Toople plc (LON:TOOP), a provider of bespoke telecom services to UK SMEs, today announced interim results for the six months ended 31 March 2020.
Commenting on the results, Richard Horsman, Non-Executive Chairman, said:
“Our business is functioning well and the key operational and financial milestones that we outlined at the time of the acquisition of DMSL have been achieved. We are well placed to take advantage of the financial and operational synergies afforded by the acquisition of DMSL and our growth drivers, which will only increase in relevance as the UK economy emerges from the COVID-19 crisis. Whether the lockdown eases swiftly, or becomes stricter, Toople is the solution to stay connected.”
Financial and Operational Highlights:
· Successful placing to raise gross proceeds of £1.2 million to fund the transformational acquisition of DMS Holding 2017 Limited (“DMSL”), completed on 19 February 2020
o Reported period contains only six weeks of ownership of DMSL
o DMSL has a history of being cash generative, which should considerably accelerate timeline to achieve profitability and positive cash generation
· Group revenue grew year on year by 39% to £1.5 million for the six month period
o Broadband revenue grew by 70%
o Mobile revenue grew by 100%
· Gross profit increased by 61% to £334,839 (HY 2019: £207,494)
· Gross margin improved by 3 percentage points to 22%
· Cash at bank was over £1 million at period end
· New contract wins for reported for the Group
· Launch of a telecoms price comparison website and a service offering company credit reference checking and reports, complementing the Group’s IT and telecoms services
· Company on track to realise cost synergies of over £1 million per annum following acquisition
o £480,000 (annualised) already achieved to date, with a further £120,000 already in progress to be delivered; and a further £420,000 identified to be realised by end of financial year
Commenting on summary and outlook, Andy Hollingworth, CEO at Toople, added:
“Growth is being driven by a number of factors, not least a noticeable switch by UK SMEs to superfast fibre broadband, ahead of the phasing out of existing legacy copper infrastructure, due for completion by 2025. This trend is coupled with a seismic shift in UK working practices, whereby more workers are either electing or being asked to work from home, driving further reliance on home based telecoms, IT and broadband solutions.
“All our brand propositions are geared around offering choice for our customers. We provide them with the best bespoke solution for their individual needs. The investments we have made are driving top line growth with future returns in mind. That said, the financial and operating synergies already achieved are propelling us more quickly towards positive cash generation. Clearly the major caveat is the true impact of COVID-19 on the wider economy, but as it stands today, we believe it presents opportunities for our Group.”
