TIDMLOOP
RNS Number : 8043Y
LoopUp Group PLC
08 March 2017
LOOPUP GROUP PLC
("LoopUp Group" or the "Group")
Preliminary results for the year ended 31 December 2016
LoopUp Group plc (LSE AIM: LOOP), the premium remote meetings
company, today announces its unaudited preliminary results for year
ended 31 December 2016.
Financial Highlights
FY2016 FY2015
Year-on-year
GBP million (unaudited) (audited) growth
---------------------------- --- ------------- ----------- -------------
LoopUp Revenue(1) 12.8 9.2 39%
Total revenue 13.6 10.1 34%
Gross profit 10.3 7.5 37%
Gross profit margin (%) 75.9% 74.5%
EBITDA(2) 2.1 1.0 102%
Operating profit / (loss) 0.4 (0.4)
Diluted earnings per share
(pence) 0.5 (2.4)
--------------------------------- ------------- ----------- -------------
1) LoopUp Revenue is revenue from the LoopUp product and
associated value-added add-on capabilities, and so excludes
discontinuing BT technology licensing revenue
2) Earnings Before Interest, Taxation, Depreciation and Amortisation.
-- LoopUp Revenue grew 39% in FY2016, an increase in growth rate
from 36% in FY2015 and 37% in FY2014.
-- FY2016 EBITDA increased by 102% to GBP2.1 million (FY2015: GBP1.0 million).
-- Operating profitability was achieved with maiden profit of
GBP0.4m (FY2015: GBP0.4 million loss).
-- As at 31 December 2016, the Group's net cash position was GBP2.2 million.
-- Customer concentration remained well diversified with the
largest single customer representing just 2.4% of total LoopUp
Revenue (FY2015: 2.9%).
-- The Group maintained its track record of 'negative net churn'
- i.e. net growth - in its established base of customers that are
at least one year old. Net growth was 8.3% (FY2015: 6.7%).
-- Continued investment in the Group's team-based 'Pods' for new
business acquisition led to an average of 6.2 Pods during the
period, each costing GBP490,000 on a fully-loaded basis (FY2015:
GBP410,000). Each Pod returned new annual recurring revenue growth
of GBP509,000 (FY2015: GBP440,000), which would have an expected
lifetime of approximately 20 years based on the Group's customer
loss rate of just 5% in FY2016 (FY2015: 6%).
-- The Group generated 41% of LoopUp Revenue from the United
Kingdom, 46% from the United States, 11% from continental Europe
and 2% from the rest of world.
-- The Group paid down a final debt installment of GBP0.3m on 31
January 2017, leaving the Group's balance sheet debt-free.
Operational Highlights
-- In August 2016, the Group achieved a successful placing of
GBP8.5 million of new equity and was admitted to the AIM market of
the London Stock Exchange.
-- Lady Barbara Judge CBE was appointed non-executive chairman at IPO.
-- In November 2016, the Group released a major new product
version, which further enhanced its streamlined and intuitive user
experience.
-- New customer engagement with differentiated features of the
LoopUp product continued to increase. New 2016-cohort users are
joining 75% of their meetings by having LoopUp dial out to them
(FY2015: 55%) rather than the traditional method of 'dialing in',
and 79% of that group are using LoopUp's Outlook add-in and/or
mobile app.
-- The Group has formed a new marketing team, which has launched
a new corporate website incorporating re-designed LoopUp branding
and refreshed messaging and positioning.
-- The Group achieved ISO 27001 certification in information
security management, emphasising the priority given to our
customers' personal and confidential information.
Steve Flavell, co-CEO of LoopUp Group, commented,
"We're very pleased to report strong business performance and a
positive outlook in our first set of annual results as a public
company. The 39% growth in LoopUp Revenue has exceeded FY2014 and
FY2015 growth rates, gross margins have improved, EBITDA has
doubled, and key underlying business metrics have remained
positive.
"Our successful IPO on the AIM market of the London Stock
Exchange in August was a major milestone for the Group. It has
significantly strengthened our balance sheet and has enabled us to
pursue our growth strategies to expand our proven distribution
model, introduce inbound marketing, and continue to innovate our
product that we believe offers a best-in-class experience for our
customers' important day-to-day remote meetings.
"Looking ahead into 2017, we continue to see strong demand for
the LoopUp product and are confident in our ability to deliver
future growth."
For further information, please contact:
LoopUp Group PLC via FTI Consulting
Steve Flavell, Co-CEO
+44 (0) 207 886
Panmure Gordon (UK) Limited 2500
Dominic Morley / Alina Vaskina / William Wickham
(Corporate Finance)
Erik Anderson / Amy Sarra (Corporate Broking)
+44 (0) 203 727
FTI Consulting, LLP 1000
Matt Dixon / Chris Lane / Roger Newby
About LoopUp Group plc:
LoopUp (LSE AIM: LOOP) is a premium remote meetings solution.
Streamlined and intuitive, LoopUp is built for business users and
delivers the quality, security and reliability required in the
enterprise. One-click screen sharing and integration with tools
business people use every day, like Outlook(TM), make it easy for
LoopUp users to collaborate in real time. LoopUp's award-winning
SaaS solution doesn't overwhelm users with features, and doesn't
require training. Over 2,000 enterprises worldwide, including
Travelex, Kia Motors America, Planet Hollywood, National
Geographic, and Subaru trust LoopUp with their remote meetings.
The Group is headquartered in London, with offices in San
Francisco, New York, Boston, Hong Kong and Barbados, and is listed
on the AIM market of the London Stock Exchange (LOOP). For further
information, please visit: www.loopup.com.
Market abuse regulation:
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Co-CEOs' Statement and Performance Review
2016 was a landmark year in our mission to make important,
day-to-day remote business meetings a fundamentally better
experience for business people, as well as a more secure means of
collaboration for their companies. The year combined
transformational change in our corporate structure with yet another
year of consistent and efficient growth in our operations.
An IPO for future growth
The centrepiece of the year was our August float on the AIM
market of the London Stock Exchange. This was a major milestone for
the Group, giving us strong balance sheet foundations for our next
phase of business growth. Given the general market uncertainty and
summer holiday season, we were delighted by the level of both
institutional and retail investor support as the first technology
float in the UK following the EU Referendum.
Continued strong, efficient and profitable growth
In the business, we extended our consistent track record of
strong top line growth at healthy gross margins, developed our
market reputation as a premium option for discerning conference
callers, and continued to invest in our global team.
LoopUp Revenue grew by 39% from GBP9.2 million in FY2015 to
GBP12.8 million in FY2016. This followed growth of 36% in FY2015
and 37% in FY2014. During the year, we brought in increasingly
large customers across a broad range of industry sectors, with
professional services remaining a sweet spot given the valuable
visibility and security brought by LoopUp to their daily client
interactions.
Our customer base remains well diversified, with the largest
single customer representing just 2.4% of total LoopUp Revenue. Our
top 100 customers accounted for 58% of LoopUp Revenue, and the top
500 accounted for 90%. The Group generated 41% of LoopUp Revenue
from the United Kingdom, 46% from the United States, 11% from
continental Europe and 2% from the rest of world. Our established
revenue base in the United States is an important foundation for
future growth as this geographic market accounts for over 59% of
global demand.
Furthermore, in our established customer base, we've once again
demonstrated 'negative net churn'. Taking into account all losses,
shrinkages and growths, LoopUp Revenue from all customers of at
least one year old actually net grew in FY2016 by 8.3% (FY 2015:
6.7%).
Following our IPO, we also invested in the growth of our global
team. Staff totaled 115 by the year-end, up from 96 at mid-year.
This accelerated investment has been made while continuing to meet
the Board's targets for profit growth. Our gross margins improved
to 75.9% from 74.5% in FY2015. Volume pricing for increasing large
customers that we're now serving were more than offset by lower
negotiated telecommunications costs and higher revenue per minute
served from value added capabilities that the user is naturally
guided to in the product. EBITDA doubled over the prior year and
the Group turned a profit at an operating level.
Progress against our strategic initiatives
We made good progress against each of our three key strategic
initiatives:
1. Continuing to innovate our premium product
At the heart of our corporate strategy is our product. We
compete first and foremost on our product and the differentiated
and premium experience it provides to customers on their important,
day-to-day remote meetings. In the world of remote meetings, adding
value has all too often come to mean slashing prices or introducing
a laundry list of specialist features. At LoopUp, it means
delivering an experience that exceeds our customers' expectations
and that they can count on without fail.
During 2016 we launched a major new version of our web user
interface, which further enhanced its streamlined and intuitive
user experience. We introduced an online fulfilment capability,
which enables inbound prospects to self-serve with a free trial
account and ongoing payment by credit card. We also opened a new
data centre in Sydney, and interconnected all four of our data
centres - London, Chicago, Hong Kong and Sydney - into a single
global operating architecture to optimise global service
quality.
2. Expanding our proven distribution model
Once again, our team-based 'Pods' organisational structure for
new business acquisition continued to operate to incredibly
efficient underlying unit economics. During FY2016 period, each of
the 6.2 Pods delivered an average of GBP509,000 new annual
recurring revenue at a fully-loaded cost of GBP490,000. The Group's
customer loss rate of just 5% would suggest a 20-year expected
lifetime over which this revenue will recur.
The recruitment strategy of exclusively bringing new graduates
into Pods, together with a focus on process and team-based
incentivisation, combine to make Pods a highly scalable and
repeatable template for future growth. We continued that investment
during 2016, leading to 7.25 Pods by year end. As indicated at IPO,
we plan to increase the number of Pods to an average of at least
eight in 2017 and an average of at least 11 in 2018.
3. Introduce inbound marketing into our commercial
operations
To date, the Group's growth has been achieved in the absence of
inbound marketing activity and spend. New business has been
generated through customer referrals, word-of-mouth, and targeted
outreach to prospects. Since the IPO, we have hired four marketing
professionals experienced in corporate communications, content and
digital marketing, and graphic design. They have made fast
foundational progress, having already rebranded the company,
refreshed the Group's positioning and messaging, and launched a new
version of our corporate website.
Positive Outlook
We remain focused on helping our customers have a fundamentally
better experience on their important, day-to-day remote meetings.
That's why LoopUp exists. We continue to see strong demand for our
product; we're confident in the experience-led differentiation
we've built into that product over the last 11 years and its
ability to continue to take share from the large players in this
GBP5 billion market. Looking ahead into 2017, we continue to see
strong demand for the LoopUp product and are confident in our
ability to deliver further growth.
Finally, we would like to thank our wonderful LoopUp team. It is
their hard work and passion - day in, day out - that make all this
happen.
Steve Flavell Michael Hughes
co-CEO co-CEO
Chief Financial Officer's Review
I am delighted to present my first financial review since being
formally appointed to the Group's board in August 2016.
2016 was a landmark year for LoopUp. The successful IPO,
combined with continued strong growth and improved profitability
have ensured that the business is in an excellent position going in
to 2017. As planned at IPO, the Group has begun investing some of
the IPO proceeds in sales, marketing and product development
initiatives.
Revenues
Core LoopUp Revenue grew by 39% in 2016 to GBP12.8 million,
which compares to 36% growth in 2015. The Group's non-core
licencing contract with BT generated GBP0.7 million of revenue in
2016, compared to GBP0.9 million in 2015. This contract has now
been terminated, and hence this revenue stream has been treated as
discontinued.
Operating results
The Group has continued to leverage its growth and improved
buying power to drive down the cost of purchased telephony, which
makes up the majority of the cost of sales. As a result, the gross
margin percentage improved from 74.5% in 2015 to 75.9% in 2016.
Administrative expenses grew by 26% in the year, significantly
lower than the rate of revenue growth. The main areas of spend
increases were sales and engineering headcount and early marketing
investment.
The resulting EBITDA rose from GBP1.0 million in 2015 to GBP2.1
million in 2016.
The Group's spend on development costs rose from GBP1.7 million
in 2015 to GBP3.2 million in 2016. The increase represents our
planned investment in the development team together with an
exchange impact of around GBP0.4 million (nearly all this cost is
incurred in US Dollars). These costs are allocated to specific
development projects, which are then amortised once the project is
deemed complete. The impact of this is that the amortisation charge
lags the level of spend at GBP1.4 million for 2016. This charge is
expected to increase and equalise with the level of spend over the
next few years.
The Group achieved an operating profit of GBP0.4 million in
2016, compared to a loss of GBP0.4 million in 2015.
Finance costs of GBP0.7 million were incurred in 2016, relating
to the remaining shareholder loan facility. The loans, being
denominated in US Dollars, gave rise to an exchange loss in 2016 of
GBP1.2 million. Neither of these costs are expected to recur in
2017.
The Group continues to receive a tax benefit from its research
and development activity, and we expect to submit a claim for
GBP0.5 million of tax cash credit for 2016.
Assets and cash flows
The successful IPO in August 2016 enabled the Group to
significantly improve its balance sheet. Before the IPO, the Group
had significant net liabilities position due to its reliance on a
shareholder loan to finance working capital over the prior four
years. This loan stood at GBP10.0 million at the time of the
IPO.
The IPO raised GBP8.5 million of new equity capital for the
business. In addition, the Group was able to capitalise GBP4.5
million of the shareholder loan immediately prior to the IPO. Most
of the remaining loan has been repaid from the proceeds of the IPO,
however strict 'use of funds' regulations required the Group to
ensure that IPO proceeds from EIS/VCT funds were earmarked for
growth and development activities. As such, GBP0.3 million of loan
remained on the balance sheet at the end of 2016, and has since
been repaid in early 2017.
The Group's much improved balance sheet showed GBP7.7 million of
net assets and GBP2.2 million of net cash at the end of 2016. In
addition, the Group has GBP12.6 million of accumulated tax losses
at the end of 2016, which it expects to be able to utilise against
future profits.
Simon Healey
CFO
Unaudited Consolidated Statement of Comprehensive income
For the year ended 31 December
2016
2016 2015
Note GBP000 GBP000
LoopUp Revenue(i) 12,823 9,204
Discontinued licencing revenue 736 901
-------- --------
Total revenue 2 13,559 10,105
Cost of sales (3,265) (2,580)
-------- --------
Gross profit 2 10,294 7,525
Administrative expenses (9,896) (7,878)
-------- --------
Operating profit / (loss) 398 (353)
-------------------------------------- ----- -------- --------
EBITDA(ii) 2,063 1,020
Depreciation (246) (206)
Amortisation of intangible fixed
assets (1,419) (1,251)
Share-based payments charges - -
Other operating income - 84
-------- --------
Operating profit / (loss) 398 (353)
-------------------------------------- ----- -------- --------
Finance costs (684) (733)
-------- --------
Loss before income tax (286) (1,086)
Income tax 484 506
-------- --------
Profit/(loss) for the year 198 (580)
-------- --------
Currency translation loss (1,209) (363)
-------- --------
Total comprehensive income for
the year attributable to the
equity holders of the parent (1,011) (943)
======== ========
Earnings/(loss) per share (pence):
Basic 3 0.6 (2.4)
Diluted 3 0.5 (2.4)
======== ========
(i) LoopUp Revenue is revenue from the LoopUp product and
associated value-added add-on capabilities, and so excludes
discontinuing BT technology licensing revenue.
(ii) EBITDA is operating profit stated before depreciation,
amortisation of intangible fixed assets and share-based payments
charges.
Unaudited Consolidated Statement of Financial Position
As at 31 December 2016
2016 2015
GBP000 GBP000
Assets
Property, plant and equipment 463 342
Intangible assets 4,822 3,030
Total non-current assets 5,285 3,372
--------- ---------
Trade and other receivables 2,802 2,096
Cash and cash equivalents 2,547 402
Current tax 500 483
Total current assets 5,849 2,981
--------- ---------
Total assets 11,134 6,353
--------- ---------
Liabilities
Trade and other payables (1,744) (1,177)
Accruals and deferred income (1,378) (487)
Borrowings (306) (2,206)
Total current liabilities (3,428) (3,870)
--------- ---------
Net current assets/(liabilities) 2,421 (889)
Borrowings - (5,539)
Total non-current liabilities - (5,539)
--------- ---------
Total liabilities (3,428) (9,409)
Net assets/(liabilities) 7,706 (3,056)
========= =========
Equity
Share capital 204 139
Share premium 11,708 -
Other reserves 12,691 12,691
Foreign currency translation
reserve (1,808) (599)
Retained loss (15,089) (15,287)
--------- ---------
Shareholders' funds/(deficit)
attributable to equity owners
of parent 7,706 (3,056)
========= =========
Unaudited Consolidated Statement of Changes in Equity
For the year ended 31 December 2016
Share Share Other Foreign Retained Shareholders'
capital premium reserves currency profit funds/
translation / (loss) (deficit)
reserve attributable
to equity
owners of
parent
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
As at 1 January
2015 139 - 12,691 (236) (14,707) (2,113)
--------- --------- ---------- ------------- ---------- --------------
Loss for the
year - - - - (580) (580)
Other comprehensive
loss - - - (363) - (363)
Total comprehensive
loss for the
year - - - (363) (580) (943)
Share issues - - - - - -
--------- --------- ---------- ------------- ---------- --------------
As at 31 December
2015 139 - 12,691 (599) (15,287) (3,056)
--------- --------- ---------- ------------- ---------- --------------
As at 1 January
2016 139 - 12,691 (599) (15,287) (3,056)
--------- --------- ---------- ------------- ---------- --------------
Profit for the
year - - - - 198 198
Other comprehensive
loss - - - (1,209) - (1,209)
--------- --------- ---------- ------------- ---------- --------------
Total comprehensive
profit /(loss)
for the year - - - (1,209) 198 (1,011)
--------- --------- ---------- ------------- ---------- --------------
Transactions
with owners of
parent in their
capacity as owners:
Share issues
on AIM listing 65 12,935 - - - 13,000
Cost of issue
of equity shares - (1,227) - - - (1,227)
As at 31 December
2016 204 11,708 12,691 (1,808) (15,089) 7,706
--------- --------- ---------- ------------- ---------- --------------
Unaudited Consolidated Statement of Cash Flows
For the year ended 31 December 2016
2016 2015
GBP000 GBP000
Net cash flows from operating
activities
Loss before income tax (286) (1,086)
Non-cash adjustments
Depreciation and amortisation 1,665 1,457
Interest payable 684 649
Working capital adjustments
Increase in trade and other receivables (706) (510)
Increase in trade and other payables 1,468 120
Tax receivable 468 344
Net cash generated from operations 3,293 974
------------ ------------
Cash flows from investing activities
Purchase of property, plant and
equipment (304) (221)
Addition of intangible assets (3,211) (1,742)
Net cash used by investing activities (3,515) (1,963)
------------ ------------
Cash flows from financing activities
Proceeds from borrowings 819 1,704
Decrease in bank overdraft - (64)
Proceeds from share issue 8,500 57
Issue costs in relation to IPO (1,227) -
Repayment of loans (5,404) -
Interest and finance fees paid (21) (14)
Finance lease paid (10) (25)
Net cash generated by financing
activities 2,657 1,658
------------ ------------
Net increase in cash and equivalents 2,435 669
Cash and cash equivalents brought
forward 402 96
Effect of foreign exchange rate
changes (290) (363)
------------ ------------
Cash and cash equivalents carried
forward 2,547 402
============ ============
Notes to the Financial Statements
1. Background and basis of preparation
The parent company ("the Company") of LoopUp Group plc (LSE AIM:
LOOP) was incorporated on 1 February 2016 as Pacific Shelf 1812
Limited, and its name was changed on 11 March 2016 to LoopUp
Limited, and on 8 June 2016 to LoopUp Group Limited. It
re-registered as a plc with the name LoopUp Group plc on 18 August
2016. The Company is a limited liability company domiciled in the
England and Wales, with company number 09980752. Its registered
office is 78 Kingsland Road, London E2 8DP.
On 2 August 2016, the Company acquired the entire issued share
capital of the former parent company of the Group, Ring2
Communications Limited, by way of a share for share exchange. This
share for share exchange qualifies as a common control transaction
and therefore falls outside of the scope of IFRS 3 Business
Combinations. Consequently, an accounting policy has been developed
based on the principles of reverse acquisition accounting. No
goodwill has been recorded and the difference between the Company's
cost of investment and the net assets of the group formerly headed
by Ring2 Communications Limited (now LoopUp Limited) is presented
as deemed consideration within share based payment expenses on
consolidation. The Directors have determined this to be immaterial
to the financial statements and hence have not adjusted the
accounts for this balance. Comparative amounts are restated as if
the combination had taken place at the beginning of the earliest
comparative financial period presented. Accordingly, the
consolidated financial statements present the information as if the
Group had been in existence for the whole of the current and
previous years.
The unaudited summary financial information set out in this
announcement does not constitute the Company's consolidated
statutory accounts for the years ended 31 December 2016 or 31
December 2015. The results for the year ended 31 December 2016 are
unaudited. The statutory accounts for the year ended 31 December
2016 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 Company was incorporated during the year. The statutory
accounts for LoopUp Limited for the year ended 31 December 2015
have been reported on by the Company'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 2016
was approved by the Board for release on 8 March 2017.
2. Segmental information
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).
Segmental revenues are external and there are no material
transactions between segments.
The main segment is LoopUp Revenue which consists of ongoing
contracts to provide customers with access to the LoopUp
conferencing platform.
The discontinued licensing revenue represented a contract with a
single customer in the UK which completed in 2016.
There was no customer which represented more than 10% of total
revenue in either year.
2016 2015
GBP000 GBP000
Analysis of revenue by segment:
LoopUp Revenue 12,823 9,204
Discontinued licensing revenue 736 901
-------- --------
13,559 10,105
======== ========
Analysis of gross profit before
tax by segment:
LoopUp Revenue 9,558 6,624
Discontinued licensing revenue 736 901
-------- --------
10,294 7,525
======== ========
Geographical analysis of total revenue:
EU 7,356 5,662
US 5,952 4,170
Rest of World 251 273
-------- --------
13,559 10,105
-------- --------
Geographical analysis of LoopUp
Revenue:
EU 6,620 4,761
US 5,952 4,170
Rest of World 251 273
-------- --------
12,823 9,204
======== ========
Geographical analysis of non-current
assets:
EU 4,897 3,069
US 351 262
Rest of World 37 41
-------- --------
5,285 3,372
======== ========
3. Earnings / (loss) 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.
2016 2015
Profit/(loss) attributable to equity
holders (GBP000) 198 (580)
------- -------
Weighted average no. of ordinary
shares in issue ('000) 32,352 23,855
Basic earnings/(loss) per share
(pence) 0.6 (2.4)
======= =======
The diluted earnings per share has been calculated by dividing
the net profit attributable to equity holders of the Group by the
weighted average number of shares in issue during the year,
adjusted for potentially dilutive shares that are not
anti-dilutive.
For the year to 31 December 2015, the number of shares used is
identical to the basic loss per share calculation. This is because
the outstanding share options would have the effect of reducing the
loss per share and would not be dilutive under IAS 33.
2016 2015
'000 '000
Weighted average number of ordinary
shares in issue 32,352 23,855
Adjustment for share options 4,413 -
------- -------
Weighted average number of potential
ordinary shares in issue 36,765 23,855
Diluted earnings/(loss) per share
(pence) 0.5 (2.4)
======= =======
4. Dividends
The Directors do not recommend the payment of a dividend (2015:
GBPnil).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAADXEENXEAF
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