REG - LoopUp Group PLC - Interim results for the period ended 30 June 2022
30/09/2022 07:01
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220930:nRSd2401Ba&default-theme=true
RNS Number : 2401B LoopUp Group PLC 30 September 2022
30 September 2022
LOOPUP GROUP PLC
("LoopUp" or the "Group")
Interim results for the period ended 30 June 2022
LoopUp Group plc (AIM: LOOP), the cloud platform for premium hybrid
communications, announces its unaudited interim results for the six months
ended 30 June 2022 ("H1-22").
Financial Highlights:
· Revenue of £6.6 million (H1-21: £11.5 million) at a gross margin of 67%
(H1-21: 67%)
· Adjusted EBITDA(1) loss of £1.5 million (H1-21: £1.2 million profit) and
adjusted operating loss(2) of £5.1 million (H1-21: £2.4 million)
· Gross cash of £0.7 million and net debt of £8.0 million at 30 June 2022 (30
June 2021: £5.0 million and £6.9 million respectively)
Operating Highlights:
· Continued execution on strategic transition from traditional base of remote
meetings services into a broader cloud platform for hybrid communications
· Cloud Telephony: material acceleration in commercial traction:
- 133% acceleration in customer wins: 35 in the twelve months to Jun-22 versus
15 in the twelve months to Jun-21
- 224% acceleration in contract wins: 81 in the twelve months to Jun-22 versus
25 in the twelve months to Jun-21
- Sales pipeline of new opportunities exceeded c.£100 million ARR at the end of
the period
· Hybridium: closed a landmark contract with Telefónica for deployment at
'Universitas', its global innovation and talent hub in Madrid
Post Period Highlights
· Cloud Telephony: 10 additional Cloud Telephony customer wins and 24 additional
contract wins, leading to a total of 60 customer wins and 130 contracts signed
since service launch in Q3 2020
· Meetings: closed major contract with PGi expected to generate c.£10 million
of revenue and c.£5 million of net cash contribution in the twelve months
from October 2022 to September 2023
· Successful Capital Raising for approximately £3.5 million in September 2022,
subject to General Meeting scheduled for 17 October 2022
· Successful renegotiation of senior debt arrangements with Bank of Ireland
Steve Flavell and Michael Hughes, co-CEO's of LoopUp, commented:
"We continued to make progress during the half, as we strategically transition
our business and technology into a broader cloud platform for hybrid
communications.
Our primary growth line of business, Cloud Telephony, has seen contract wins
accelerate by 264% in the second year post service launch, and the recent PGi
Connect deal will materially boost our legacy Meeting business, which we
expect to return to growth in HY 2022 as a result.
Looking ahead, we are excited by the growth potential of Cloud Telephony, and
welcome the material cash boost from the PGi Connect deal and the proposed
Capital Raising, which will enable us to take Cloud Telephony into its next
phase of commercial acceleration."
1 Adjusted EBITDA is operating profit/(loss) stated before depreciation,
amortisation of development costs and acquired intangibles, exceptional
reorganisation costs, exceptional impairment charge and share-based payment
charges.
2 Adjusted operating profit/(loss) is operating profit/(loss) stated before
amortisation of acquired intangibles, exceptional reorganisation costs,
exceptional impairment charge and share-based payment charges.
LoopUp Group plc via FTI
Steve Flavell, co-CEO
Panmure Gordon (UK) Limited +44 (0) 20 7886 2500
Dominic Morley / Alina Vaskina (Corporate Finance)
Erik Anderson (Corporate Broking)
Cenkos Securities Limited +44 (0) 20 7397 8900
Giles Balleny / Dan Hodkinson (Corporate Finance)
Alex Pollen (Sales)
FTI Consulting, LLP +44 (0) 20 3727 1000
Matt Dixon / Jamille Smith / Tom Blundell
About LoopUp Group plc
LoopUp (LSE AIM: LOOP) is a cloud platform for premium hybrid communications.
The Group's flagship Cloud Telephony solution for Microsoft Teams enables
multinational enterprises to consolidate their global telecommunications into
a single, consistently managed cloud implementation rather than disparate
implementations from multiple carriers. The Group's hybrid auditorium and
events solution, Hybridium (www.hybridium.com (http://www.hybridium.com) ),
brings unrivaled engagement and analytics to larger scale hybrid education,
training and events such as management onsites, departmental kick-offs,
capital markets days and thought leadership seminars.
The Group is listed on the AIM market of the London Stock Exchange (LOOP) and
is headquartered in London, with offices in the US, Spain, Germany, Hong Kong,
Barbados and Australia.
Chief Executive Officers' Business Review
The Group has made strong continued progress during H1-22 with the continued
transition of our business, and expansion of our technology, into a broader
cloud platform for hybrid communications.
In our legacy Meetings business, the recently announced deal with PGi Connect
gives this business unit a material boost that is expected to return the
business back to growth in H2-22 and FY2023. While this business remains in
underlying decline as enterprises progressively embrace more holistic Unified
Communications (UC) platforms such as Microsoft Teams, this material book of
business from PGi Connect is expected to contribute approximately £10 million
in revenue and £5 million in net cash to the Group over the 12-month period
from October 2022 to September 2023.
Meanwhile, the Group's primary growth line of business and source of long-term
shareholder value - Cloud Telephony - has demonstrated material commercial
acceleration in its second-year post service launch. This is the result of the
Group's compelling commercial value proposition targeted at the multinational
mid-market and enterprise market, facilitating single vendor telephony service
provision globally, rather than supply from a patchwork of multiple
domestic/regional telecommunications carriers. Contract wins accelerated by
264% in the second-year post service launch, and specifically by 224% in the
twelve months to June 2022 versus the equivalent prior year period.
We are excited by the growth potential of Cloud Telephony, and welcome the
material expected cash boost from the PGi Connect deal, together with the
proposed Capital Raising as announced on 28 September (subject to shareholder
approval), to take this primary growth line of business for the Group through
its next phase of commercial acceleration.
Group business overview
The Group has three lines of business:
· Meetings - legacy cash generative business
- Integrated audio, web and video remote meetings software and service, focused
on premium audio quality and ease-of-use
- In underlying decline but materially boosted by the major agreement with PGi
Connect, as announced on 1 September 2022
· Cloud Telephony - primary growth line of business
- Next generation telephony - 'PSTN replacement' - enabling phone calls to and
from work phone numbers independently of the user's physical location and not
tied to a physical handset, and integrated with Unified Communications
platforms such as Microsoft Teams
- Targeting the multinational mid-market and enterprise market segment of this
large, growing market, forecast to be a $29 billion market by 2025 (source:
Gartner, 2022)
- Strong acceleration of commercial traction, with 130 contracts closed two
years on from service launch and demonstrating material acceleration in
customer and contract win-rate
· Hybridium - secondary growth line of business
- Hybrid auditorium technology, enabling large scale hybrid events (20-150
people in room and 20-150 people remote), such as company town halls,
management onsites / offsites, team kick-offs, Capital Markets days, product
launches, and corporate training
Meetings and PGi Connect deal
The Group's Remote Meetings business has been declining in the post pandemic
environment as enterprises progressively embrace more holistic Unified
Communications (UC) platforms, such as Microsoft Teams, which incorporate
meetings functionality.
However, on 1 September 2022, the Group announced that it had entered into a
major revenue sharing and customer transfer agreement with PGi Connect, giving
LoopUp the rights to transfer materially all of PGi Connect's conferencing
services customers over to LoopUp. While no initial or fixed consideration is
payable, the Group will pay PGi Connect a share of revenue invoiced and
received from successfully transferred customers for a period of three years.
On 2 September 2022, PGi Connect sent out the first (and largest) batch of
contract assignment notices to c.8,100 of its direct enterprise customers,
concerning the transition of services to LoopUp from 1 October 2022. As at
July 2022, these 8,100 customers had an annualised revenue run-rate of c.£34
million to PGi Connect.
The Group has prior experience of large-scale customer transitions onto its
platform following the acquisition of MeetingZone in 2018. The Group is not
taking on any of PGi's infrastructure, equipment, datacentres or vendor
contracts, making the transition clean and cost efficient. Nevertheless, from
customers' perspective, the transition will be seamless with dial-in numbers,
meetings access codes and active calling rates remain unchanged in nearly all
cases, and with standard PGi terms and conditions remaining in place meaning
no re-contracting.
While this is clearly a highly material level of assigned business, and while
more is expected to be taken on in due course relating to PGi Connect's
indirect business, the Group is making prudent assumptions regarding
transition loss for non-term-committed customers as well as general ongoing
business attrition, and so expects the agreement to generate revenue of
approximately £10 million and net cash contribution to the Group of
approximately £5 million over the twelve-month period from October 2022 to
September 2023.
Cloud Telephony
In Q3 2020, the Group launched its Cloud Telephony solution, which has since
developed into its primary growth line of business for long-term future value
creation in the Group. The Cloud Telephony market is forecast to grow to $29
billion by 2025, and the Group's aspiration is to become one of a small number
of winners in the multinational mid-market and enterprise segment, providing
customers with single-vendor service provision globally rather than the status
quo of multiple telecommunications carriers in specific countries and regions.
Since launch, the Group has secured 60 customer wins, comprising 130
individual contracts, and has done so at an accelerating win rate:
· 133% increase in customer wins, with 42 won during the second year post
service launch ending August 2022 (18 during the first year post service
launch ending August 2021); and
· 264% increase in individual contract wins, with 102 won during the second year
post service launch ending August 2022 (28 during the first year post service
launch ending August 2021). The greater acceleration in contract wins versus
customer wins reflects the 'layering effect' from progressive geographic
customer rollouts - i.e. approximately one third of the contract wins in the
second year post launch were from customers won in the first year post launch.
In aggregate, these 60 customer wins represent:
· Minimum Annual Recurring Revenue (ARR) of £1.2 million and minimum Total
Contract Value (TCV) of £4.4 million, based on minimum contracted levels;
· Expected ARR of c.£2.4 million and expected TCV of c.£7.9 million, where
LoopUp has relatively strong visibility of customer intent for the next stage
of rollouts based on conversations, planning and pricing; and
· Potential ARR of c.£5.3 million and potential TCV of c.£16.5 million, based
on identified potential rollout levels but where LoopUp currently has less
clear visibility of customer intent.
Operationally, all customer deployments to date have been successful, and all
rollouts are progressing positively. One customer win case study is a leading
global communications consulting firm with c.7,000 employees across 30
countries. The Group has successfully rolled out now to 18 of these countries
with minimum committed ARR of c.£260K, bringing the customer's number of
telephony vendors down from 20 to 1 in those countries. The remaining 12
countries are scheduled to be rolled out by March 2023. Other customer wins
include a US-headquartered Fortune 100 technology company, a
Germany-headquartered global industrial group, an Asia-Pacific-headquartered
global food group, and a French-headquartered global logistics company.
In addition to these 60 customer wins, the Group's sales pipeline of potential
new Cloud Telephony opportunities continues to grow and now stands at more
than £100 million of additional potential ARR, of which approximately 15% is
at written proposal stage or later. The pipeline includes:
· Proofs of Concept (PoC)
- Sometimes PoCs are needed in order to win a customer, whereby the potential
customer can pilot the technology and confirm that it works in their IT
environment
- LoopUp's track record of completed PoCs is a 94% conversion rate into
successful customer wins
- In its current pipeline, the Group has 11 live PoC projects and 16 further
requests for proposal, so 27 PoC opportunities in total, including with a
top-5 global law firm, a Big-4 accounting firm, a major global sportswear
company, and a leading holidays group
· Strong opportunities
- Separately to the above PoC opportunities, the Group has 41 contract
opportunities in its pipeline that it expects to close by the end of 2022,
which are expected to represent minimum contracted ARR of c.£630K
- 17 of these 41 new contract opportunities are with the Group's 60 existing
customers (i.e. continued geographic rollouts), and 24 are with new customers
that the Group expects to win in this period
The Group is achieving this strong and accelerating commercial traction in
Cloud Telephony due to its differentiated offer for multinational mid-market
and enterprise customers versus competition from telecommunications carriers
and UC platform calling plans. Specifically, this includes the Group's:
· Highest quality routing voice network, built over 16 years for international
legal conference calls;
· Underlying relationships with 19 Tier-1 carrier partners, facilitating full
domestic PSTN replacement including number porting, domestic CLI pass-through
and emergency services calling;
· Licensed / regulatory-compliant geographic coverage, expected to span c.80
countries by early 2023 (including China and India);
· Customer connectivity options - UC-integrated / SIP / hybrid - for
future-proofed customer decision-making at varied stages of the Cloud
Telephony technology journey;
· Global Management Portal software layer, for consistent service visibility and
administration, globally;
· Span of expertise encompassing Unified Communications (including Microsoft's
'Advanced Specialization' - the competency level above gold partnership status
- in Teams telephony), VoIP/SIP, telecommunications and software; and
· PerfectBundle pricing for spend commitment pooling across a multinational
customer's global billing entities.
Hybridium
Following the acquisition of SyncRTC Inc. in October 2021 (www.hybridium.com
(http://www.hybridium.com) ), rebranded Hybridium combines video wall,
hologram and virtual live stage technology, bringing unrivalled engagement and
analytics to larger scale hybrid education, corporate training and events such
as management onsites, departmental kick-offs, capital markets days and
thought leadership seminars. Events with Hybridium benefit from ultra-low
latency at ultra-high resolution, with full video wall layout flexibility
facilitating any content on any screen.
In April 2022, Hybridium signed a deal with Telefónica for the deploying of
its solution at 'Universitas', Telefónica's global innovation and talent hub
located at its Madrid headquarters in Distrito Telefónica. While the Group
wishes to sell Hybridium to more large enterprises, such as Telefónica, and
while building pipeline for such opportunities is very achievable in the post
pandemic hybrid working environment, the purchase ticket price is material
(with the associated hardware), and many enterprises are still in the phase of
assessing and formulating their future working policies rather than making
major investments.
As such, the Group's primary planned route to market for this technology in
the near term will be via renting a LoopUp-owned and managed facility, which
will be at a much lower ticket price of approximately £15,000 per half day
rental. The Group has identified a primary location in the City of London and
is at heads of terms for a lease. The Group believes this route to market has
the potential for fast investment payback and the potential to replicate in
other major urban centres, as well as being an effective shop window and
experiential facility for further enterprise sales such as Telefónica.
For context, planned forward-looking investment in Hybridium is materially
less than that in Cloud Telephony at approximately one tenth of the
investment.
Capital Raising
As announced on 28 and 29 September 2022, subject to shareholder approval at
General Meeting to be held on October 17 2022, the Group has successfully
closed a Capital Raising for approximately £3.5 million, by way of an
institutional placing and direct subscriptions with the Company, at an issue
price of £0.05.
Additionally, Turner Pope Investments Limited ("TPI") is currently conducting
a broker offer (the "Broker Offer") allowing additional subscriptions from
investors who did not participate in the Capital Raising for new Ordinary
Shares through TPI at the same £0.05 Issue Price with a value expected to be
around £1.0 million (and which may be increased by agreement between the
Company and TPI in the case of sufficient demand), with priority being given
to existing shareholders.
The Capital Raising, the proceeds of the Broker Offer and the expected cash
generation from the PGi Connect agreement, will:
· support the next phase of investment in Cloud Telephony (primary) and
Hybridium (secondary);
· support the transfer of Meetings customers from PGi Connect;
· provide near term working capital for the Group; and
· strengthen the Group's balance sheet going forward.
Restructuring of existing debt arrangements
In 2018, the Group entered into a term loan with Bank of Ireland for £17.0
million, which has since reduced to a current balance of £6.9 million, and a
revolving credit facility. On the basis of the Group's deal with PGi Connect
and this proposed Capital Raising, the Group and Bank of Ireland have agreed
the following changes to the term loan arrangements:
· A new set of covenants will apply, reflecting the improved outlook of the
Group based on a minimum liquidity level, EBITDA performance and Cloud
Telephony revenue;
· 50% of the Capital Raising above the minimum £2.7 million net proceeds level
(i.e. £3 million gross proceeds less fees of approximately £0.3 million)
will be applied to previously-agreed principal repayment holidays through to
June 2023, as announced in the Group's preliminary results on 7 June 2022;
· The interest rate of 4.5 percent above the Sterling Overnight Index Average
(SONIA) will continue to apply;
· Breaches by the Company over the past two months of previous (now
renegotiated) financial covenants or information provision requirements are
waived; and
· The additional revolving credit facility for £1.5 million, which the Group
has drawn on over recent months, will be repaid in full and cancelled.
Outlook
The PGi Connect deal, together with the proposed Capital Raising, gives the
Group the cash boost it needs to take its primary Cloud Telephony business
through the next phase of growth. The Group's solution is materially
differentiated for the multinational segment in the large, growing Cloud
Telephony market, and the Group is now building upon clearly accelerating
commercial traction and success.
Steve Flavell Michael Hughes
co-CEO co-CEO
Unaudited consolidated statement of comprehensive income for the six months to
30 June 2022
£'000 Six months to Six months to Year to
30 June 2022 30 June 2021 31 December 2021
Revenue 6,632 11,500 19,526
Cost of sales (2,211) (3,793) (6,058)
Gross profit 4,421 7,707 13,468
Adjusted operating expenses ((1)) (5,967) (6,515) (12,272)
Adjusted EBITDA ((2)) (1,546) 1,192 1,196
Depreciation (806) (845) (1,760)
Amortisation of development costs (2,722) (2,769) (5,582)
Adjusted operating profit / (loss)((3)) (5,074) (2,422) (6,146)
Exceptional reorganisation costs (259) (407) (392)
Exceptional impairment charge - - (19,597)
Amortisation of acquired intangibles (925) (1,105) (2,211)
Share-based payment charges (602) (300) (2,208)
Total administrative expenses (11,281) (11,941) (44,022)
Operating profit / (loss) (6,860) (4,234) (30,554)
Finance costs (212) (204) (465)
Profit / (loss) before income tax (7,072) (4,438) (31,019)
Income tax (121) (83) 6,052
Profit / (loss) for the period (7,193) (4,521) (24,967)
Other comprehensive income and loss
Currency translation gain / (loss) 27 (190) (340)
Total comprehensive income / (loss) for the period attributable to the equity (7,166) (4,711) (25,307)
holders of the parent
Earnings / (loss) per share (pence) - Note 4
- Basic and diluted adjusted ((4)) (5.4) (4.9) (7.7)
- Basic and diluted (7.1) (8.2) (39.0)
(1. ) Total administrative expenses excluding depreciation, amortisation of
development costs and acquired intangibles, exceptional reorganisation costs,
exceptional impairment charge and share-based payment charges.
(2. ) Adjusted EBITDA is operating profit/(loss) stated before depreciation,
amortisation of development costs and acquired intangibles, exceptional
reorganisation costs, exceptional impairment charge and share-based payment
charges.
(3. ) Adjusted operating profit/(loss) is operating profit/(loss) stated before
amortisation of acquired intangibles, exceptional reorganisation costs,
exceptional impairment charge and share-based payment charges.
(4. ) Basic adjusted and diluted adjusted earnings per share are calculated using
profit/(loss) attributable to equity holders adjusted for exceptional
reorganisation costs, exceptional impairment charges, amortisation of acquired
intangibles and share based payment charges.
Unaudited consolidated statement of financial position at 30 June 2022
£'000 30 June 2022 30 June 2021 31 December 2021
(Restated)
Assets
Non-current assets
Property, plant and equipment 1,985 2,504 2,368
Right of use assets 1,717 2,452 2,130
Intangible assets:
- Development costs 12,384 11,577 12,726
- Other intangible assets 5,397 26,341 5,638
- Goodwill 35,425 31,511 35,425
Total non-current assets 56,908 74,385 58,287
Current assets
Trade and other receivables 3,632 4,331 3,608
Cash and cash equivalents 662 5,019 5,465
Current tax 2,063 1,567 1,862
Total current assets 6,357 10,917 10,935
Total assets 63,265 85,302 69,222
Liabilities
Trade and other payables (3,796) (2,585) (3,384)
Accruals and deferred income (1,659) (1,818) (2,036)
Lease liabilities (762) (724) (956)
Borrowings (1,700) (1,700) (1,700)
Total current liabilities (7,917) (6,827) (8,076)
Net current assets/(liabilities) (1,560) 4,090 2,859
Non-current liabilities
Borrowings (6,948) (10,200) (6,181)
Lease liabilities (1,468) (2,102) (1,463)
Deferred tax liability (1,721) (6,099) (1,721)
Provisions (172) - (172)
Total non-current liabilities (10,309) (18,401) (9,537)
Total liabilities (18,226) (25,228) (17,613)
Net assets 45,039 60,074 51,609
Equity
Share capital 518 277 485
Share premium 71,129 60,677 70,860
Other reserve 12,691 12,691 12,691
Foreign currency translation reserve (2,722) (2,662) (2,749)
Share based payment reserve 3,689 1,654 3,395
Retained loss (40,266) (12,563) (33,073)
Shareholders' funds attributable to equity owners of parent 45,039 60,074 51,609
Unaudited consolidated statement of changes in equity at 30 June 2022
£'000 Share capital Share premium Other reserve Foreign currency translation reserve Share based payment reserve Retained loss Shareholders' funds / (deficit) attributable to equity owners of parent
Balance at 1 January 2021 (restated - note 6)
277 60,677 12,691 (2,409) 1,354 (8,106) 64,484
Total comprehensive (loss) - - - (190) - (4,521) (4,711)
Equity share-based payment compensation - - - - - 300
300
Balance at 30 June 2021 277 60,677 12,691 (2,599) 1,654 (12,627) 60,073
Total comprehensive (loss) - - - (150) - (20,446) (20,596)
Equity share-based payment compensation
4 163 - - 1,741 - 1,908
Proceeds from share issues 204 10,020 - - - - 10,224
Balance at 31 December 2021 485 70,860 12,691 (2,749) 3,395 (33,073) 51,609
Profit and total comprehensive income / (loss)
- - - 27 - (7,193) (7,166)
Equity share-based payment compensation
33 269 - - 294 - 596
Balance at 30 June 2022 518 71,129 12,691 (2,722) 3,689 (40,266) 45,039
Unaudited consolidated statement of cash flows for the six months to 30 June
2022
£'000 Six months to Six months to Year to
30 June 2022 30 June 2021 31 December 2021
Operating activities
Profit / (loss) before tax (7,072) (4,438) (31,019)
Non-cash adjustments:
Depreciation and amortisation 4,413 4,625 9,548
Share based payment charge 602 300 2,208
Impairment charges - - 19,597
Interest payable 212 204 465
Working capital adjustments:
(Increase) / decrease in trade and other receivables (24) 2,544 3,377
Increase / (decrease) in trade and other payables 34 (5,464) (4,864)
Net income tax received / (paid) (302) (45) 1,194
Cash generated from/(used in) operations (2,137) (2,274) 506
Cash flows from investing activities
Purchase of property, plant and equipment (38) (218) (586)
Development expenditure (3,000) (2,957) (6,919)
Payment for acquisition of subsidiary - - (3,574)
Net cash used in investing activities (3,038) (3,175) (11,079)
Cash flows from financing activities
Proceeds from share issues - - 10,391
Repayment of loans - (850) (5,839)
Payments for leased assets (379) (374) (840)
Loans acquired on acquisition - - 971
Credit facility 930 - -
Interest and finance fees paid (152) (204) (365)
Net cash generated from/(used in) financing activities 399 (1,428) 4,318
Net increase / (decrease) in cash and cash equivalents (4,776) (6,877) (6,255)
Cash and cash equivalents brought forward 5,465 12,086 12,086
Effect of foreign exchange rate changes (27) (190) (366)
Cash and cash equivalents carried forward 662 5,019 5,465
Notes to the financial information for the six months ended 30 June 2022
1. General information
LoopUp Group plc (AIM: "LOOP", "LoopUp Group", or the "Group") is a global
provider of hybrid communication software and services. It is a public
limited 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.
2. Basis of preparation and significant accounting policies
These consolidated interim financial statements have been prepared in
accordance with UK adopted International Accounting Standards ("IFRS") and
IFRS Interpretations Committee (formerly IFRIC) interpretations in accordance
with international accounting standards in conformity with the requirements of
the Companies Act 2006. 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 2021 has
been derived from the full Group accounts published in the Annual Report and
Accounts 2021, 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 2021 statutory accounts, which are based on the
recognition and measurement principles of IFRS.
These unaudited interim results have been prepared on the going concern basis.
At the balance sheet date, the Group had cash of £0.7m and net assets of
£45m. As announced on 1 September 2022, the Group has entered into an
agreement whereby it has the right to transfer materially all of the business
of PGi Connect, which the Directors expect to contribute around £5m of net
cash to the Group in the twelve months following transition. As announced on
29 September 2022, the Group has raised additional capital of approximately
£3.5m. Given these factors and based on detailed forecasts prepared by
management, the Directors have a reasonable expectation that the Group has
adequate resources to continue operations for the next twelve months, and as
such these results have been prepared on a going concern basis.
The results for the six months ended 30 June 2022 were approved by the Board
on 30 September 2022. A copy of these interim results will be available on the
Group's web site www.loopup.com from 30 September 2022.
The principal risks and uncertainties faced by the Group have not changed from
those set out in the Annual Report and Accounts 2021.
No impact is anticipated from new standards coming into effect from 1 January
2022.
3. Revenue and segmental reporting
IFRS 8 Operating Segments requires operating segments to be identified on the
same basis as is used internally for the review of performance and allocation
of resources by the CODM. 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 CODM.
In July 2020, the Group announced a major extension to the LoopUp proposition
to include global cloud voice services via Direct Routing integration with
Microsoft Teams (known as Cloud Telephony). This capability, alongside the
Group's longstanding Remote Meetings and Managed Events capabilities, combine
into a category termed LoopUp Platform Capabilities (LPC). Revenue from resale
of Cisco WebEx services is categorised as 'third party resale services'. In
addition to the above segments adopted in the 2020 annual report and accounts,
this year a new segment exists as a result of the acquisition of SyncRTC in
October 2021, that of Hybridium.
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 both years.
No segmental balance sheet was presented to the CODM. It is not possible to
allocate overheads, and therefore profits, by segment due to the pooled
nature of the overhead base and the capital structure. Overheads are not
presented to the CODM on a segmental basis.
The Group's revenue disaggregated by primary geographical markets is as
follows:
£'000 6 months to 30 June 2022 6 months to 30 June 2021 12 months to 31 December 2021
UK 2,674 5,417 8.664
EU 1,058 1,904 3,455
North America 2,813 4,015 7,108
Rest of world 87 164 299
6,632 11,500 19,526
The Group's revenue disaggregated by pattern of revenue recognition is as
follows:
£'000 6 months to 30 June 2022 6 months to 30 June 2021 12 months to 31 December 2021
Services transferred at a point in time 4,237 11,397 12,750
Services transferred over time 2,395 103 6,776
6,632 11,500 19,526
The Group's revenue disaggregated by segment is as follows:
£'000 6 months to 30 June 2022 6 months to 30 June 2021 12 months to 31 December 2021
LoopUp Platform Capabilities 4,590 8,925 14,843
Third party resale services 1,642 2,575 4,441
Hybridium 400 - 242
6,632 11,500 19,526
The Group's non-current assets disaggregated by primary geographical markets
are as follows:
£'000 6 months to 30 June 2022 6 months to 30 June 2021 12 months to 31 December 2021
UK 55,222 73,063 56,851
EU 170 1 253
North America 1,513 715 1,181
Rest of world 3 3 2
56,908 73,782 58,287
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.
6 months to 30 June 2022 6 months to 30 June 2021 12 months to 31 December 2021
Profit / (loss) attributable to equity holders (£'000) (7,193) (4,521) (24,967)
Adjusted profit attributable to equity holders (£'000) ((1)) (5,407) (2,709) (4,938)
Weighted average number of ordinary shares in issue ('000) 100,783 55,441 63,992
Basic earnings per share (pence):
- Basic adjusted ((1)) (5.4) (4.9) (7.7)
- Basic (7.1) (8.2) (39.0)
(1.) Calculated using profit / (loss) for the period, adjusted for exceptional
reorganisation costs, exceptional impairment charges, amortisation of acquired
intangibles and share based payment charges.
Since the Group made a loss in each of the periods above, there were no
potentially dilutive shares that were not anti-dilutive, and the diluted
earnings per share is identical to the basic earnings per share.
5. Dividends
The directors did not recommend the payment of a dividend for the years ended
31 December 2021 or 2020, or the six month periods ended 30 June 2022 or 2021.
6. Prior year restatements
The annual report and accounts for the year ended 31 December 2021 set out
certain restatements made to prior years which impact on the 30 June 2021
comparative figures in this interim financial information.
(a) Right of use assets
During 2021, the Group identified that certain assets, liabilities and charges
relating to right of use assets had been misstated in prior years. These
balances were restated as at 1 January 2020 and 31 December 2020, and the
total adjustment affecting the 30 June 2021 comparatives is set out below:
£'000
Right of use asset 603
Lease liabilities (977)
Prepayments 131
Trade creditors 60
Opening reserves 183
(b) Deferred tax
During 2021, the Group identified that in 2020 the deferred tax liability
relating to the customer relationship and brand assets recognised on the
acquisition of MeetingZone had been calculated at the incorrect main
corporation tax rate. This deferred tax liability was initially calculated
using a tax rate of 17%, as the reduction to this rate had been substantively
enacted through parliament. However, in 2020, the UK government announced that
the rate would remain at 19%. An adjustment should have been made in 2020,
through the deferred tax charge, to reflect the new tax rate. The adjustment
results in an increase of £518,000 in the Group's deferred tax charge and
deferred tax liability in 2020.
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR QKLFLLKLLBBKRecent news on Loopup
See all newsREG - LoopUp Group PLC - Last day of dealings of Ordinary Shares on AIM
AnnouncementREG - FTSE Russell - Loopup Group
AnnouncementREG - LoopUp Group PLC - Results of General Meeting
AnnouncementREG - LoopUp Group PLC - PDMR Dealings and Total Voting Rights
AnnouncementREG - LoopUp Group PLC - PDMR Dealings
Announcement