REG - LoopUp Group PLC - Trading update

LoopupAnnouncement

14/12/2022 07:00

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RNS Number : 6113J  LoopUp Group PLC  14 December 2022

14 December 2022

LOOPUP GROUP PLC

("LoopUp" or the "Group")

Trading update

 

LoopUp Group plc (AIM: LOOP), the cloud platform for premium hybrid
communications, is pleased to provide the following trading update.

 

Meetings: c.7,000 new enterprise customers

 

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 will pay PGi Connect a share of invoiced
and received revenue(1) from successfully transferred customers for a period
of three years.

 

During October 2022, c.7,000 out of c.8,100 former PGI Connect conferencing
services customers successfully transferred to service provision on LoopUp's
Meetings and Event platforms, and have subsequently been invoiced for their
October 2022 licences and usage. As a result, overall Group revenue run rate
for October 2022 has increased by more than 2.5 times from that in September
2022.

 

Cloud Telephony: acceleration in new customer and contract wins

In Q3 2020, the Group launched its Cloud Telephony solution, which has since
developed into its primary growth line of business. The Cloud Telephony market
is forecast to grow to £32 billion by 2025(2), and the Group's aspiration is
to become one of a small number of winners in the multinational mid-market and
enterprise segment, providing customers with single-vendor service provision
globally rather than the status quo of multiple telecommunications carriers in
specific countries and regions.

 

Since launch, the Group has now secured 76 customer wins, comprising 161
individual contracts, and has done so at an accelerating win rate:

 ·       at least 53% increase in customer wins with 46 during FYTD 2022 (FY 2021: 30)
 ·       at least 122% increase in individual contract wins with 111 during FYTD 2022
         (FY 2021: 50)

The greater acceleration in contract wins versus customer wins reflects the
'layering effect' from progressive geographic customer rollouts - i.e. 37% of
the contract wins in FYTD 2022 have been from customers won during FY 2021.

 

In aggregate, these 76 customer wins represent:

 ·       Minimum Annual Recurring Revenue (ARR) of £1.7 million and minimum Total
         Contract Value (TCV) of £5.8 million, based on minimum contracted levels;
 ·       Expected ARR of c.£2.8 million and expected TCV of c.£9.2 million, based on
         expected rollout levels, where LoopUp has relatively strong visibility of
         customer intent based on conversations, planning and pricing; and
 ·       Potential ARR of c.£6.0 million and potential TCV of c.£18.6 million, based
         on identified potential rollout levels but where LoopUp currently has less
         clear visibility of customer intent.

 

The Group has so far experienced zero customer churn in Cloud Telephony.
Operationally, all customer deployments to date have been successful, and all
rollouts are progressing positively.

 

 (1)  Approximately 13% on a weighted average basis
 (2)  Source: Gartner, 2022

Outlook

Following the successful transition of PGi Connect Meetings business and the
commercial progress achieved in Cloud Telephony, the Group now expects FY 2022
revenue to be marginally above market expectations at no less than £15.5
million (H1 2022: £6.6 million). FY 2022 EBITDA is expected to be marginally
below market expectations, due to higher PGi Connect transition execution
costs, but is not expected to impact FY 2023 profitability.

 

This rapid acceleration of revenue run rate leaves the Group in a materially
stronger position to accelerate its primary Cloud Telephony growth line of
business in 2023, where a sizable market opportunity exists for the Group's
differentiated multinational value proposition.

 

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.

 

For further information, please contact:

 LoopUp Group plc                                    via FTI
 Steve Flavell, co-CEO

 Panmure Gordon (UK) Limited                         +44 (0) 20 7886 2500
 Dominic Morley / Alina Vaskina (Corporate Finance)
 Erik Anderson (Corporate Broking)

 Cenkos Securities Limited                           +44 (0) 20 7397 8900
 Giles Balleny / Dan Hodkinson (Corporate Finance)
 Alex Pollen (Sales)

 FTI Consulting, LLP                                 +44 (0) 20 3727 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 telecommunications into
a single, consistently managed cloud implementation rather than disparate
implementations from multiple carriers. The Group's hybrid auditorium and
events solution, Hybridium (www.hybridium.com (http://www.hybridium.com) ),
brings unrivaled engagement and analytics to larger scale hybrid education,
training and events such as management onsites, departmental kick-offs,
capital markets days and thought leadership seminars.

 

The Group is listed on the AIM market of the London Stock Exchange (LOOP) and
is headquartered in London, with offices in the US, Spain, Germany, Hong Kong,
Barbados and Australia.

 

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