Toople PLC (LON:TOOP), a provider of bespoke telecom services to UK SMEs, today announced its final audited results for the year ended 30 September 2020.
Commenting on the results, Richard Horsman, Non-Executive Chairman, said:
“As we look back over the financial year, we can truly say that it was a transformative period for our Company. During the reported period we have acquired a highly complementary business, DMSL, raised funds to bolster our balance sheet, restructured into four distinct operating brands, further simplifying our business propositions for our customers and have more than delivered on financial and operational synergies promised at the time of the acquisition.”
Financial and Operational Highlights:
· Successful placing to raise gross proceeds of £1.2 million to fund the acquisition of DMS Holding 2017 Limited (“DMSL”), completed on 18 February 2020
· Reorganisation of business into four main trading brands
· Successful integration of DMSL, with annual cost synergies of over £1.6 million now being realised compared with initial guidance of £50,000 per month
· Group revenue grew year on year by 40% to £3.4 million with a seven months’ contribution from DMSL
· Gross profit increased by 130% to £1.1 million (FY 2019: £479k)
· Increase in overall gross margin from 20% to 32% – a significant improvement following acquisition of DMSL which delivered a gross margin of 44% for the period
· Improved performance in the Toople.com business achieved by reducing carrier costs and ceasing services to poor paying or bad debt customers
· Active cost control and management
· 23% reduction in marketing costs reflecting change in strategy, with more focus on DMSL business and recognizing COVID-19 impact
· Administrative expenses only increased by 8%, despite 40% increase in revenues
· New contract wins and contract extensions reported for the Group
· Launch of a telecoms price comparison website and a credit reference checking and report company, complementing the Group’s IT and telecoms services
· Cash at bank at 30th September 2020 was over £568,000
· Proactive approach to bad debts has resulted in a charge of £1.1m providing for legacy bad debt issues; the impacts of Covid-19; any potential adverse effects of Brexit; and reducing the group’s risk for out of term customers as a part of our strategy towards future risk created by the pandemic.
· New client onboarding measures in place including credit checking and digital document signature requirement
Commenting on summary and outlook, Andy Hollingworth, CEO at Toople, added:
“The news about a vaccine roll-out in the UK has given everyone a boost, but given the general economic uncertainty in the UK with the full economic impact of COVID 19 not yet fully clear; and the UK once again facing a national lockdown with further lockdown restrictions likely to continue well into 2021, we must remain vigilant on costs.
“That said, trading has progressed well in the first few months of FY20/21, with notable contract wins and contract extensions announced to the market. Additionally, we are beginning to see a number of acquisition opportunities which, with a strengthened balance sheet and the ability to offer listed shares as part of the consideration mix, we are well-placed to take advantage of.
“Overall we remain cautiously optimistic about the future prospects for Toople, particularly given HM Government’s commitment to the rolling out of fibre telecommunication infrastructure to replace copper and the necessary and ultimately unavoidable upgrade of the country’s network from 4G to 5G and the opportunities that will present the Group.”
