TIDMLOOP
RNS Number : 9066P
LoopUp Group PLC
06 September 2017
LOOPUP GROUP PLC
("LoopUp Group" or the "Group")
Interim results for the six months ended 30 June 2017
LoopUp Group plc (AIM: LOOP), the premium remote meetings
company, today announces its unaudited interim results for the six
months ended 30 June 2017. The results demonstrate six months of
further robust growth in revenue and profitability, driven by
continued strong sales and customer loyalty across the Group's key
markets. The Group enters the second half of the year with a
healthy new business pipeline and a debt-free balance sheet.
Financial Highlights
Six months Six months
to to
30 June 30 June
2017 2016
Year-on-year
GBP million (unaudited) (unaudited) growth
---------------------------- ------------- ------------- -------------
LoopUp Revenue(1) 8.65 6.00 44.2%
Total revenue 8.65 6.38 35.6%
LoopUp Gross Profit(1) 6.65 4.42 50.3%
LoopUp Gross Profit
margin(1) 76.8% 73.7% +310 BPS
LoopUp EBITDA(1),(2) 1.61 0.89 81.4%
LoopUp Operating Profit(1) 0.51 0.14 264.3%
Diluted earnings per
share (pence) 1.9 0.2
---------------------------- ------------- ------------- -------------
1. LoopUp Revenue, LoopUp Gross Profit, LoopUp EBITDA and LoopUp
Operating Profit are revenue, gross profit, EBITDA and operating
profit respectively from the LoopUp product and associated
value-added add-on capabilities, and so exclude discontinued BT
technology licensing business. Total revenue, gross profit, EBITDA
and operating profit for H12016, inclusive of GBP0.38m discontinued
BT technology licensing revenue, were GBP6.38m, GBP4.80m, GBP1.27m
and GBP0.52m, respectively. H12017 numbers are unaffected as the BT
technology licensing business discontinued in November 2016.
2. Earnings before interest, taxation, depreciation,
amortisation and share based payments charges.
Operational Highlights
-- 44% growth in LoopUp Revenue, an increase in growth rate from
39% in FY2016 and 36% in FY2015. Growth at constant currency in H1
2017 was 37.2% year-on-year compared to 31% in each of FY2016 and
FY2015
-- 310 basis point improvement in like-for-like gross profit
margin compared to H1 2016, leading to a 50.3% growth in LoopUp
Gross Profit
-- 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 in H1 2017 was 9.1% (FY2016:
8.3%)
-- Continued investment in the Group's team-based 'Pods' for new
business acquisition led to an average of 7.7 Pods during the
period (FY2016: 6.2 Pods), each costing GBP493,000 on a
fully-loaded basis (FY2016: GBP490,000), and each returning new
annual recurring revenue growth of GBP508,000 (FY2016:
GBP509,000)
-- Particularly strong US growth with the Group generating 36%
of LoopUp Revenue from the United Kingdom, 52% from the United
States, 10% from continental Europe and 2% from the rest of the
world
-- Introduced support for enterprise Single Sign-On (SSO) into the LoopUp product
-- Introduced inter-connected multi-site bridging into LoopUp's
global network operations to enhance premium international voice
quality
-- The Group paid down a final debt installment of GBP0.3m on 31
January 2017, leaving the Group's balance sheet debt-free. As at 30
June 2017, the Group's net cash position was GBP1.6 million
Steve Flavell, Co-CEO of LoopUp Group, commented,
"We are very pleased to report continued strong performance in
our 2017 interim results. LoopUp is benefiting from significant
momentum and the 44% growth in LoopUp Revenue exceeds FY2016 and
FY2015 growth rates both as reported on a pound-sterling basis and
on a constant currency basis. Like-for-like gross margins have
improved, the business has developed its profitability at both
EBITDA and operating levels and our metrics for new business
acquisition efficiency and business retention remain strong.
The second half of 2017 has started encouragingly with some
major new customer wins set to roll out, and we remain confident
for the full financial year as well as in our ability to deliver
growth beyond that. We attribute our continued positive performance
and outlook to our highly differentiated product strategy in the
large GBP5 billion market for outsourced remote meetings
services."
For further information, please contact:
LoopUp Group PLC via FTI
Steve Flavell, Co-CEO
+44 (0) 207
Panmure Gordon (UK) Limited 886 2500
Dominic Morley / Alina Vaskina
/ William Wickham (Corporate Finance)
Erik Anderson / Amy Sarra (Corporate
Broking)
+44 (0) 203
FTI Consulting, LLP 727 1000
Matt Dixon / Chris Lane / Harry
Staight
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.
Notes:
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
LoopUp Group plc was incorporated on 1 February 2016. The
company acquired the share capital of the trading entity, Ring2
Communications Limited (now LoopUp Limited), on 2 August 2016.
Therefore, at 30 June 2016, LoopUp Group plc had no trading
activity to report, nor had formed a group including LoopUp
Limited. The comparative financials for six months ended 30 June
2016 represent the trading results of LoopUp Limited (a company
with the same registered address as the LoopUp Group and the
registered number 4677393) and its subsidiaries.
Chief Executive Officers' Business Review
We're pleased to report on another period of robust performance
in the first half of 2017. The period has seen us deliver strong
revenue growth, gross margin improvements and increased
profitability at both EBITDA and operating profit levels. Helping
to drive this progress, we have maintained efficient new business
acquisition and customer retention metrics and made progress
against our strategic objectives.
Continued strong growth
We have maintained our track record of consistently strong
revenue growth. On a sterling-reported basis, LoopUp Revenue grew
by 44% year-on-year compared to H1 2016, up from 39% growth in
FY2016 and 36% growth in FY2015.
On a constant currency basis, 37 percentage points were due to
business growth and 7 percentage points were due to dollar currency
changes against the pound year-on-year compared to H1 2016. This
constant currency growth of 37% exceeds previous periods, namely
31% in each of FY2016 and FY2015.
Key driver of consistent growth: differentiated product
strategy
The consistency of our strong growth in this GBP5 billion
technology space, which over the years has attracted heavyweight
market participants such as Google, Amazon, Microsoft, Cisco,
Citrix and Adobe, as well as hot Silicon Valley names such as Zoom
and Blue Jeans, is, we believe, due to our clearly differentiated
product strategy.
More than twenty years into this technology space, most business
users are still dialling into conference calls with numbers and
codes. It is LoopUp's belief that they're doing so not because they
like it - the time-wasting frustrations of conference calling are
widely recognised - but because software-based alternatives are
deemed too intimidating. A recent survey1 showed that 83% of
frequent conference callers would do more web-based conferencing if
it were easier. Unlike many types of enterprise software that are
learned and adopted over time through trial and error, there is
little to no appetite for risk when hosting a live remote meeting
with multiple clients and colleagues. The mainstream majority stick
to what they know and are comfortable with: dialling in.
There are plenty of highly-functional software products in the
market, vying for the attention of tech-savvy early adopters and
specialist departmental users such as training and IT staff.
LoopUp, however, is pursuing a notably different strategy by
building and marketing a software product specifically designed for
'everyone else': a large niche, everyone who's still dialling in.
We do so by offering an intuitive and streamlined user experience
that is designed to require no end user training. We obsess over
the usage rates of those select capabilities we choose to
incorporate into the product; we take the view that, done well,
less is more. This is a quite different strategy to the
technology-led, feature-loaded approach of the software-based
competition.
1Survey commissioned by LoopUp and conducted by Sapio Research,
August 2017 (n=1000)
Continued efficiency of growth
Our team-based 'Pods' organisational structure for new business
acquisition has continued to operate to efficient underlying unit
economics. During H1 2017, each of the 7.7 Pods delivered an
average of GBP508,000 new annual recurring revenue at a
fully-loaded one-off cost of GBP493,000. The Group has a low
customer loss rate of just 5.5% of revenue over the last 12-month
period, which if maintained, would imply an 18-year expected
lifetime over which this annual revenue would recur.
Furthermore, in our established customer base, we have again
demonstrated 'negative net churn'. Taking into account all losses,
shrinkages and growths, LoopUp Revenue in the period from all
customers of at least one year old actually net grew year-on-year
by 9.1% (FY 2016: 8.3%).
Our customer base remains well diversified, with the largest
single customer (which the Group won in 2016) representing just
3.8% of total LoopUp Revenue. Our top 100 customers accounted for
63% of LoopUp Revenue, and the top 500 accounted for 91%. The Group
generated 36% of LoopUp Revenue from the United Kingdom, 52% from
the United States, 10% from continental Europe and 2% from the rest
of the 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.
Progress against our strategic priorities
We have made strong progress against each of our three strategic
priorities:
-- As indicated at IPO, we plan to increase the number of Pods
to an average of at least eight during 2017 and an average of at
least 11 during 2018. With an average of 7.7 during H1 2017, we
remain well on track to deliver against these targets.
-- Our new Marketing team, which was brought on board after the
IPO, has made substantial progress on multiple fronts. They have
produced a wealth of original thought leadership content now
available in a new 'Resources' zone of our corporate website and
which will form a cornerstone of various demand generation
activities going forward; initiated a business PR program leading
to numerous published articles; established relationships with
several leading technology space analyst firms that have already
led to research coverage and award recognition; and worked closely
with the Group's commercial operations team towards delivering
end-to-end tracking of our nascent demand generation
activities.
-- During H1 2017, we have continued to innovate the LoopUp
product by adding support for Single Sign-On (SSO) identity
management, which enables enterprise IT decision-makers finally to
bring conference calling under the SSO banner. While SSO is
relatively common in software based products that tend to serve the
early adopter part of our market, it is by contrast quite
differentiating in the part of the market that LoopUp serves: the
mainstream majority who, prior to LoopUp, have just dialed in to
non-software based audio services. We have also introduced a new
bridging architecture, whereby a single conference call can be
bridged in multiple interconnected LoopUp data centres, and so
materially enhancing voice quality in larger international remote
meetings.
Positive Outlook
We continue to see strong demand for our product from our target
market of mid-to-large enterprise and professional services firms.
Since the end of the reported period, we've had some major new
customer wins set to roll out in the second half, including a major
multinational consulting organisation, a premier investment banking
advisory firm, and a leading UK building society. Pipelines are
healthy and we remain confident in our ability to deliver further
growth.
Unaudited consolidated statement of comprehensive income for the
six months to 30 June 2017
Six months Six months 12 months
to to to
30 June 30 June 31 December
GBP'000 2017 2016 2016
----------------------------- ----------- ----------- -------------
LoopUp Revenue (1) 8,651 5,998 12,823
Discontinued licensing
revenue - 384 736
------------------------------ ----------- ----------- -------------
Total revenue 8,651 6,382 13,559
Cost of sales (2,004) (1,579) (3,265)
------------------------------ ----------- ----------- -------------
Gross profit 6,647 4,803 10,294
Administrative expenses (5,038) (3,532) (8,231)
EBITDA (2) 1,609 1,271 2,063
Depreciation (137) (107) (246)
Amortisation (962) (644) (1,419)
Other operating income - - -
----------------------------- ----------- ----------- -------------
Operating profit 510 520 398
Finance costs (3) (448) (684)
------------------------------ ----------- ----------- -------------
Profit / (loss) before
tax 507 72 (286)
Income tax 356 - 484
Profit for the period 863 72 198
Other comprehensive income
and loss
Currency translation loss (80) (878) (1,209)
Total comprehensive income
/ (loss) for the period
attributable to the equity
holders of the parent 783 (806) (1,011)
============================== =========== =========== =============
Earnings per share (pence)
- Note 4
Basic 2.1 0.3 0.6
Diluted 1.9 0.2 0.5
============================== =========== =========== =============
1. LoopUp Revenue is revenue from the LoopUp product and
associated value-added add-on capabilities; excludes discontinued
BT technology licencing revenue.
2. EBITDA is operating profit stated before depreciation,
amortisation of intangible fixed assets and share-based payments
charges.
Unaudited consolidated statement of financial position at 30
June 2017
30 June 30 June 31 December
GBP'000 2017 2016 2016
------------------------------------ --------- --------- ------------
Assets
Non-current assets
Property, plant and equipment 528 428 463
Intangible assets 5,705 3,616 4,822
Total non-current assets 6,233 4,034 5,285
------------------------------------- --------- --------- ------------
Current assets
Trade and other receivables 3,539 2,795 2,802
Cash and cash equivalents 1,612 1,086 2,547
Current tax - - 500
------------------------------------- --------- --------- ------------
Total current assets 5,151 3,881 5,849
------------------------------------- --------- --------- ------------
Total assets 11,384 7,925 11,134
------------------------------------- --------- --------- ------------
Liabilities
Trade and other payables (1,788) (1,284) (1,744)
Accruals and deferred
income (986) (582) (1,378)
Borrowings - (5,110) (306)
Total current liabilities (2,774) (6,976) (3,428)
------------------------------------- --------- --------- ------------
Net current assets / (liabilities) 2,377 (3,095) 2,421
Non-current liabilities
Borrowings - (4,811) -
------------------------------------ --------- --------- ------------
Total non-current liabilities - (4,811) -
Total liabilities (2,774) (11,787) (3,428)
------------------------------------- --------- --------- ------------
Net assets / (liabilities) 8,610 (3,862) 7,706
===================================== ========= ========= ============
Equity
Share capital 205 139 204
Share premium 11,828 - 11,708
Other reserve 12,691 12,691 12,691
Foreign currency translation
reserve (1,888) (1,477) (1,808)
Retained loss (14,226) (15,215) (15,089)
Shareholders' funds /
(deficit) attributable
to equity owners of parent 8,610 (3,862) 7,706
===================================== ========= ========= ============
Unaudited consolidated statement of changes in equity at 30 June
2017
Shareholders'
funds
/ (deficit)
Foreign attributable
currency to equity
Share Share Other translation Retained owners
GBP'000 capital premium reserve reserve loss of parent
------------------- --------- --------- --------- ------------- ------------------ --------------
Balance at 1
January 2016 139 - 12,691 (599) (15,287) (3,056)
Profit and total
comprehensive
income / (loss) - - - (878) 72 (806)
Balance at 30
June 2016 139 - 12,691 (1,477) (15,215) (3,862)
Profit and total
comprehensive
income - - - (331) 126 (205)
Share issue
on AIM listing 65 12,935 - - - 13,000
Cost of issue
of equity shares - (1,227) - - - (1,227)
Balance at 31
December 2016 204 11,708 12,691 (1,808) (15,089) 7,706
Profit and total
comprehensive
income - - - (80) 863 783
Proceeds from
share issue 1 120 - - - 121
Balance at 30
June 2017 205 11,828 12,691 (1,888) (14,226) 8,610
------------------- --------- --------- --------- ------------- ------------------ --------------
Unaudited consolidated statement of cash flows for the six
months to 30 June 2017
Six months Six months 12 months
to to to
30 June 30 June 31 December
GBP'000 2017 2016 2016
--------------------------------- ----------- ----------- -------------
Net cash flow from operating
activities
Profit / (loss) before
tax 507 72 (286)
Non-cash adjustments
Depreciation and amortisation 1,099 751 1,655
Interest payable 3 448 684
Working capital adjustments
Increase in trade and
other receivables (737) (699) (706)
Increase / (decrease)
in trade and other payables (348) 202 1,468
Tax receivable 856 483 468
--------------------------------- ----------- ----------- -------------
Cash generated from
operations 1,380 1,257 3,293
Cash flows from investing
activities
Purchase of property,
plant and equipment (202) (193) (304)
Addition of intangible
assets (1,845) (1,230) (3,211)
Net cash used in investing
activities (2,047) (1,423) (3,515)
--------------------------------- ----------- ----------- -------------
Cash flows from financing
activities
Proceeds of borrowings - 778 819
Proceeds from share
issues 121 - 8,500
Issue costs in relation
to IPO - - (1,227)
Repayment of loans (306) - (5,404)
Interest and finance
fees paid (3) (7) (21)
Finance leases paid - - (10)
--------------------------------- ----------- ----------- -------------
Net cash generated by
financing activities (188) 771 2,657
--------------------------------- ----------- ----------- -------------
Net increase / (decrease)
in cash and cash equivalents (855) 605 2,435
Cash and cash equivalents
brought forward 2,547 402 402
Effect of foreign exchange
rate changes (80) 79 (290)
Cash and cash equivalents
carried forward 1,612 1,086 2,547
================================= =========== =========== =============
Notes to the financial information for the six months ended 30
June 2017
1. General information
LoopUp Group plc (AIM: "LOOP", "LoopUp Group", or the "Group")
is a global software-as-a-service ("SaaS") provider of remote
meetings. It is a public limited company incorporated and domiciled
in England and Wales, with company number 09980752. Its registered
office is 78 Kingsland Road, London, E2 8DP.
2. Basis of preparation and significant accounting policies
LoopUp Group plc was incorporated on 1 February 2016. The
company acquired the share capital of the trading entity, LoopUp
Limited, on 2 August 2016. Therefore, at 30 June 2016, LoopUp Group
plc had no trading activity to report, nor had formed a group
including LoopUp Limited. The comparative financials for six months
ended 30 June 2016 represent the trading results of LoopUp Limited
(a company with the same registered address as the LoopUp Group and
the registered number 4677393) and its subsidiaries.
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 2016). 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 2016 has been
derived from the full Group accounts published in the Annual Report
and Accounts 2016, 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 2016 statutory
accounts, which are based on the recognition and measurement
principles of IFRS in issue as adopted by the European Union
("EU"). No changes to accounting policies are expected for the year
ending 31 December 2017.
These unaudited interim results have been prepared on a going
concern basis. At the balance sheet date, the Group had net cash of
GBP1.6m and net assets of GBP8.6m, 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 2017 were approved
by the Board on 5 September 2017. A copy of these interim results
will be available on the Group's web site www.loopup.com from 6
September 2017.
The principal risks and uncertainties faced by the Group have
not changed from those set out in the Annual Report and Accounts
2016.
3. Revenue and segmental reporting
The Directors have identified 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.
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 licencing revenue
represented a contract with a single customer in the UK which
completed in 2016. This was the only customer which represented
more than 10% of revenues in any period.
Six months Six months 12 months
to to to
30 June 30 June 31 December
GBP'000 2017 2016 2016
-------------------------- ----------- ----------- -------------
Analysis of revenue
by segment:
LoopUp Revenue 8,651 5,998 12,823
Discontinued licencing
revenue - 384 736
-------------------------- ----------- ----------- -------------
8,651 6,382 13,559
-------------------------- ----------- ----------- -------------
Analysis of gross profit
before tax by segment:
LoopUp Revenue 6,647 4,419 9,558
Discontinued licencing
revenue - 384 736
-------------------------- ----------- ----------- -------------
6,647 4,803 10,294
-------------------------- ----------- ----------- -------------
Geographical analysis
of total revenue:
EU (1) 3,964 3,631 7,356
US 4,547 2,635 5,952
Rest of World 140 116 251
-------------------------- ----------- ----------- -------------
8,651 6,382 13,559
-------------------------- ----------- ----------- -------------
Geographical analysis
of LoopUp Revenue:
EU (2) 3,964 3,247 6,620
US 4,547 2,635 5,952
Rest of World 140 116 251
-------------------------- ----------- ----------- -------------
8,651 5,998 12,823
-------------------------- ----------- ----------- -------------
Geographical analysis
of non-current assets:
EU 5,775 2,648 4,897
US 419 340 351
Rest of World 39 46 37
-------------------------- ----------- ----------- -------------
6,233 3,034 5,285
-------------------------- ----------- ----------- -------------
(1) Includes revenue earned in the UK of GBP3,116,000 (H1 2016:
GBP2,913,000, FY 2016: GBP5,903,000)
(2) Includes revenue earned in the UK of GBP3,116,000 (H1 2016:
GBP2,529,000, FY 2016: GBP5,167,000)
All EU non-current assets reside in the UK
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
excluding those held in treasury:
Six months Six months 12 months
to to to
30 June 30 June 31 December
2017 2016 2016
------------------------------ ----------- ----------- -------------
Profit attributable to
equity holders (GBP'000) 863 72 198
Weighted average number
of ordinary shares in issue
('000) 40,195 27,740 32,352
Basic earnings per share
(pence) 2.1 0.3 0.6
============================== =========== =========== =============
The diluted earnings per share has been calculated by dividing
the net profit attributable to ordinary shareholders by the
weighted average number of shares in issue during the year,
adjusted for potentially dilutive shares that are not
anti-dilutive.
Six months Six months 12 months
to to to
30 June 30 June 31 December
2017 2016 2016
------------------------------- ----------- ----------- -------------
Weighted average number
of ordinary shares in issue
('000) 40,915 27,740 32,352
Adjustments for share options
('000) 4,290 4,423 4,413
------------------------------- ----------- ----------- -------------
Weighted average number
of potential ordinary shares
in issue ('000) 45,205 32,163 36,765
------------------------------- ----------- ----------- -------------
Diluted earnings per share
(pence) 1.9 0.2 0.5
=============================== =========== =========== =============
5. Dividends
The directors did not recommend the payment of a dividend for
the years ended 31 December 2016 or 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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