REG - Cloudcoco Group PLC - Trading Update

CloudcocoAnnouncement

27/10/2022 07:00

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RNS Number : 2575E  Cloudcoco Group PLC  27 October 2022

The information contained within this announcement is deemed by CloudCoCo to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.

 

27 October 2022

CloudCoCo Group plc

("CloudCoCo" or the "Group")

 

Year End Trading Update

 

Strong strategic and commercial progress and positive outlook

 

CloudCoCo (AIM: CLCO), a leading UK provider of Managed IT services and
communications solutions to private and public sector organisations, is
pleased to provide an update on its progress for the year ended 30 September
2022 ("FY22").

 

Highlights:

 

 ·         Step change in sales, with revenue expected to be no less than £24.0m (FY21:
           £8.0m) as a result of the previously announced acquisitions, now successfully
           integrated
 ·         Trading EBITDA(1) expected to be in the region of £1.0m (FY21: £745k)
 ·         Launch of 'Project IGNITE' investment programme to enhance sales capabilities
 ·         Opening of new, more modern headquarters in Leeds and office locations in
           Warrington and Bournemouth
 ·         Confident of continued strong sales growth and improved profitability in FY23

 

The Group delivered a strong revenue performance in the period, with positive
trading momentum from the first half continuing through to the second. We
continued to make good progress in signing new business on multi-year terms,
hardware sales were ahead of expectations, and there were encouraging early
signs of cross-selling success between the acquired companies with our first
managed services customers taking data centre solutions and vice versa. This
performance, alongside the action taken to put the Group on a sound footing in
the first half, led to trading EBITDA being up significantly on the prior
year.

 

Operationally, we made excellent progress, successfully completing the
integration of the four acquired businesses. Pleasingly, we continued to see
further improvements in the performance of the loss-making Connect business
acquired in October 2021, as the year progressed further to it reaching
monthly breakeven in March 2022 as announced in the Group's interim results.

 

To support the next phase of the Group's growth, we launched a new programme
of investment in the second half which has continued into the new financial
year. Known internally as 'Project IGNITE', the programme comprises the
implementation of additional sales systems and the introduction of new talent
in our new business, mobile, alliances, sales academy, retention, and
ecommerce teams.

 

In line with this initiative, CloudCoCo's primary focus in the new financial
year will be on driving organic growth. At the same time, the Board will
continue to actively seek opportunities to enhance capabilities and accelerate
growth through selective acquisitions.

 

While remaining cognisant of the inflationary environment in the near term, we
continue to work with our customers to help them navigate rising third-party
vendor costs and new business pipelines across the Group are growing at a
healthy rate. We are confident of delivering continued strong sales growth and
improved profitability in FY23, weighted towards the second half in view of
the investments we are making in the first.

 

Mark Halpin, CEO of CloudCoCo, commented:

 

"The period under review has been another successful one, characterised by a
focus on integrating and optimising the four acquisitions made in late 2021,
while taking steps to ensure the Group moves forward as a single, cohesive
unit. To have delivered such a positive financial performance in such a short
space of time while making such major leaps forward operationally is testament
to the quality of our expanded proposition and the hard work of everyone at
the business.

 

"Looking ahead, we are confident FY23 will be another year of material
strategic and commercial progress. Our organic growth prospects are strong,
with growing demand, all parts of the business now fully embedded and
operating profitably, and a programme of investment underway to further
bolster our sales efforts. Alongside this, in pursuit of the next stage in our
'Get Bigger' strategy, we are actively exploring complementary acquisitions
with the potential to enhance our one stop shop capabilities and accelerate
value creation for shareholders."

(1) earnings before net finance costs, tax, depreciation, amortisation, plc
costs, exceptional costs and share-based payments.

 

Contacts:

 

 CloudCoCo Group plc                                          Via Alma PR

 Mark Halpin (CEO)

 Darron Giddens (CFO)

 Allenby Capital Limited - (Nominated Adviser & Broker)       Tel: +44 (0)20 3328 5656

 Jeremy Porter / Freddie Wooding - Corporate Finance

 Tony Quirke / Amrit Nahal - Equity Sales

 Alma PR - (Financial PR)                                     Tel: +44 (0)20 3405 0205

 David Ison                                                  cloudcoco@almapr.co.uk

 Josh Royston

 Kieran Breheny

 

About CloudCoCo

Supported by a team of industry experts and harnessing a diverse ecosystem of
partnerships with blue-chip technology vendors, CloudCoCo makes it easy for
private and public sector organisations to work smarter, faster and more
securely by providing a single point of purchase for their connectivity,
telephony, cyber security, cloud, IT hardware and support needs.

CloudCoCo has headquarters in Leeds and regional offices in Warrington,
Sheffield and Bournemouth

www.cloudcoco.co.uk (http://www.cloudcoco.co.uk)

 

 

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