-term factors impacting the business
During FY2019, there was a behavioural 8.8% year-on-year decline
in minutes per active LoopUp user, driven by a mix of macro
conditions and competition. From extensive discussions with our
Professional Services customer base, we believe that macro
conditions were indeed the primary driver, where the effects were
broadly in line with changes in primary financial activity such as
M&A transactions and IPOs. From discussions with our customer
base in other sectors, we believe the impact was more a mix of
macro and competitive effects. These findings are in line with the
metrics above. Please also note that there was a similar effect in
the MeetingZone Audio base.
The MeetingZone transition project, while fundamentally
successful operationally, led to certain intermittent service
issues during November and early December 2019. While all issues
have been fully resolved since the end of last year, we were
concerned that these issues might lead to unexpected churn in H1
2020, and we did indeed see a little more churn than normal in
January and February 2020.
However, both of the above effects are now being overshadowed by
the ma terial increase in volumes across our global platform during
March 2020, driven by the move towards home-working associated with
the Covid-19 outbreak. This is a fluid and fast-moving situation,
which we are monitoring closely. At this early stage, it is too
early to predict how usage levels will develop in the short term,
how long this large-scale working from home will continue for, and
indeed where it will settle once the outbreak subsides. We are also
experiencing amplified inbound approaches from companies that are
struggling with VoIP-based conferencing solutions, although it is
currently unclear how many will switch to LoopUp. We are very
focused on supporting our customers during this challenging period
and ensuring that our platform capacity remains comfortably above
demand levels.
(11) Gross Revenue Churn measures the full-year revenue in year
X-1 that is deemed lost from accounts that fall to less than 5% of
historic levels in year X, divided by the revenue in year X-1
(12) Net Revenue Retention measures month-on-month revenue
changes in accounts that are more than 4 months old, compounded to
form an annualised number
(13) KBCM Technology Group (formerly Pacific Crest Securities)
survey of 424 SaaS companies, conducted in July 2019 for 2018
data
Other business units
In Q2 2019, we relaunched 'Event by LoopUp', which emphasises
the role played by its account managers and highly skilled event
call operators in order to differentiate its service offering in
the market. The business generated GBP2.2 million of revenue in
FY2019 (FY2018: GBP1.4 million), and having now expanded operations
to the US market, we expect to see further growth during
FY2020.
In Q4 2019, we essentially completed the transition of
MeetingZone Audio conferencing customers over to the LoopUp
platform in MeetingZone's main UK, US and German geographies,
leaving just Sweden to follow during FY2020. MeetingZone Audio
revenue was GBP8.3 million in FY2019 (FY2018: GBP6.0 million),
including both transitioned and untransitioned customers.
In Q2 2019, we rebranded MeetingZone's former Microsoft practice
to 'Enablit'. While not in the world of remote meetings
specifically, Enablit's platform integrates with Microsoft Teams
(and Skype for Business) implementations to provide customers with
competitively-priced and reliably-operated telecommunications
termination. The business achieved revenue of GBP2.8 million in
FY2019 (FY2018: GBP1.6 million) and we anticipate further growth in
FY2020.
Our Cisco (WebEx) resale business achieved revenue of GBP8.1
million in FY2019 (FY2018: GBP4.7 million). During FY2020, our core
focus in this business unit will shift somewhat to driving greater
product adoption and upsell opportunities in this customer baser,
as well as continuing to seek new business opportunities.
Steve Flavell Michael Hughes
co-CEO co-CEO
Chief Financial Officer's Review
The Group's results for FY2019 include a full year of activity
from the acquired MeetingZone business, compared to only seven
months in FY2018.
Operating results
Group revenues increased by 24% year on year to GBP42.5 million.
Revenue from Group meetings services (excluding our WebEx resale
business and 'Enablit' add-on services for Microsoft Skype for
Business and Teams) grew 13% to GBP31.6 million.
The Group's blended gross margin reduced from 69.9% in FY2018 to
66.4% in FY2019, as a result of having the full year of non-core
revenues that operate at a lower gross margins. Core LoopUp margins
increased from 78% to 79% as a result of our continuing efforts to
reduce costs of supply as our volumes increase. We expect to see
further improvements in this margin during FY2020.
The Group's overhead base increased by 34% over the prior year.
This was due to a combination of a full year of MeetingZone
overheads, and the impact of the investments in sales and
operational staff made during FY2018 and early FY2019. Average
headcount increased by 40% to 269 full time employees.
Group EBITDA (before exceptional non-recurring items) was GBP6.4
million in FY2019 compared to GBP7.6 million in FY2018.
In order to reinforce the LoopUp's focus on the Professional
Services market, the Group has increased its product development
spend from GBP4.3 million in FY2018 to GBP5.0 million in FY2019.
The resulting amortisation charge is lower at GBP3.8 million
(FY2018: GBP2.6 million) due to the timing of completion of
individual development projects. There were no issues with
impairment of development projects in either year. The intended
extra investment in product development announced earlier this year
would result in spend rising towards approximately GBP6.0 million
in FY2020.
The implementation of the new leasing standard, IFRS 16 has
resulted in an increased depreciation charge of GBP0.8 million -
costs which would have previously been included in administrative
expenses.
The Group has recognised a further exceptional charge of GBP0.5
million in FY2019, of which GBP0.3 million relates to the cost
reallocation project announced earlier this year, and GBP0.2
million relates to a MeetingZone lease that is now surplus to
requirements and hence considered onerous.
A full year of amortisation of the intangible assets acquired
with MeetingZone in FY2019 has been included, resulting in a GBP2.2
million charge (FY2018: GBP1.3 million). The Directors have
reviewed the valuation of these assets, particularly given the
Group's current share price, and are confident that no impairment
charge is required.
The Group continues to receive a tax benefit from its product
development activities, and we expect to submit a claim for
approximately GBP1.4 million of tax cash credit for FY2019, in
addition to the GBP1.1m successfully claimed for FY2018. This is
partly offset on the income statement by taxes incurred overseas,
of which GBP0.4 million relates to prior year tax liabilities.
Assets and cash flows
The implementation of IFRS 16 has resulted in a grossing up of
the group balance sheet of GBP3.2 million of which GBP2.3 million
is non-current.
The Group's operating cash flow (after capital expenditure and
product development spend) was a positive GBP0.1 million for FY2019
(FY2018: GBP0.6 million). After debt and interest repayments, the
Group's cash balance fell by GBP2.6 million to end FY2019 at GBP3.0
million.
Management has conducted detailed scenario modelling and we are
comfortable with respect to both the Group's near-term cash
requirements and our ability to operate well within lending
covenants, even in a downside scenario. We also note the
availability of our GBP3 million revolver facility should it be
required.
The Group has over GBP13 million of accumulated tax losses
available for relief against future taxable profits. The Directors
have decided not to recognise a deferred tax asset on these losses
at this time, as the significant investment being made in product
development is still generating tax losses in the UK. This will be
reviewed again in FY2020.
Simon Healey
CFO
Unaudited Consolidated Statement of Comprehensive income
For the year ended 31 December
2019
2019 2018
Note GBP000 GBP000
Revenue 42,541 34,213
Cost of sales (14,304) (10,314)
--------- ---------
Gross profit 2 28,237 23,899
Adjusted administrative expenses(i) (21,825) (16.246)
--------- ---------
Adjusted EBITDA (ii) 6,412 7,653
Depreciation (1,475) (546)
Amortisation of development costs (3,777) (2,558)
Adjusted operating profit (iii) 1,160 4,549
Non-recurring transaction costs - (994)
Exceptional reorganisation costs (509) (1,223)
Amortisation of acquired intangibles (2,210) (1,289)
Share-based payments charges (588) (191)
Operating profit / (loss) (2,147) 852
Finance costs (647) (467)
--------- ---------
Profit / (loss) before income
tax (2,794) 385
Income tax 789 857
--------- ---------
Profit / (loss) for the year (2,005) 1,242
--------- ---------
Currency translation gain / (loss) (397) 48
--------- ---------
Total comprehensive income /
(loss) for the year attributable
to the equity holders of the
parent (2,402) 1,290
========= =========
Earnings / (loss) per share (pence): 3
Basic (3.6) 2.5
Diluted (3.3) 2.4
========= =========
(i) Total administrative expenses excluding depreciation,
amortisation of development costs and acquired intangibles,
non-recurring transaction costs, exceptional reorganisation costs
and share-based payments charges.
(ii) Adjusted EBITDA is operating profit stated before
depreciation, amortisation of development costs and acquired
intangibles, non-recurring transaction costs, exceptional
reorganisation costs and share-based payments charges.
(iii) Before amortisation of other intangible assets,
non-recurring transaction costs, exceptional reorganisation costs
and share-based payments charges.
Unaudited Consolidated Statement of Financial Position
As at 31 December 2019
2019 2018
GBP000 GBP000
Assets:
Property, plant and equipment 2,737 2,168
Right of use assets 3,228 -
Development costs 9,104 7,880
Goodwill and other intangibles 60,604 62,816
Total non-current assets 75,673 72,864
--------- ---------
Trade and other receivables 9,321 9,326
Cash and cash equivalents 3,000 5,581
Current tax 1,631 1,153
Total current assets 13,952 16,060
--------- ---------
Total assets 89,625 88,924
--------- ---------
Liabilities:
Trade and other payables (5,409) (4,487)
Accruals and deferred income (2,686) (2,709)
Lease liabilities (862) -
Borrowings (1,700) (1,700)
Total current liabilities (10,657) (8,896)
--------- ---------
Net current assets 3,295 7,164
Non-current liabilities:
Borrowings (12,750) (14,450)
Lease liabilities (2,366) -
Deferred tax liability (5,713) (5,709)
--------- ---------
Total non-current liabilities (20,829) (20,159)
--------- ---------
Total liabilities (31,486) (29,055)
Net assets 58,139 59,869
========= =========
Equity
Share capital 276 276
Share premium 60,588 60,504
Other reserve 12,691 12,691
Foreign currency translation
reserve (2,332) (1,935)
Retained loss (13,084) (11,667)
--------- ---------
Shareholders' funds attributable
to equity owners of parent 58,139 59,869
========= =========
Unaudited Consolidated Statement of Changes in Equity
For the year ended 31 December 2019
Share Share Other Foreign Retained Shareholders
capital premium reserve currency profit funds/
translation / (loss) (deficit)
reserve attributable
to equity
owners
of parent
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
As at 1 January
2018 210 12,637 12,691 (1,983) (13,100) 10,455
--------- --------- --------- ------------- ---------- --------------
Profit for the year - - - - 1,242 1,242
Other comprehensive
income - - - 48 - 48
Total comprehensive
profit / (loss)
for the year - - - 48 1,242 1,290
--------- --------- --------- ------------- ----------
Transactions with
owners of parent
in their capacity
as owners:
Equity share-based
payment compensation - - - - 191 191
Share issues 66 47,867 - - - 47,933
--------- --------- --------- ------------- ---------- --------------
As at 31 December
2018 276 60,504 12,691 (1,935) (11,667) 59,869
--------- --------- --------- ------------- ---------- --------------
As at 1 January
2019 276 60,504 12,691 (1,935) (11,667) 59,869
--------- --------- --------- ------------- ---------- --------------
Loss for the year - - - - (2,005) (2,005)
Other comprehensive
income - - - (397) - (397)
Total comprehensive
profit for the year - - - (397) (2,005) (2,402)
--------- --------- --------- ------------- ---------- --------------
Transactions with
owners of parent
in their capacity
as owners:
Equity share-based
payment compensation - - - - 588 588
Share issues - 84 - - - 84
As at 31 December
2019 276 60,588 12,691 (2,332) (13,084) 58,139
--------- --------- --------- ------------- ---------- --------------
Unaudited Consolidated Statement of Cash Flows
For the year ended 31 December 2019
2019 2018
GBP000 GBP000
Net cash flows from operating activities
Profit / (loss) before income tax (2,794) 385
Non-cash adjustments
Depreciation and amortisation 7,464 4,393
Impairment of intangible fixed - -
assets
Share-based payments charges 588 191
Interest payable 647 467
Working capital adjustments
(Increase) / decrease in trade
and other receivables 80 (651)
Increase / (decrease) in trade
and other payables 737 (359)
Tax received 401 836
Net cash generated by operations 7,123 5,262
-------- ---------
Cash flows from investing activities
Purchase of property, plant and
equipment (2,043) (354)
Addition of intangible assets (5,001) (4,296)
Payment for acquisition of subsidiary,
net of cash acquired - (61,579)
Net cash used in investing activities (7,044) (66,229)
-------- ---------
Cash flows from financing activities
Proceeds of borrowings - 17,000
Proceeds from share issue net of
issue costs 84 47,933
Repayment of loans (1,700) (850)
Interest and finance fees paid (647) (467)
Net cash generated from financing
activities (2,263) 63,616
-------- ---------
Net increase in cash and equivalents (2,184) 2,649
Cash and cash equivalents brought
forward 5,581 2,902
Effect of foreign exchange rate
changes (397) 30
-------- ---------
Cash and cash equivalents carried
forward 3,000 5,581
======== =========
Notes to the Financial Statements
1. Background and basis of preparation
The principal activity of the Group is the provision of a
software-as-a-service (SaaS) solution for remote business
meetings.
LoopUp Group plc ('the Group') is a limited liability 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.
The unaudited summary financial information set out in this
announcement does not constitute the Group's consolidated statutory
accounts for the years ended 31 December 2019 or 31 December 2018.
The results for the year ended 31 December 2019 are unaudited. The
statutory accounts for the year ended 31 December 2019 will be
finalised on the basis of the financial information presented by
the Directors in this preliminary announcement, and will be
delivered to the Registrar of Companies in due course. The
statutory accounts are subject to completion of the audit and may
change should a significant adjusting event occur before the
approval of the Annual Report.
The statutory accounts for the Group for the year ended 31
December 2018 have been reported on by the Group's auditors and
delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified and did not include references to
any matter which the auditors drew attention by way of emphasis
without qualifying their report and did not contain statements
under section 498(2) or (3) of the Companies Act 2006.
The preliminary announcement for the year ended 31 December 2019
was approved by the Board for release on 19 March 2020.
Impact of IFRS 16: Leases
The new leasing standard came into effect on 1 January 2019. The
main impact of the standard is to capitalise the Group's office
leases as "right-of-use assets" within Property, Plant and
Equipment on the Statement of Financial Position, with
corresponding liabilities representing the commitment to fulfil
those lease obligations. The assets are then depreciated over the
life of the lease and a notional interest charge is made against
the liability.
The standard allows for different transition options and the
Group has adopted the Modified Retrospective: Asset equals
liability approach, resulting in the Group adopting the standard
from 1 January 2019 with no adjustment to reserves or comparative
numbers. On adoption, the Group's assets increased by GBP3.2m with
liabilities increasing by the same value. The group has elected not
to recognise a lease liability for short term leases (leases of
expected term of 12 months or less) or for leases of low value.
Payments made under such leases are expensed on a straight-line
basis.
For the year to 31 December 2019 reported EBITDA has increased
by GBP0.86m as a result of rental costs no longer being charged to
overhead expenses. Additional depreciation costs of GBP0.80m and a
finance charge of GBP0.06m have been incurred.
The adoption of this new Standard has resulted in the Group
recognising a right-of-use asset and related lease liability in
connection with all former operating leases except for those
identified as low-value or having a remaining lease term of less
than 12 months from the date of initial application.
The following is a reconciliation of total operating lease
commitments at 31 December 2018 to the lease liabilities recognised
at 1 January 2019:
GBP000
---------------------------------------------------- -------
Total operating lease commitments disclosed at
31 December 2018 2,560
Less: leases with remaining lease terms less than
12 months (61)
Less: exchange and other adjustments (100)
Add: new leases entered into in the current period 2,082
-------
Operating leases before discounting 4,481
Discounted using incremental borrowing rate (458)
Depreciation in the period (795)
Total lease liability recognised under IFRS 16
at 31 December 2019 3,228
---------------------------------------------------- -------
Of which GBP862,000 are current liabilities and GBP2,336,000 are
non-current liabilities.
2. 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). The main segment is LoopUp Group meetings
services revenue, which represents revenue generated from providing
customers access to the LoopUp conferencing platform as well as the
acquired MeetingZone conferencing platform. Third party and other
services consist of revenues from the resale and usage of
externally designed web conferencing platforms, along with related
hardware and consultancy sales.
Segmental revenues are external and there are no material
transactions between segments.
The Group's largest customer represented less than 5% of total
revenue in all periods.
No segmental balance sheet was presented to the CODM.
The Group's revenue disaggregated by primary geographical
markets is as follows:
LoopUp Group Third party
meetings and other
GBP'000 services services Total
---------------------------------- ------------- ------------ -------
For the 12 months to 31 December
2019:
UK 16,233 6,311 22,544
Other EU 4,046 1,728 5,774
North America 10,800 2,853 13,653
Rest of world 570 - 570
---------------------------------- ------------- ------------ -------
31,649 10,892 42,541
---------------------------------- ------------- ------------ -------
For the 12 months to 31 December
2018:
UK 13,455 4,113 17,568
Other EU 3,555 970 4,525
North America 10,562 1,214 11,776
Rest of world 344 - 344
---------------------------------- ------------- ------------ -------
27,916 6,297 34,213
---------------------------------- ------------- ------------ -------
The Group's revenue disaggregated by pattern of revenue
recognition is as follows:
LoopUp Group Third party
meetings and other
GBP'000 services services Total
---------------------------------- ------------- ------------ -------
For the 12 months to 31 December
2019:
Services transferred at a point
in time 31,649 1,225 32,874
Services transferred over time - 9,667 9,667
---------------------------------- ------------- ------------ -------
31,649 10,892 42,541
---------------------------------- ------------- ------------ -------
For the 12 months to 31 December
2018:
Services transferred at a point
in time 27,916 920 28,836
Services transferred over time - 5,377 5,377
---------------------------------- ------------- ------------ -------
27,916 6,297 34,213
---------------------------------- ------------- ------------ -------
The Group's gross profit disaggregated by segment is as
follows:
12 months 12 months
to 31 December to 31 December
GBP'000 2019 2018
-------------------------------- ---------------- ----------------
LoopUp Group meetings services 25,016 21,845
Third party and other services 3,221 2,054
--------------------------------- ---------------- ----------------
28,237 23,899
-------------------------------- ---------------- ----------------
The Group's non-current assets disaggregated by primary
geographical markets are as follows:
12 months 12 months
to 31 December to 31 December
GBP'000 2019 2018
--------------- ---------------- ----------------
UK 74,648 72,566
Other EU 62 10
North America 1,410 259
Rest of world 11 29
---------------- ---------------- ----------------
76,131 72,864
--------------- ---------------- ----------------
3. 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.
12 months 12 months
to to
31 December 31 December
2019 2018
------------------------------------- ------------- -------------
Profit / (loss) attributable
to equity holders (GBP000) (2,005) 1,242
Adjusted profit attributable
to equity holders (GBP000) (1) 1,302 4,939
Weighted average number of ordinary
shares in issue (000) 55,208 49,563
Basic earnings per share (pence):
* Basic adjusted (1) 2.4 10.0
- Basic (3.6) 2.5
====================================== ============= =============
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.
12 months 12 months
to to
31 December 31 December
2019 2018
-------------------------------------- ------------- -------------
Weighted average number of ordinary
shares in issue ('000) 55,208 49,563
Adjustments for share options
('000) 5,058 3,583
--------------------------------------- ------------- -------------
Weighted average number of potential
ordinary shares in issue ('000) 60,266 53,146
--------------------------------------- ------------- -------------
Diluted earnings per share (pence):
* Diluted adjusted (1) 2.2 9.3
- Diluted (3.3) 2.4
======================================= ============= =============
(1) Calculated using profit attributed to equity holders
adjusted for non-recurring transaction costs, exceptional
reorganisation costs, amortisation of acquired intangibles and
share based payment charges.
4. Dividends
The Directors do not recommend the payment of a dividend (2018:
GBPnil) .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR GLGDXUGBDGGC
(END) Dow Jones Newswires
March 19, 2020 03:00 ET (07:00 GMT)
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