CloudCall plc (Name recently changed from Synety plc)
Price 72p Bid/Offer Spread (70 – 73p)
Market Cap - Circa £9.7 million
PS (Disclosure - Small Opening Position Held)
About the Company
CloudCall plc provides cloud-based computer telephony integration for Customer Relationships Management Systems. In other words, it facilitates quick one-key dialling, pop- ups on screen with caller ID, and facility to record phone calls in an informative screen based view, by integrating the traditional phone line, e-mail, and website together.
The company is a loss-making company for several years due to being in a start-up phase. The business model is SaaS. Balancing initial costs against recurring revenues has provided a challenge with shareholders wishing to see the company cash flow positive as against rapid growth. This year, however, should see break-even point for CloudCall. There has been 100% growth per year for last two years with equal growth expected in the future.
The on-boarding of new customers to CloudCall has quickened pace which helps to improve cash flow. The £3 million administration costs still need to be covered. Gross margins are very good but the rate of acquiring new customers is all important.
Management does have a decent shareholding and are not eager to issue new shares too easily to dilute themselves.
Recent Changes:
Recent name changed from Synety to Cloud Call is positive and gives a better understanding of the market to what the company is about.
The company needs to double the number of customers to 7,500 according to the company to break-even. The company distinguishes between users and customers with users being a larger number than customers. The rate of growth of 100% for the last couple of years looks promising. CloudCall as a strategy decided to concentrate on larger size companies seems a wise move.
The operating cost reductions of 40K per month outlined by management are certainly helpful towards break-even point.
The change of broker to Cenkos Securities may make easier to raise funds at a later growth stage in 2016/2017 at a smaller discount on the foot of positive news flow. The last fundraising by the company was a shareholder disaster as regards price discount needed to get the share placing done. It was mostly management own naivety in not meeting ambitious market expectations that caused market concern.
More recent statements from the company say that it expects…
