TIDMLOOP
RNS Number : 0523G
LoopUp Group PLC
22 July 2021
22 July 2021
LOOPUP GROUP PLC
("LoopUp" or the "Group")
Update on Trading and Strategic Transition
LoopUp Group plc (AIM: LOOP), the cloud platform for premium
external communications, provides an update on its continued
strategic transition and trading for the six months ended 30 June
2021.
Trading Update
Over the past twelve months, the Group has been executing on its
strategy to expand its technology and business activities from a
traditional base of Remote Meetings services into a broader, more
valuable cloud platform for premium external and specialist
communications. These platform capabilities now also include Cloud
Telephony and Managed Events & Webcasts, both of which provide
strong opportunities for long-term growth.
Group trading in H1 2021 highlights this strategic transition.
In Cloud Telephony, we have seen a material acceleration in new
customer wins, with 15 now secured so far this year, and we are
optimistic about our pipeline of opportunities as detailed below.
In contrast, our Remote Meetings business continues to see
customers move to our more cost-effective committed term
subscription and minimum spend contracts (now approximately 62% of
total revenue), as well as sustained intense competition
particularly outside of our professional services primary segment.
We anticipate the positive trend for Cloud Telephony and
challenging trend for Remote Meetings will both continue in the
second half with a consequent effect on performance.
Specifically, the Group expects H1 2021 revenue to be no less
than GBP11.5 million, approximately 13% below management
expectations. EBITDA is expected to be no less than GBP1.0 million,
driven by a balance of investment in the Group's platform
transition alongside careful cost control, with staff and overhead
costs running approximately 20 percent below average FY 2020
levels. Thanks to the accelerating momentum in Cloud Telephony,
combined with new scalable indirect routes to market outlined
below, the Group anticipates a return to top line monthly growth
during H2 2021 and material annual growth in FY 2022 and
beyond.
Cloud Telephony: Material Acceleration in New Customer Wins
The Group has achieved a material increase in Cloud Telephony
new customer wins, accelerating from three during Q1 to 15 now
secured year-to-date. C ollectively, these represent a Total
Contract Value ("TCV") ranging from a minimum of GBP1.7 million for
initially committed deployment phases to an expected potential of
c.GBP5.1 million as intended rollouts proceed.
A central theme underlying the majority of these customer wins
is the broad international coverage of LoopUp's Cloud Telephony
offering. In this respect, the Group remains comfortably ahead of
its stated target to be a fully-licensed telecommunications service
provider in at least 60 country jurisdictions by the end of 2021.
The Group's global platform and IP backbone now interconnects with
18 carefully selected regional Tier-1 carriers to deliver redundant
and 'highest quality routing' service to customers.
The Group's pipeline of directly sourced new Cloud Telephony
opportunities remains strong with a TCV of GBP117 million, and the
percentage of opportunities at an advanced stage has increased to
17% of pipeline value, from 7% at the end of March 2021.
Cloud Telephony: Indirect Distribution Pipeline Building
The Group is party to a growing number of material negotiations
with major Microsoft partners, systems integrators and carriers,
who are seeking a platform partner with differentiated geographic
coverage to bring Microsoft Teams Calling to their international
customer bases. Our value proposition is powerful in that it
enables these organisations to work with a single platform partner
globally - LoopUp - rather than multiple, country-specific or
regional carriers.
Negotiations with several of these potential go-to-market
partners are now at advanced stages, and the Group believes that
such alliances present a highly scalable and valuable additional
route-to-market in Cloud Telephony. We will update the market as
these opportunities convert in due course.
Steve Flavell and Michael Hughes, co-CEOs of LoopUp
commented:
"The first half of the year has underlined the validity and
potential of our shift to a broader, more valuable platform
strategy, particularly in the Cloud Telephony arena where our
internationally-differentiated offering is really resonating with
both customers and channel partners. We are taking the right steps
to rebalance our Remote Meetings business alongside investing in
the meaningful opportunity for growth that Cloud Telephony
represents.
The acceleration of new customer wins is a significant
endorsement of our Cloud Telephony solution, and while the Group as
a whole continues to execute on its transition, the size, potential
and value of our shift to a broader platform strategy continues to
build."
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
("MAR").
For further information, please contact:
LoopUp Group plc via FTI
Steve Flavell, co-CEO
+44 (0) 20 7886
Panmure Gordon (UK) Limited 2500
Dominic Morley / Alina Vaskina (Corporate
Finance)
Erik Anderson (Corporate Broking)
+44 (0) 20 3727
FTI Consulting, LLP 1000
Matt Dixon / Jamille Smith / Tom Blundell
About LoopUp Group plc
LoopUp (LSE AIM: LOOP) is a cloud communications platform for
external and specialist communications. We focus on capabilities
that complement foundational unified communications platforms, such
as Microsoft Teams: global cloud telephony, premium managed events
and webcasts, and business-critical external remote meetings. Our
flagship cloud telephony proposition enables 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 headquartered in
London, with offices in San Francisco, New York, Boston, Chicago,
Denver, Milton Keynes, Madrid, Berlin, Malmo, Hong Kong, Barbados
and Australia, and is listed on the AIM market of the London Stock
Exchange (LOOP). For further information, please visit:
www.loopup.com.
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