TIDMLOOP
RNS Number : 5991U
LoopUp Group PLC
29 March 2023
29 March 2023
LOOPUP GROUP PLC
("LoopUp" or the "Group")
Trading update
Material uplift in Q4 revenue run-rate
LoopUp Group plc (AIM: LOOP), the cloud platform for premium
external communications, is pleased to announce a trading update
for its financial year ended 31 December 2022.
Material jump in revenue
The Group now expects a material jump in Q422 revenue to
approximately GBP7.2 million following the PGi Connect transaction
announced in September 2022, and so a strong run-rate heading into
FY23. However, the Directors note that they continue to expect
attrition over time to revenue from the Group's Meetings business,
including that from the PGi Connect transaction.
For the full financial year ended 31 December 2022, the Group
expects:
-- FY22 revenue above market expectations at approximately
GBP16.5 million (H122: GBP6.6 million; FY21: GBP19.5 million);
-- FY22 Adjusted EBITDA(1) loss in line with market expectations
at approximately GBP1.0 million (H122: GBP1.5 million
loss; FY21: GBP1.2 million profit); and
-- FY22 year-end gross cash of GBP1.7 million (FY21: GBP5.5
million) and net debt of GBP5.8 million (FY21: GBP2.5
million), following the successful subscription and placing
for approximately GBP3.5 million in September 2022.
Commercial traction in Cloud Telephony
Cloud Telephony now sits squarely at the heart of the Group's
forward-looking growth strategy, and the Group achieved strong
operational progress and commercial traction during FY22:
-- Customer numbers grew by 172%, a growth of 50 customers
from the 29 at the end of FY21 to 79 at the end of FY22.
-- Individual contract numbers with the Group's customers
grew 229%, a growth of 117 contracts from the 51 contracts
at the end of FY21 to 168 at the end of FY22. This reflects
the fact that the Group is targeting the multinational
mid-market and enterprise segments, where customer wins
generally involve geographic rollouts. As such, the ratio
of contracts per customer grew from 1.76 at the end of
FY21 to 2.13 at the end of FY22.
-- Booked Annual Recurring Revenue (ARR) from these 79 customers
at the end of FY22 stood at GBP1.8 million minimum contractually
guaranteed and c.GBP3.1 million expected. Nearly all customers
are on 3-year initial term licence contracts.
-- Net Revenue Retention (NRR) was 159% in FY22, being the
ratio of booked ARR at the end of FY22 to booked ARR at
the end of FY21 from the cohort of 29 customers in place
at the end of FY21.
-- The Group has experienced zero gross customer churn in
Cloud Telephony since entering the market.
-- Sales cycles can involve a Proof of Concept (POC), enabling
prospective customers to test our technology in their
own IT environment. The Group has achieved a 95 percent
POC conversion rate, with 19 out of 20 POC projects completed
by the Group having successfully converted into customer
wins.
The Group maintains a strong pipeline of future Cloud Telephony
sales opportunities (c.GBP100 million ARR) and is confident in the
growth prospects of this primary forward-looking line of
business.
Meetings
In September 2022, the Group announced a revenue sharing and
customer transfer agreement with PGi Connect, giving LoopUp the
rights to onboard materially all of PGi Connect's conferencing
services customers. While no initial or fixed consideration was
payable, the Group agreed to pay PGi Connect a share of invoiced
and received revenue(2) from successfully transferred customers for
a period of three years.
Since October 2021, approximately 7,000 customers have
transitioned from PGi Connect to LoopUp, leading to an increase in
the Group's revenue run rate of c.167% (c.GBP2.7 million in Q322 to
c.GBP7.2 million in Q422).
While this transitioned Meetings business is expected to decline
over time, it is nevertheless highly cash generative, with a gross
margin of 65-70 percent (after LoopUp COGS and PGi Connect revenue
share) and just c.GBP0.3 million in incremental quarterly staff and
overheads costs.
Outlook
Looking ahead, there are three primary factors influencing the
development of the Group's revenue progression, namely:
-- continued strong new business growth in the Group's primary
Cloud Telephony business;
-- a full year (rather than single quarter) of revenue from
the PGi Connect transaction; and
-- the continued projected decline in the Group's legacy
Meetings business (including PGi Connect).
Combining these factors, the Group expects:
-- approximately 25% revenue growth in FY23, driven primarily
by the full year impact of the PGi Connect transaction,
alongside a return to Adjusted EBITDA profitability;
-- marginal revenue growth in FY24 as Cloud Telephony growth
overtakes the decline in Meetings; and
-- strong double-digit revenue growth from FY25 onwards.
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.
(1) Earnings before interest, tax, depreciation and amortisation,
excluding share-based payments charges
(2) Approximately 13% on a weighted average basis
LoopUp Group plc via FTI
Steve Flavell, co-CEO
+44 (0) 20 7886
Panmure Gordon (UK) Limited 2500
Dominic Morley / Ivo Macdonald (Corporate
Finance)
+44 (0) 20 7397
Cenkos Securities Limited 8900
Giles Balleny / Dan Hodkinson (Corporate Finance)
Alex Pollen (Sales)
+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 platform for premium hybrid
communications. The Group's flagship Cloud Telephony solution for
Microsoft Teams enables multinational enterprises to consolidate
their global telephony provision into a single, consistently
managed cloud implementation rather than disparate implementations
from multiple carriers. The Group is listed on the AIM market of
the London Stock Exchange 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.
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END
TSTJLMATMTBTMAJ
(END) Dow Jones Newswires
March 29, 2023 02:00 ET (06:00 GMT)
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