REG - LoopUp Group PLC - Trading Statement

LoopupAnnouncement

15/02/2022 07:00

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RNS Number : 6579B  LoopUp Group PLC  15 February 2022

15 February 2022

LOOPUP GROUP PLC

("LoopUp" or the "Group")

Trading update

 

LoopUp Group plc (AIM: LOOP), the cloud platform for premium external
communications, announces a trading update for its financial year ended 31
December 2021.

 

The Group expects both revenue and EBITDA for year ended 31 December 2021 to
be broadly in line with market expectations with outturns at approximately
£19.5 million (FY2020: £50.2 million) and £0.9million (FY2020: £15.3
million) respectively.

 

The Group ended the year with gross cash of £5.5 million (FY2020: £12.1
million) and net debt of £2.5 million (FY2020: £0.7 million), following the
successful placing and retail offer for approximately £8.85 million in
September 2021.

 

Cloud Telephony

 

In Q3 2020, the Group announced the launch of its Cloud Telephony solution,
integrated into Microsoft Teams via 'Direct Routing' peering with Microsoft,
which enables users to make phone calls to external phone numbers and receive
phone calls to their own work phone numbers, all seamlessly via their Teams
enabled devices. LoopUp's differentiated platform enables multinational
enterprises to consolidate their telephony provision globally with one vendor
partner - LoopUp - rather than multiple geographic-specific carriers.

 

Cloud Telephony is now squarely at the heart of the Group's forward-looking
growth strategy. During FY2021, the Group won 31 new direct contracts, an
incremental 8 over and above the 23 announced in the Group's 16 November 2021
trading update. The 31 wins are concentrated in the mid-large sized
multinational enterprise market, and span a broad range of industries
including technology, manufacturing, pharmaceuticals, logistics, packaging,
education, public sector, financial services, law and corporate
communications.

 

In aggregate, these 31 new contract wins bring a baseline minimum total
contract value of £2.4 million for initially committed and contracted rollout
phases. This increases to an expected c.£8.6 million should geographic
rollouts proceed as expected. These geographic rollouts (generally over 6-18
months), together with additional lead-time for minimum contracted revenue to
take effect in each rollout phase (generally 3-6 months), means the lag from
bookings to revenue is proving to be more pronounced than previously
anticipated. That notwithstanding, initial contractual term durations are
typically for three years from the point that minimum contracted revenue
starts to apply, and the Group expects customers to be very sticky once
deployed.

 

To date, all customer deployments have been successful, and all rollouts are
progressing positively.

 

The Group's sales pipeline of direct Cloud Telephony opportunities has
continued to grow and mature, reaching approximately £72 million of potential
Annual Contract Value (ACV) by the end of FY2021 (end H1 2021: £58 million),
of which 19% is at written proposal stage or later (end H1 2021: 17%).

 

Outlook

 

The Group expects FY2021's strong performance in Cloud Telephony new wins to
improve further to at least an additional 50 during FY2022, and the
integration of SyncRTC (acquired in October 2021) is progressing well. Due to
the longer lag from bookings to revenue in Cloud Telephony, combined with
continued expected pressure on its Remote Meetings business, the Group expects
FY2022 revenue to be in the £15-16 million range. The Group is managing its
operations carefully during this strategic transition to preserve cash and
maintain EBITDA profitability in FY2022, at a higher expected margin than
FY2021.

 

Steve Flavell and Michael Hughes, co-CEOs of LoopUp, commented:

"As we continue to manage our strategic transition, we are pleased with the 31
new customer wins achieved during our first full year of business in Cloud
Telephony for Microsoft Teams. The potential for a consolidated service
provision layer above the telecommunications carriers to serve the
multinational enterprise market is exciting, and we are well positioned to
build material shareholder value in this endeavour. This is testament to our
differentiated technology platform and the tremendous hard work and innovation
of our team."

 

Market abuse regulation:

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018.

 

 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 specialist
communications, focusing on capabilities that complement foundational unified
communications platforms, such as Microsoft Teams. The Group's flagship Cloud
Telephony solution for Microsoft Teams enables enterprise customers to
eliminate disparate on-premises phone systems and multiple telecommunications
service providers, and consolidate their global telecommunications into a
single cloud implementation. LoopUp's global IP backbone interconnects with 18
carefully selected regional carrier partners and the Group has market-leading
coverage as a licensed telecommunications service provider. 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. For further information, please visit: www.loopup.com
(http://www.loopup.com) .

 

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