TIDMLOOP
RNS Number : 8817T
LoopUp Group PLC
30 March 2021
30 March 2021
LOOPUP GROUP PLC
("LoopUp Group" or the "Group")
Preliminary results for the year ended 31 December 2020
Strong cash generation facilitating strategic transition to a
broader technology platform
LoopUp Group plc (AIM: LOOP), the cloud platform for external
communications, is pleased to announce its unaudited preliminary
results for the year ended 31 December 2020.
Financial Highlights
FY2020 FY2019
Year-on-year
GBP million (unaudited) (audited) growth
------------------------------------------- ------------- ----------- -------------
Revenue 50.2 42.5 18%
Gross profit 35.6 28.2 26%
Gross margin 70.9% 66.4% +4.5 PPS
Revenue from LoopUp Platform Capabilities
(1) 43.0 34.4 25%
Gross profit from LoopUp Platform
Capabilities (1) 33.5 26.4 27%
Gross margin from LoopUp Platform
Capabilities (1) 77.8% 76.8% +1.0 PPS
Adjusted EBITDA (2) 15.3 6.4 239%
Adjusted EBITDA margin 30.5% 15.1% +15.4 PPS
Adjusted operating profit (3) 9.0 1.2 780%
Operating profit / (loss) 6.3 (2.1)
Cash 12.1 3.0
Net Debt 0.7 11.5
Adjusted diluted EPS (pence) (3) 15.4 2.0 770%
1. LoopUp Platform Capabilities (LPC) include Meetings, Cloud
Telephony and Event, but exclude Cisco WebEx Meetings resale
2. Earnings before interest, taxation, depreciation and
amortisation, adjusted to exclude exceptional reorganisation costs
and share-based payments charges
3. Adjusted to exclude exceptional reorganisation costs,
amortisation of acquired intangibles and share-based payments
charges
Operating Highlights
-- As announced in July 2020, the Group launched its
internationally-differentiated Cloud Telephony capability, enabling
customers to make and receive external phone calls via Microsoft
Teams
-- This marked the Group's first material step to expand its
strategic scope from remote meetings into a broader cloud platform
for premium external and specialist communications
-- LoopUp Platform Capabilities ("LPC") are designed to
complement and augment those in foundational Unified Communications
("UC") platforms, such as Microsoft Teams, and currently
include:
Cloud Telephony: primarily focused on relatively international
and fully-managed implementations for larger sized enterprises
Remote Meetings: primarily focused on business-critical,
external client meetings for Professional Services firms(1)
Managed Events and Webcasts: primarily focused on a premium
end-to-end experience for hosts and coordinators of important
virtual corporate events
-- Overall LPC trading was strong in FY2020:
LPC revenue: 25% growth to GBP43.0 million (FY2019:
GBP34.4m)
LPC gross margin: 1.0 percentage-point improvement to 77.8%
(FY2019: 76.8%)
LPC minutes: 41% growth to 1.00 billion (FY2019: 0.71
billion)
New Customer CAC Ratio (the fully-loaded cost to acquire GBP1 of
new ARR): improvement to GBP0.84 (FY2019: GBP1.38; 2020 SaaS
benchmark(2) of GBP1.63)
-- As announced in our 27 November 2020 update, while trading
spiked broadly at the onset of the pandemic, we subsequently
experienced a gradual decline and a stark divergence in performance
between core Professional Services ("PS") sectors and non-core,
non-PS sectors
Gross retention of 86% in PS (in line with 2020 SaaS benchmark:
86%), compared with 67% in non-PS
A 1% increase in Q4 2020 average revenue per day versus
pre-pandemic levels in PS, compared with a 31% reduction in
non-PS
-- The Group also encouraged a material migration from rolling
monthly pay-as-you-go contracts to more cost-effective but
locked-in committed term contracts. Such committed contracts
accounted for 48% of LPC business by the end of the year compared
with 13% at the start of the year
-- Continued innovation and development of our Meetings capabilities for the PS market
Augmented video to facilitate 20 concurrent cameras
Launched 'LoopUp Rooms', which leverages off-the-shelf hardware
to create high quality, plug-and-play video conferencing suites
Launched promotional 'freemium' plan to drive lead
generation
-- Closed the year with strong cash position of GBP12.1 million
(FY2019: GBP3.0m) and reduced net debt of GBP0.7 million (FY2019:
GBP11.5m)
Post Period Highlights
-- Commercial traction of the Group's new Cloud Telephony
capability has continued to gather pace since the start of 2021
New customer wins: 3 with minimum Total Contract Value ("TCV")
of GBP620,000, plus notification of a further RFP win although not
yet formally contracted
Proofs of Concept: 6 now live with customers (in addition to the
above wins)
Live opportunities pipeline: further growth to potential TCV of
GBP106 million(3) from a cold start in July 2020
Regulatory progress: ahead of target to be a fully-licensed
telecommunications service provider in at least 60 country
jurisdictions by the end of 2021
Indirect strategic distribution: a growing number of material
discussions with major global Microsoft partners, who are seeking
an internationally-differentiated implementation of Teams Cloud
Telephony for their multinational customer bases
-- Launched a webcasting enhancement to our Managed Events capability
Outlook
-- FY2021 is set to be a transitional year for the Group as we
migrate from a remote meetings business to a broader cloud platform
for external and specialist communications
1 Law, investment banking and corporate finance; private equity
and venture capital, asset and fund management, consulting,
accounting, marketing and advertising, PR, recruiting, and
property
2 KBCM Technology Group (formerly Pacific Crest Securities) SaaS
survey
3 Conservatively assuming an average contract term of 2
years
-- The Group is exploring a range of potential organic and
inorganic platform capability enhancements to advance its strategy
as a leading cloud platform for premium external and specialist
communications
-- While we expect competitive pressure persists in our
pay-as-you-go, non-PS Meetings customer base, this now represents
just 12% of total revenue
-- We also note residual market uncertainties relating to the COVID-19 pandemic
-- That said, we are nevertheless confident in our ability to
meet market profitability expectations for the year, albeit at a
potentially lower level of top line revenue
Steve Flavell and Michael Hughes, co-CEOs of LoopUp Group,
commented:
"The pandemic has shaken up the enterprise communications
market, and with it, we're actively driving strategic change into
our business. The pandemic has accelerated trends we were already
seeing, and in order to capitalise on opportunities in a
fast-moving market, we're transitioning from a single capability
remote meetings business into a broader technology platform,
combining a suite of external and specialist communications
capabilities that complement foundational UC platforms, such as
Microsoft Teams.
While remote meetings will no doubt continue to be a competitive
market, particularly beyond our core Professional Services sweet
spot, other communications segments are opening up and accelerating
even faster. The cloud telephony market is forecast to become a $26
billion market by 2024, and we're incredibly excited and encouraged
by the commercial traction we've generated in just seven months
since bringing this differentiated capability onto our core global
platform. While 2021 will inevitably be a transitional year as we
commercialise a broader technology platform, we have a strong
balance sheet and are confident in our ability to manage the
transition and provide the platform for strong, profitable
growth."
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 / Emma Hall / Jamille Smith / Shamma
Kelly
About LoopUp Group plc
LoopUp (LSE AIM: LOOP) is a cloud communications platform for
external and specialist communications. The platform combines
internationally-differentiated cloud telephony, business-critical
external remote meetings, and premium managed events and webcasts.
Our customers benefit from a global, fully-managed service, and an
emphasis on security, reliability and simplicity, delivered with
deep domain expertise and caring customer support. We are proud to
be trusted providers to over 5,000 organisations worldwide,
including more than 20 of the world's top-100 law firms. 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.
Chief Executive Officers' Business Review
Strong cash generation facilitating strategic transition to a
broader technology platform
FY2020 was a strong trading year for the Group, albeit
characterised by a material spike in business volumes at the onset
of the COVID-19 pandemic. Group revenue increased 18% to GBP50.2
million (FY2019: GBP42.5 million), EBITDA increased 239% to GBP15.3
million (FY2019: GBP6.4 million), and diluted EPS increased 760% to
15.2 pence (FY2019: 2.0 pence). The Group ended the year with a
materially stronger gross cash position of GBP12.1 million (FY2019:
GBP3.0 million) and improved net debt position of GBP0.7 million
(FY2019: GBP11.5 million).
The COVID-19 pandemic has had a material and almost certainly
irreversible impact on the broader market for external
communications. The spotlight is on a changing set of effective and
secure communications tools that work equally well in offices, at
home, on the road, and in hybrid settings.
In line with this fast-moving market backdrop, the Group has
swiftly and proactively reassessed its own product and market
strategy given the following considerations:
-- While Meetings trading remains robust in our core
Professional Services ("PS") target market, conditions have become
increasingly more challenging and competitive in non-PS sectors,
which now account for just 12% of total Group revenue;
-- The market spotlight is squarely on the cloud telephony
market, which facilitates greater remote and hybrid working
flexible compared with legacy on premise systems. This $15.8
billion market is set to grow rapidly to $26 billion by 2024(1) .
LoopUp's existing cloud telephony business, our deep expertise in
Microsoft voice technology, and our differentiated voice
architecture, create a competitively-advanced foundation to enter
the market as a differentiated add-on capability to Microsoft
Teams;
-- The Group believes the enterprise communications market is
set to migrate to a set of more specialist, use-case-specific
communications tools, which complement foundational UC suite
capabilities and integrate tighter with established business
workflows and processes.
1 Source: Wainhouse Research, 2020
As such, the Group is very excited to have expanded its
strategic scope from a single capability remote meetings business
into a broader cloud platform for external and specialist
communications.
Launch of Cloud Telephony as a core LoopUp Platform Capability
("LPC")
In July 2020, we launched our internationally-differentiated
Cloud Telephony capability, marking the first material step in our
expanded strategic scope. This capability essentially gives
customers the ability to make and receive external phone calls via
Microsoft Teams.
The Group has a strong heritage in Microsoft voice technology,
inherited from its acquisition of MeetingZone in 2018. With
expertise that stretches back to Microsoft OCS and Lync, their most
recent implementation was a multi-tenanted cloud telephony offering
for both Microsoft Skype for Business and Teams, with revenue of
GBP2.7 million in FY2020. Our July 2020 launch marked the migration
of this capability onto LoopUp's core global technology platform
and our group-wide commercial focus to promote it as a primary LPC
alongside Meetings and Managed Events.
Cloud telephony for Microsoft Teams brings compelling customer
benefits:
-- A unified calling experience for end users, rather than using
Teams for internal calls and a separate legacy system for external
calls;
-- For home and hybrid working - and for travelling when it
returns to business life - end users can use their Teams app on any
internet-connected device to make and receive calls; essentially
their work direct dial business number travels with them;
-- Enterprise IT departments can eliminate the cost and
complexity of disparate legacy PBXs (on premise telephony switches)
and work to a consistent set of standards and processes,
globally.
LoopUp's Cloud Telephony value proposition is particularly
differentiated for relatively international, managed
implementations in larger enterprises, who can achieve single
global supply driven by our:
-- Market-leading coverage as a fully-licensed and regulated
telecommunications service provider, where phone number ranges are
offered for compliant domestic service, including requirements such
as emergency services access and domestic CLI (Caller Line
Identification or caller ID) pass-through;
-- Premium PSTN voice network, built for the particularly
stringent demands of the professional services conference calling
market. Our voice network amalgamates 16 carefully selected tier-1
carriers, with whom we interconnect at our six primary global data
centres, all of which are interconnected over our resilient private
global IP backbone. The quality of all carrier call routings are
regularly and proactively assessed with objective 'PESQ scoring',
and we leverage their relative strengths on a 'highest quality
routing' basis. As an international organisation, why buy cloud
telephony from a single carrier when, with LoopUp, you can leverage
that carrier where it is strongest but 15 others in geographies
where they are stronger;
-- Delivery of the capability as a premium, fully-managed
service, on an end-to-end basis from initial consultation, through
proof-of-concept and detailed design, to international rollout
project management and ongoing service delivery. Our deep Microsoft
voice and 'modern workplace' expertise, responsive global account
management and support, unified customer administration tools, and
support of local deployments in difficult regulatory jurisdictions,
all combine to facilitate a single global implementation to
consistent configurations, processes and standards;
-- Complementary capabilities - not just other LoopUp Meetings
and Managed Events, but also third party integration for compliant
recording and contact centre functionality;
-- Unique pricing structure - the LoopUp PerfectBundle(TM) -
which enables international organisations to optimise spend and
eliminate wasted spend across their global billing entities.
Strong commercial momentum in Cloud Telephony
Commercial traction of our new Cloud Telephony capability has
progressed at a rapid pace since July 2020, above and beyond the
Group's pre-existing cloud telephony business (GBP2.7 million in
FY2020).
Our pipeline of live opportunities has grown from a potential
Total Contract Value ("TCV")(1) of GBP50 million at the time of our
September 2020 interims statement, to GBP84 million at our November
2020 trading update, and now to approximately GBP106 million. This
TCV assumes an average minimum contract term of two years, which we
consider to be highly conservative given nearly all later stage
discussions are for terms of at least three years. The pipeline
currently comprises 454 live opportunities at an average of
approximately GBP10,000 of monthly recurring subscription revenue
potential.
In the later stages of this pipeline, we now have 6 live Proofs
of Concept ("POC") with customers whose intent is to move ahead
with LoopUp but first wish to test the capability in their own
environment. A POC period is typically 1-3 months. The potential
TCV of these live POCs is approximately GBP5 million.
Most notably of all, however, we have achieved three new Cloud
Telephony contract wins since the start of FY2021. They comprise an
architectural engineering company, a renewables energy company, and
a marketing and communications company, and have a minimum TCV in
excess of approximately GBP620,000. We have also received
notification of a further RFP win although this is yet to be
formally contracted.
The Group is also making swift progress in its strategic
initiative to maximise its international regulatory compliance
coverage, a key aspect of differentiation to our international
enterprise target market. We are comfortably ahead of our stated
target to be a fully-licensed telecommunications service provider
in at least 60 country jurisdictions by the end of 2021.
Related to this international regulatory initiative, the Group
is also party to a growing number of exciting discussions with
potential indirect strategic distribution partners. Microsoft has
many global distribution partners, and while very few aspects of
Microsoft's portfolio are broadly regulated, cloud telephony is. In
nearly all country jurisdictions, suppliers to the end customer
market have to be licensed and regulated. Many major global
Microsoft partners have end customers that are considering moving
to Teams cloud telephony, but few are licensed telecommunications
service providers, at least on the multinational level of their end
customers. For this and other reasons - our voice network,
expertise
and managed service platform - LoopUp is very well positioned to
add value as a specialist partner, which could become a highly
scalable medium term growth path for the Group.
1 Conservatively assuming an average contract term of 2
years
Stark segmental performance contrast in Meetings
In its entirety, FY2020 was a strong trading year for the Group.
LPC revenue grew 25% to GBP43.0 million (FY2019: GBP34.4m), LPC
gross margin improved by one percentage point to 77.8% (FY2019:
76.8%), and LPC business volumes grew 41% growth to 1.00 billion
minutes (FY2019: 0.71 billion minutes). It was also a strong year
for new business acquisition. Our New Customer CAC Ratio - the
fully-loaded cost to acquire GBP1 of new ARR - improved to GBP0.84,
from GBP1.38 in FY2019 and in comparison to the 2020 SaaS benchmark
of GBP1.63(1) .
However, as announced in our 27 November 2020 trading update,
while trading spiked broadly at the onset of the pandemic, we
subsequently experienced a gradual decline and a stark divergence
in performance between our core Professional Services ("PS")
sectors and non-core, non-PS sectors:
-- Gross revenue retention level was 86% in PS (in line with
2020 SaaS benchmark: 86%), but materially lower at 67% in
non-PS;
-- Q4 2020 average revenue per day increased by 1% versus
pre-pandemic levels in PS, but reduced by 31% reduction in
non-PS.
1 KBCM Technology Group (formerly Pacific Crest Securities) SaaS
survey
This performance gap highlights an acceleration of the trend
that the Group has spoken to over the last several results cycles:
that our Meetings capability is focused on business-critical,
external meetings and therefore performs materially better in PS
sectors, where the use case is dominated by client meetings, both
in terms of their volume and importance. By contrast outside of PS,
our Meetings capability is less differentiated and competition is
more intense. We note, however, that while we expect trading to
remain challenging for our Meetings capability outside of PS, that:
(i) this performance gap only applies to our Meetings Capability
(and not to Cloud Telephony or Managed Events); and (ii) that
revenue from non-PS, pay-as-you-go Meetings customers now represent
just 12% of total revenue.
Post spike trading has also been impacted by the material
migration from rolling monthly pay-as-you-go contracts to committed
term subscription and minimum spend contracts. Such committed
contracts accounted for 48% of LPC business by the end of the year,
compared with just 13% at the start of the year. While these
committed term contracts naturally come with more cost-effective
pricing for the customer, they benefit from a longer period of
locked-in revenue certainty.
The Group also continued to innovate and develop its Meetings
capability for its core PS target market, with development projects
including:
-- Augmenting video to facilitate 20 concurrent cameras;
-- Release of 'LoopUp Rooms', which leverages off-the-shelf
hardware to create high quality, plug-and-play video conferencing
suites;
-- Access to a promotional 'freemium' plan to enable end users
and decision-makers to try the capability on demand.
Business priorities
Looking ahead into FY2021, the Group is focused on the following
business priorities:
-- Pipeline development and conversion in Cloud Telephony
Continuing the rapid growth of live opportunities; developing
the weighting of live opportunities to more progressed stages in
the sales cycle; generating an increasing rate of successful
conversions into new customer wins; and reaching a state of
material predictable revenue growth at attractive unit customer
acquisition economics;
-- Highly scalable strategic distribution partnerships
Seeking to form strategic partnerships with major global
Microsoft partners who sell other related Microsoft technology but
are not licensed to sell cloud telephony, particularly on a
multi-jurisdictional basis consistent with their enterprise
customer bases;
-- Clear segmental focus on external Remote Meetings
Instilling even greater focus into our Remote Meetings marketing
and development roadmap as a targeted capability for
business-critical, external meetings, in line with our starkly
stronger performance in the Professional Services market;
-- Continued innovation in new technology capabilities
Exploring a range of potential platform capability enhancements
- both organic and inorganic - to advance our strategy as a leading
cloud platform for premium external and specialist
communications.
Outlook
Having expanded our strategic scope from a single capability
remote meetings business into a broader cloud platform for external
and specialist communications, FY2021 is inevitably set to be
something of a transitional year for the Group. While we have
formed a sizable and engaged pipeline of live commercial
opportunities, it will naturally take some time to nurture and
develop these opportunities through the pipeline sales cycles
stages for what is, after all, a highly visible, business-critical
and long-term purchasing decision.
Furthermore, we note the clear residual market uncertainties
relating to the COVID-19 pandemic and the associated instability
around overall macro conditions, business climate and working
practices that may impact our business to some extent.
However, these factors notwithstanding, the Group is confident
in its ability to meet market profitability expectations for
FY2021, albeit at a potentially lower level of top line revenue. We
have a strong balance sheet coming out of FY2020, an unprecedented
commercial pipeline for our newly-launched Cloud Telephony
capability in terms of both size and engagement levels, and many
exciting avenues to take our broader communications platform, both
organically and inorganically. We have a high quality, committed
and incentivised team, and are confident in our ability to manage
the transition and provide the platform for strong, profitable
growth.
Steve Flavell Michael Hughes
co-CEO co-CEO
Chief Financial Officer's Review
During FY2020, the Group benefitted from of a period of
materially-increased demand, which significantly strengthened our
balance sheet and provided a strong platform to invest in launching
our Cloud Telephony capability onto our core global platform.
Operating Results
Group revenue increased by 18% in FY2020 to GBP50.2 million.
This was as a result of a significant spike in demand for both our
Meetings and Managed Event capabilities during March and April
2020, after which demand gradually declined with starkly-divergent
performance between core Professional Services ("PS") sectors and
non-core, non-PS sectors, for the reasons outlined in the CEOs'
review.
Following the launch of our enhanced Cloud Telephony capability
during 2020, and the strategic shift to a broader cloud platform
for external and specialist communications, the Group has evolved
its segmental reporting analysis accordingly. Revenue from our
Cloud Telephony, Remote Meetings and Managed Events capabilities,
all delivered on LoopUp's global technology platform, will now be
categorised as LoopUp Platform Capabilities ("LPC"). The Group's
remaining revenue, from the resale of Cisco WebEx Meetings, will be
categorised as 'third party resale services'.
FY2020 revenue from LPC increased by 25% to GBP43.0 million
(FY2019: GBP34.4 million), and revenue from third party resale
services fell by 12% to GBP7.2 million (FY2019: GBP8.1
million).
The Group's overall gross profit increased by 26% to GBP35.6
million (FY2019: GBP28.2 million), and LPC gross profit increased
by 27% to GBP33.5 million (FY2019: GBP26.4 million). This
represents a gross margin of 77.8%, one percentage point higher
than FY2019, representing both: (i) improvements in telephony
rates, the main cost of sale; and (ii) the slight change in mix,
with more high margin Managed Event revenue. Overall gross margins
increased by 4.5 percentage points to 70.9%, reflecting the change
in mix, with relatively less third party resale revenue at
significantly lower gross margins.
The Group was able to deliver this additional revenue with a
lower cost base - administrative expenses fell 7.7% to GBP20.3
million (FY2019: GBP21.8 million). The majority of these savings
were in overheads, with the Group able to reduce expenditure on
premises (the majority of our offices are in flexible spaces rather
than long term leases), marketing (due to the suspension of trade
show activity), and travel.
Staff costs were broadly similar to FY2019. Total headcount fell
by approximately 20 during the year, largely due to a reduction in
more junior, commercial staff. However, this was offset by: (i) the
Group investing materially in specialist expertise for the Cloud
Telephony market; and (ii) an increase in staff bonuses as a result
of trading performance.
The Group reported no exceptionals in the year (FY2019:
GBP0.5m).
Amortisation costs increased to GBP4.6 million (FY2019: GBP3.8
million), and spend on development activities increased from GBP5.0
million in FY2019 to GBP6.9 million in FY2020, reflecting both the
increased investment in Cloud Telephony and increased bonuses, as
above.
The Group continues to receive a tax benefit from its
development activities, and expects to receive an R&D tax
credit of GBP1.4 million from HMRC for FY2020 (FY2019: GBP1.3
million), payable during FY2021. This credit was partly offset by
GBP0.7 million of tax charges payable in the Group's non-UK
subsidiaries.
Assets and Cash Flows
The Group generated operating cash flow after capital
expenditure of GBP11.4 million (FY2019: GBP0.1m) and, after debt
repayments, increased its cash balance by GBP9.1 million to GBP12.0
million. Resulting net debt has fallen to GBP0.7 million as at 31
December 2020 (FY2019: GBP11.4 million).
The Group did not take advantage of any Government furlough
scheme or international equivalent during FY2020 or since. However,
GBP1.0 million of VAT payments from H1 2020 were automatically
deferred and are payable in H1 2021.
Even after the profitability of FY2020, the Group still has
accumulated trading tax losses of GBP8.5 million and non-trade
losses of GBP1.5 million available for offset against future UK
profits. These losses, alongside the significant additional relief
available for our ongoing development spend, will continue to
benefit the Group's tax charge in FY2021 and beyond.
Due to the reduction in revenues later in FY2020 and the
continued uncertainties relating to the COVID pandemic, the Group's
management and Board have carefully reviewed both near and mid-term
forecasts and are comfortable with the Group's going concern
status.
While the reduction in revenue is also considered an indicator
of potential impairment in relation to the Group's intangible
assets balances, following detailed modelling of future cash
generation, the Board is comfortable that there is no requirement
to impair these assets as at 31 December 2020. However, recent
increases in churn, particularly in non-PS Meetings customers,
indicates that the useful economic life of the Customer
Relationships asset acquired with MeetingZone may be lower than the
15 years originally estimated for accounting purposes, and as such,
the Group proposes to accelerate the acquired amortisation charge
for this asset from FY2021.
Simon Healey
CFO
Unaudited Consolidated Statement of Comprehensive income
For the year ended 31 December
2020
2020 2019
Note GBP000 GBP000
Revenue 50,230 42,541
Cost of sales (14,632) (14,304)
--------- ---------
Gross profit 2 35,598 28,237
Adjusted administrative expenses(i) (20,270) (21,825)
--------- ---------
Adjusted EBITDA (ii) 15,328 6,412
Depreciation (1,698) (1,475)
Amortisation of development costs (4,581) (3,777)
Adjusted operating profit (iii) 9,049 1,160
Exceptional reorganisation costs - (509)
Amortisation of acquired intangibles (2,210) (2,210)
Share-based payments charges (575) (588)
Operating profit / (loss) 6,264 (2,147)
Finance costs (568) (647)
--------- ---------
Profit / (loss) before income
tax 5,696 (2,794)
Income tax 826 789
--------- ---------
Profit / (loss) for the year 6,522 (2,005)
--------- ---------
Currency translation gain / (loss) (140) (397)
--------- ---------
Total comprehensive income /
(loss) for the year attributable
to the equity holders of the
parent 6,382 (2,402)
========= =========
Earnings / (loss) per share (pence): 3
Basic 11.8 (3.6)
Diluted 10.8 (3.6)
========= =========
(i) Total administrative expenses excluding depreciation,
amortisation of development costs and acquired intangibles,
non-recurring transaction costs, exceptional reorganisation costs
and share-based payments charges.
(ii) Adjusted EBITDA is operating profit stated before
depreciation, amortisation of development costs and acquired
intangibles, non-recurring transaction costs, exceptional
reorganisation costs and share-based payments charges.
(iii) Before amortisation of other intangible assets,
non-recurring transaction costs, exceptional reorganisation costs
and share-based payments charges.
Unaudited Consolidated Statement of Financial Position
As at 31 December 2020
2020 2019
GBP000 GBP000
Restated
Assets:
Property, plant and equipment 2,663 2,737
Right of use assets 2,347 3,228
Development costs 11,389 9,104
Goodwill and other intangibles 58,957 61,167
Total non-current assets 75,356 76,236
--------- ---------
Trade and other receivables 6,744 8,652
Cash and cash equivalents 12,086 3,000
Current tax 1,647 1,631
Total current assets 20,477 13,283
--------- ---------
Total assets 95,833 89,519
--------- ---------
Liabilities:
Trade and other payables (6,363) (5,415)
Accruals and deferred income (3,605) (2,578)
Lease liabilities (747) (862)
Borrowings (1,700) (1,700)
Total current liabilities (12,416) (10,555)
--------- ---------
Net current assets 8,061 2,728
Non-current liabilities:
Borrowings (11,050) (12,750)
Lease liabilities (1,600) (2,366)
Deferred tax (5,581) (5,709)
--------- ---------
Total non-current liabilities (18,231) (20,825)
--------- ---------
Total liabilities (30,647) (31,380)
Net assets 65,186 58,139
========= =========
Equity
Share capital 277 276
Share premium 60,677 60,588
Other reserve 12,691 12,691
Foreign currency translation
reserve (2,472) (2,332)
Retained loss (5,987) (13,084)
--------- ---------
Shareholders' funds attributable
to equity owners of parent 65,186 58,139
========= =========
Unaudited Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
Share Share Other Foreign Retained Shareholders
capital premium reserve currency profit funds/
translation / (loss) (deficit)
reserve attributable
to equity
owners
of parent
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
As at 1 January
2019 276 60,504 12,691 (1,935) (11,667) 59,869
--------- --------- --------- ------------- ---------- --------------
Loss for the year - - - - (2,005) (2,005)
Other comprehensive
income - - - (397) - (397)
Total comprehensive
profit / (loss)
for the year - - - (397) (2,005) (2,402)
--------- --------- --------- ------------- ----------
Transactions with
owners of parent
in their capacity
as owners:
Equity share-based
payment compensation - - - - 588 588
Share issues - 84 - - - 84
--------- --------- --------- ------------- ---------- --------------
As at 31 December
2019 276 60,588 12,691 (2,332) (13,084) 58,139
--------- --------- --------- ------------- ---------- --------------
As at 1 January
2020 276 60,588 12,691 (2,332) (13,084) 58,139
--------- --------- --------- ------------- ---------- --------------
Profit for the year - - - - 6,522 6,522
Other comprehensive
income - - - (140) - (140)
Total comprehensive
profit for the year - - - (140) 6,522 6,382
--------- --------- --------- ------------- ---------- --------------
Transactions with
owners of parent
in their capacity
as owners:
Equity share-based
payment compensation - - - - 575 575
Share issues 1 89 - - - 90
As at 31 December
2020 277 60,677 12,691 (2,472) (5,987) 65,186
--------- --------- --------- ------------- ---------- --------------
Unaudited Consolidated Statement of Cash Flows
For the year ended 31 December 2020
2020 2019
GBP000 GBP000
Net cash flows from operating activities
Profit / (loss) before income tax 5,696 (2,794)
Non-cash adjustments
Depreciation and amortisation 7,609 6,671
Impairment of intangible fixed - -
assets
Share-based payments charges 575 588
Interest payable 568 647
Working capital adjustments
(Increase) / decrease in trade
and other receivables 1,997 80
Increase / (decrease) in trade
and other payables 1,370 737
Tax received 1,200 401
Net cash generated by operations 19,015 6,330
-------- --------
Cash flows from investing activities
Purchase of property, plant and
equipment (745) (1,257)
Addition of intangible assets (6,866) (5,001)
Net cash used in investing activities (7,611) (6,218)
-------- --------
Cash flows from financing activities
Proceeds from share issue net of
issue costs 90 84
Repayment of loans (1,700) (1,700)
Interest and finance fees paid (568) (647)
Net cash generated from financing
activities (2,178) (2,263)
-------- --------
Net increase / (decrease) in cash
and equivalents 9,226 (2,191)
Cash and cash equivalents brought
forward 3,000 5,581
Effect of foreign exchange rate
changes (140) (390)
-------- --------
Cash and cash equivalents carried
forward 12,086 3,000
======== ========
Notes to the Financial Statements
1. Background and basis of preparation
The principal activity of the Group is a premium cloud
communications solution for business-critical external
communications.
LoopUp Group plc ('the Group') is a limited liability 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.
The unaudited summary financial information set out in this
announcement does not constitute the Group's consolidated statutory
accounts for the years ended 31 December 2020 or 31 December 2019.
The results for the year ended 31 December 2020 are unaudited. The
statutory accounts for the year ended 31 December 2020 will be
finalised on the basis of the financial information presented by
the Directors in this preliminary announcement and will be
delivered to the Registrar of Companies in due course. The
statutory accounts are subject to completion of the audit and may
change should a significant adjusting event occur before the
approval of the Annual Report.
The statutory accounts for the Group for the year ended 31
December 2019 have been reported on by the Group's auditors and
delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified and did not include references to
any matter which the auditors drew attention by way of emphasis
without qualifying their report and did not contain statements
under section 498(2) or (3) of the Companies Act 2006.
The unaudited summary financial information set out in this
announcement have been prepared using the accounting policies as
described in the December 2019 audited year end statutory accounts
and have been consistently applied.
The preliminary announcement for the year ended 31 December 2020
was approved by the Board for release on 30 March 2021.
Prior year restatement
During the year, the Group identified that certain assets and
liabilities acquired as part of the acquisition of MeetingZone in
2018 had been misstated in the acquisition balance sheet. Accrued
income assets had been overstated by GBP669,000 and deferred
revenue liabilities had been overstated by GBP108,000. The net
impact of these adjustments is to increase the goodwill asset
relating to the acquisition by GBP561,000. The Group's 2019 balance
sheet has been restated in this announcement to reflect these
adjustments. There is no impact on income statement in either
year.
2. Revenue and segmental reporting
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 chief operating
decision-maker (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. This
capability will be marketed to customers alongside the existing
premium remote meetings solution as part of a combined, core,
LoopUp proposition. This new combined segment has been termed
LoopUp Platform Capabilities below. Existing revenue from the voice
proposition, which was previously categorised as part of the 'third
party and other services' segment, has been added to this segment
in the comparative information below. The remaining revenue
previously categorised as 'third party and other services' revenue
has now been categorised as 'third party resale services'.
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 all periods.
No segmental balance sheet was presented to the CODM.
The Group's revenue disaggregated by primary geographical
markets is as follows:
LoopUp Platform Third party
GBP'000 Capabilities resale services Total
---------------------------------- ---------------- ----------------- -------
For the 12 months to 31 December
2020:
UK 22,634 2,957 25,591
Other EU 6,217 1,573 7,790
North America 13,258 2,651 15,909
Rest of world 940 - 940
---------------------------------- ---------------- ----------------- -------
43,049 7,181 50,230
---------------------------------- ---------------- ----------------- -------
For the 12 months to 31 December
2019:
UK 19,007 3,537 22,544
Other EU 4,046 1,728 5,774
North America 10,800 2,853 13,653
Rest of world 570 - 570
---------------------------------- ---------------- ----------------- -------
34,423 8,118 42,541
---------------------------------- ---------------- ----------------- -------
The Group's revenue disaggregated by pattern of revenue
recognition is as follows:
LoopUp Platform Third party
GBP'000 Capabilities resale services Total
---------------------------------- ---------------- ----------------- -------
For the 12 months to 31 December
2020:
Services transferred at a point
in time 40,774 599 41,373
Services transferred over time 2,275 6,582 8,857
---------------------------------- ---------------- ----------------- -------
43,049 7,181 50,230
---------------------------------- ---------------- ----------------- -------
For the 12 months to 31 December
2019:
Services transferred at a point
in time 32,269 554 32,823
Services transferred over time 2,154 7,564 9,718
---------------------------------- ---------------- ----------------- -------
34,423 8,118 42,541
---------------------------------- ---------------- ----------------- -------
The Group's gross profit disaggregated by segment is as
follows:
12 months 12 months
to 31 December to 31 December
GBP'000 2020 2019
------------------------------ ---------------- ----------------
LoopUp Platform Capabilities 33,497 26,449
Third party resale services 2,101 1,778
------------------------------- ---------------- ----------------
35,598 28,237
------------------------------ ---------------- ----------------
The Group's non-current assets disaggregated by primary
geographical markets are as follows:
12 months
12 months to 31 December
to 31 December 2019
GBP'000 2020 restated
--------------- ---------------- ----------------
UK 74,230 74,753
Other EU 24 62
North America 1,097 1,410
Rest of world 5 11
---------------- ---------------- ----------------
75,356 76,236
--------------- ---------------- ----------------
3. 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.
12 months 12 months
to to
31 December 31 December
2020 2019
------------------------------------- ------------- -------------
Profit / (loss) attributable
to equity holders (GBP000) 6,522 (2,005)
Adjusted profit attributable
to equity holders (GBP000) (1) 9,307 1,302
Weighted average number of ordinary
shares in issue (000) 55,330 55,208
Basic earnings per share (pence):
* Basic adjusted (1) 16.8 2.4
- Basic 11.8 (3.6)
The diluted earnings per share has been calculated by dividing
the above profit numbers by the weighted average number of shares
in issue during the year, adjusted for potentially dilutive shares
that are not anti-dilutive.
12 months 12 months
to to
31 December 31 December
2020 2019
-------------------------------------- ------------- -------------
Weighted average number of ordinary
shares in issue ('000) 55,330 55,208
Adjustments for share options
('000) 5,065 5,058
--------------------------------------- ------------- -------------
Weighted average number of potential
ordinary shares in issue ('000) 60,395 60,266
--------------------------------------- ------------- -------------
Diluted earnings per share (pence):
* Diluted adjusted (1) 15.4 2.2
- Diluted 10.8 (3.6)
======================================= ============= =============
(1) Calculated using profit attributed to equity holders
adjusted for exceptional reorganisation costs, amortisation of
acquired intangibles and share based payment charges.
4. Dividends
The Directors do not recommend the payment of a dividend (2019:
GBPnil) .
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END
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