TIDMCALL
RNS Number : 3842M
Cloudcall Group PLC
21 January 2021
21 January 2021
CloudCall Group plc
("CloudCall", the "Company" or the "Group")
Trading update for the year ended 31 December 2020
A YEAR OF TWO HALVES, GROWTH RESTORED IN H2, TOTAL REVENUE AT
UPPER OF REVISED GUIDANCE, RECURRING REVENUES UP 13%
2020 highlights:
-- Total revenue of GBP11.8m (up 4% y-o-y)
-- Achieved upper end of revised guidance range
-- Growth post initial COVID-19 impact restored, with many KPIs now back to pre COVID-19 levels
-- Total recurring revenue up 13% y-o-y to GBP10.3m
-- US revenue up 10%, to GBP4.9m
-- Recurring and repeating revenue increased to over 94%
-- Total users up 14% to 48,255
-- Launch of Microsoft Teams integration & 'Property and Real Estate' vertical
-- Available gross cash resources of GBP5.7m at the end of the period
CloudCall (AIM: CALL; OTCQX: CLLLF), the integrated
communications company that provides communications and contact
centre software that integrates with Customer Relationship
Management ("CRM") platforms, announces the following trading
update for the year ended 31 December 2020.
The Group is pleased to confirm it has achieved total revenues
at the upper end of the revised guidance issued during the second
half of 2020, whilst cash, operating expenses (which include
one-time COVID-19 related savings) and losses before tax are all
expected to be broadly in-line with market expectations, subject to
year-end financial close and audit procedures.
The Group's gross cash balance was GBP5.7m at the period-end,
including drawn debt of GBP2.1m, with net cash of GBP3.6m. During
the year, the Group received GBP0.8m in R&D tax credit and
expects to receive at least a similar amount in 2021.
Total revenues increased by 4% to GBP11.8m and recurring
revenues increased by 13% to GBP10.3m when compared to the previous
year. However, these annual figures mask the true story of 2020
which was undoubtedly a year of two halves.
In the first half of 2020, following a positive start to the
year, the initial shock waves of the global COVID-19 pandemic
materially slowed sales and increased churn levels, resulting in
Monthly Recurring Revenue (MRR) at the half year dropping by 7%
compared to the start of the year. Since then, churn rates have
reduced and sales have materially increased, resulting in a 12%
growth in MRR across the second half of 2020.
During the year, the Group increased its number of end users by
+5,900 or 14% to 48,255 users. However, once again, there was a
marked difference between the two halves of the year, with H1
average monthly net user growth at 245 users compared to H2 which
saw a threefold increase to 740 users. The final month of the year
saw continued progress on this front, with December's monthly net
user growth increasing to an encouraging 881 users.
Across the second half of the year, performance steadily
improved in all areas and we are pleased to report that the ongoing
pandemic had a limited negative impact in the final quarter of the
financial year.
A year of two halves
The below table demonstrates this 'year of two halves', setting
out a number of KPIs for each of the six-months performance from H2
2019 to H2 2020.
2H 2020 vs
2H 2019 1H 2020 2H 2020 1H 2020
Average monthly
net new users 902 245 740 Up 202%
----------- ----------- ---------- -------------
Total users at
period end 42,348 43,815 48,255 Up 10%
----------- ----------- ---------- -------------
Net renewal rate
(MRR) 105% 85% 100% Up 18%
----------- ----------- ---------- -------------
LTV : CAC(1) 5.4 1.5 5.3 Up 253%
----------- ----------- ---------- -------------
Recurring revenue GBP28.0 GBP26.0 GBP26.5 Up 2%
per user (RRPU)
----------- ----------- ---------- -------------
MRR movement % +18.5% -7.5% +12.2%
----------- ----------- ---------- -------------
(1) The ratio of Lifetime Value (LTV) derived from each new user,
to the acquisition cost (CAC) of that user
CloudCall's relevance for distributed workforces
The CloudCall service has several features that are beneficial
for home or remote workers, making it highly relevant in today's
distributed working environment. These include being cloud-based,
recording and logging calls inside the customer's CRM, and the
ability for managers to remotely see which staff members are on a
call and to listen-in or even join that call if required -
particularly beneficial when remotely training new starters. As a
result, new business sales delivered a strong improvement during
the second half of the year.
The Board believes this product relevance, combined with the
ongoing improvements in sales and marketing processes being driven
by the strengthened Executive team have led to many of the Group's
sales KPIs such as leads generated, demos completed and converted,
value of new business signed, numbers of new customers and users
signed up and value signed per sales representative recovering to
above pre-COVID-19 levels in H2.
To further strengthen the Group's product offering and reflect
the recent changes to global working practices, on the 25 November
2020, the Group launched an integration with Microsoft Teams,
linking Microsoft Teams and partner CRMs. Whilst still early into
the rollout, initial response rates have been encouraging, and the
Company will provide a further update on progress at the time its
FY20 full year results are published.
The Group's CRM integration strategy is working
During 2020, the Group made good progress with its strategy to
expand its addressable market and broaden its customer base by
adding 8 new or refreshed CRM integrations, including 3 CRMs in the
new 'Property & Real Estate vertical'.
The strategy is working well with these new CRMs already
contributing approximately 20% of the total number of new customers
won by the Group in the year. Furthermore, despite the Property
& Real Estate vertical only formally launching on 22 October
2020, 18 of these new customers are from that vertical.
Whilst 2020 was the first full year of the new growth plan for
the Group, CloudCall's go-to-market strategy has robustly weathered
the COVID-19 related economic events and the strength of the
Group's platform continued to be demonstrated during the second
half of the year. As illustrated in the below table, CloudCall has
generated attractive lead conversion metrics which we have seen are
further improved where there is a strong relationship with an
integrated CRM partner.
Whilst the 'Lead to Close' and 'Demo to Close' ratios highlight
the efficiency and effectiveness of CloudCall's go-to-market
strategy, it was also pleasing to see these metrics continuing to
improve throughout 2020, one of the primary drivers for a 44%
half-on-half increase in sales value per sales head - further
increasing efficiency.
Lead to close Demo to Close New Customers Year 1 Revenue
% % (1) closed
(2)
All CRMs 14% 52% 459 GBP2.8m
-------------- -------------- -------------- ---------------
Large Recruitment
CRM 28% 63% 195 GBP1.6m
-------------- -------------- -------------- ---------------
New CRMs in 2020 27% 43% 91 GBP0.4m
-------------- -------------- -------------- ---------------
Conversion metrics from leads generated in 2020 should continue
to grow as those leads continue to be worked on
1.New customers signed up in 2020
2.Year 1 revenue refers to the first year of revenue expected
from customers signed. Depending upon signing date, this revenue
will potentially be delivered across more than one financial
period.
Other areas of progress
Australia
The Australian operation is now up and running, generating
customer revenues and beginning its growth journey. The 5-strong
team in Australia is already looking after 18 customers with a
combined annual recurring revenue of GBP175k coming on stream. We
are excited to see this team drive further grow in the coming
years, as this business begins to scale.
Executive Team
We are delighted to report that the recent additions to our
Executive Team, including the appointments of James Maloney (Chief
Revenue Officer), Paul Clark (Chief Technology Officer) and Gail
Wilkinson (Chief People Officer), have all made strong
contributions to the Group, including significant improvements to
our staff culture and welfare, our IT systems and our customers'
experience. Many of these improvements are already in progress or
are planned for 2021 and when fully implemented, will have an
important and pivotal role in helping the Group to achieve its
growth ambitions.
Whilst the COVID-19 pandemic sadly continues around the World,
the Board is prudently optimistic for the future of CloudCall,
given its compelling and relevant offering and the relatively
limited impact that the most recent UK lockdowns have had on the
business thus far. The improved performance during H2 2020 with its
12% growth in monthly recurring revenue and a robust pipeline of
new sales opportunities re-enforces this optimism.
The Group has been able to robustly weather the challenges
presented by COVID-19 to date. However, the Board is mindful that
the lost momentum from the first half of 2020 does mean that
CloudCall's growth strategy has essentially been delayed by
approximately one year. Nevertheless, the Board remains confident
in its ambition to now reach monthly EBITDA breakeven by mid-2023
and achieve a GBP50 million revenue run-rate during 2026.
The Company will provide a detailed update on 2020 performance
and guidance for 2021, alongside further information on its new
Microsoft Teams integration, planned transcription and AI based
monitoring and automation services (scheduled for launch in 2021)
by the end of March 2021 when it expects to release its Full Year
Report and Accounts.
Simon Cleaver, Chief Executive Officer of CloudCall,
commented:
"As the year progressed, the significant COVID-19 headwind we
encountered in the first half of the year has reversed, to become
an important adoption driver for our products and services. This is
strongly evidenced in the recovery in our sales and marketing KPIs
during the second half of the year. Many of which have now improved
to levels above where they were before the COVID-19 pandemic took
hold.
Whilst COVID-19 continues to impact the broader global economic
environment, I am pleased to report that despite these challenges,
we have been hard at work strengthening the business with
considerable investments in sales and marketing, our senior
management team and our internal tools and processes, all of which
improve our scalability and readiness to drive forward as the
markets return. We are already seeing the benefits of these
investments in 2H 2020 and we look forward with confidence to a
strong return to growth in 2021 and beyond.
Once again, I would like to extend my thanks to our much-valued
employees, partners and customers for their extraordinary work and
support over the past twelve months. Whilst it has been a
challenging year for many, we remain collectively focused on
achieving our goal and growing CloudCall into the go-to integrated
communications company for CRMs."
For further information, please contact:
CloudCall Group plc Tel: +44 (0)20 3587
Simon Cleaver, Chief Executive 7188
Officer Paul Williams, Chief Financial
Officer
Canaccord Genuity Limited Tel: +44 (0)20 7523
Simon Bridges Richard Andrews 8000
About CloudCall Group Plc
CloudCall is a software and unified communications business that
has developed and provides a suite of cloud-based software and
communications products and services. CloudCall's products and
services are aimed at enabling organisations to leverage their
customer data to enable more effective communications and improve
performance.
The CloudCall suite of software products allows companies to
fully integrate telephony, messaging and contact centre
capabilities into their existing customer relationship management
(CRM) software, enabling communications to be made, recorded,
logged and categorised from within the CRM system with detailed
activity reporting and powerful business intelligence capable of
being easily generated.
At the end of December 2020, the Company had approximately 160
staff based predominantly in Leicester and London (UK), Boston
(US), Minsk (BY) and Sydney (Australia) with just over 48,250 end-
users relying on CloudCall technology to power their daily
communications.
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END
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