TIDMLOOP
RNS Number : 2401B
LoopUp Group PLC
30 September 2022
30 September 2022
LOOPUP GROUP PLC
("LoopUp" or the "Group")
Interim results for the period ended 30 June 2022
LoopUp Group plc (AIM: LOOP), the cloud platform for premium
hybrid communications, announces its unaudited interim results for
the six months ended 30 June 2022 ("H1-22").
Financial Highlights:
-- Revenue of GBP6.6 million (H1-21: GBP11.5 million) at
a gross margin of 67% (H1-21: 67%)
-- Adjusted EBITDA (1) loss of GBP1.5 million (H1-21: GBP1.2
million profit) and adjusted operating loss (2) of GBP5.1
million (H1-21: GBP2.4 million)
-- Gross cash of GBP0.7 million and net debt of GBP8.0 million
at 30 June 2022 (30 June 2021: GBP5.0 million and GBP6.9
million respectively)
Operating Highlights:
-- Continued execution on strategic transition from traditional
base of remote meetings services into a broader cloud
platform for hybrid communications
-- Cloud Telephony: material acceleration in commercial traction:
- 133% acceleration in customer wins: 35 in the twelve
months to Jun-22 versus 15 in the twelve months to Jun-21
- 224% acceleration in contract wins: 81 in the twelve
months to Jun-22 versus 25 in the twelve months to Jun-21
- Sales pipeline of new opportunities exceeded c.GBP100
million ARR at the end of the period
-- Hybridium: closed a landmark contract with Telefónica
for deployment at 'Universitas', its global innovation
and talent hub in Madrid
Post Period Highlights
-- Cloud Telephony: 10 additional Cloud Telephony customer
wins and 24 additional contract wins, leading to a total
of 60 customer wins and 130 contracts signed since service
launch in Q3 2020
-- Meetings: closed major contract with PGi expected to generate
c.GBP10 million of revenue and c.GBP5 million of net cash
contribution in the twelve months from October 2022 to
September 2023
-- Successful Capital Raising for approximately GBP3.5 million
in September 2022, subject to General Meeting scheduled
for 17 October 2022
-- Successful renegotiation of senior debt arrangements with
Bank of Ireland
Steve Flavell and Michael Hughes, co-CEO's of LoopUp,
commented:
"We continued to make progress during the half, as we
strategically transition our business and technology into a broader
cloud platform for hybrid communications.
Our primary growth line of business, Cloud Telephony, has seen
contract wins accelerate by 264% in the second year post service
launch, and the recent PGi Connect deal will materially boost our
legacy Meeting business, which we expect to return to growth in HY
2022 as a result.
Looking ahead, we are excited by the growth potential of Cloud
Telephony, and welcome the material cash boost from the PGi Connect
deal and the proposed Capital Raising, which will enable us to take
Cloud Telephony into its next phase of commercial
acceleration."
1 Adjusted EBITDA is operating profit/(loss) stated before
depreciation, amortisation of development costs and acquired
intangibles, exceptional reorganisation costs, exceptional
impairment charge and share-based payment charges.
2 Adjusted operating profit/(loss) is operating profit/(loss)
stated before amortisation of acquired intangibles, exceptional
reorganisation costs, exceptional impairment charge and
share-based payment charges.
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 7397
Cenkos Securities Limited 8900
Giles Balleny / Dan Hodkinson (Corporate Finance)
Alex Pollen (Sales)
+44 (0) 20 3727
FTI Consulting, LLP 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), 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.
Chief Executive Officers' Business Review
The Group has made strong continued progress during H1-22 with
the continued transition of our business, and expansion of our
technology, into a broader cloud platform for hybrid
communications.
In our legacy Meetings business, the recently announced deal
with PGi Connect gives this business unit a material boost that is
expected to return the business back to growth in H2-22 and FY2023.
While this business remains in underlying decline as enterprises
progressively embrace more holistic Unified Communications (UC)
platforms such as Microsoft Teams, this material book of business
from PGi Connect is expected to contribute approximately GBP10
million in revenue and GBP5 million in net cash to the Group over
the 12-month period from October 2022 to September 2023.
Meanwhile, the Group's primary growth line of business and
source of long-term shareholder value - Cloud Telephony - has
demonstrated material commercial acceleration in its second-year
post service launch. This is the result of the Group's compelling
commercial value proposition targeted at the multinational
mid-market and enterprise market, facilitating single vendor
telephony service provision globally, rather than supply from a
patchwork of multiple domestic/regional telecommunications
carriers. Contract wins accelerated by 264% in the second-year post
service launch, and specifically by 224% in the twelve months to
June 2022 versus the equivalent prior year period.
We are excited by the growth potential of Cloud Telephony, and
welcome the material expected cash boost from the PGi Connect deal,
together with the proposed Capital Raising as announced on 28
September (subject to shareholder approval), to take this primary
growth line of business for the Group through its next phase of
commercial acceleration.
Group business overview
The Group has three lines of business:
-- Meetings - legacy cash generative business
- Integrated audio, web and video remote meetings software
and service, focused on premium audio quality and
ease-of-use
- In underlying decline but materially boosted by the
major agreement with PGi Connect, as announced on
1 September 2022
-- Cloud Telephony - primary growth line of business
- Next generation telephony - 'PSTN replacement' - enabling
phone calls to and from work phone numbers independently
of the user's physical location and not tied to a
physical handset, and integrated with Unified Communications
platforms such as Microsoft Teams
- Targeting the multinational mid-market and enterprise
market segment of this large, growing market, forecast
to be a $29 billion market by 2025 (source: Gartner,
2022)
- Strong acceleration of commercial traction, with 130
contracts closed two years on from service launch
and demonstrating material acceleration in customer
and contract win-rate
-- Hybridium - secondary growth line of business
- Hybrid auditorium technology, enabling large scale
hybrid events (20-150 people in room and 20-150 people
remote), such as company town halls, management onsites
/ offsites, team kick-offs, Capital Markets days,
product launches, and corporate training
Meetings and PGi Connect deal
The Group's Remote Meetings business has been declining in the
post pandemic environment as enterprises progressively embrace more
holistic Unified Communications (UC) platforms, such as Microsoft
Teams, which incorporate meetings functionality.
However, on 1 September 2022, the Group announced that it had
entered into a major revenue sharing and customer transfer
agreement with PGi Connect, giving LoopUp the rights to transfer
materially all of PGi Connect's conferencing services customers
over to LoopUp. While no initial or fixed consideration is payable,
the Group will pay PGi Connect a share of revenue invoiced and
received from successfully transferred customers for a period of
three years.
On 2 September 2022, PGi Connect sent out the first (and
largest) batch of contract assignment notices to c.8,100 of its
direct enterprise customers, concerning the transition of services
to LoopUp from 1 October 2022. As at July 2022, these 8,100
customers had an annualised revenue run-rate of c.GBP34 million to
PGi Connect.
The Group has prior experience of large-scale customer
transitions onto its platform following the acquisition of
MeetingZone in 2018. The Group is not taking on any of PGi's
infrastructure, equipment, datacentres or vendor contracts, making
the transition clean and cost efficient. Nevertheless, from
customers' perspective, the transition will be seamless with
dial-in numbers, meetings access codes and active calling rates
remain unchanged in nearly all cases, and with standard PGi terms
and conditions remaining in place meaning no re-contracting.
While this is clearly a highly material level of assigned
business, and while more is expected to be taken on in due course
relating to PGi Connect's indirect business, the Group is making
prudent assumptions regarding transition loss for
non-term-committed customers as well as general ongoing business
attrition, and so expects the agreement to generate revenue of
approximately GBP10 million and net cash contribution to the Group
of approximately GBP5 million over the twelve-month period from
October 2022 to September 2023.
Cloud Telephony
In Q3 2020, the Group launched its Cloud Telephony solution,
which has since developed into its primary growth line of business
for long-term future value creation in the Group. The Cloud
Telephony market is forecast to grow to $29 billion by 2025, 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 secured 60 customer wins, comprising
130 individual contracts, and has done so at an accelerating win
rate:
-- 133% increase in customer wins, with 42 won during the
second year post service launch ending August 2022 (18
during the first year post service launch ending August
2021); and
-- 264% increase in individual contract wins, with 102 won
during the second year post service launch ending August
2022 (28 during the first year post service launch ending
August 2021). The greater acceleration in contract wins
versus customer wins reflects the 'layering effect' from
progressive geographic customer rollouts - i.e. approximately
one third of the contract wins in the second year post
launch were from customers won in the first year post
launch.
In aggregate, these 60 customer wins represent:
-- Minimum Annual Recurring Revenue (ARR) of GBP1.2 million
and minimum Total Contract Value (TCV) of GBP4.4 million,
based on minimum contracted levels;
-- Expected ARR of c.GBP2.4 million and expected TCV of c.GBP7.9
million, where LoopUp has relatively strong visibility
of customer intent for the next stage of rollouts based
on conversations, planning and pricing; and
-- Potential ARR of c.GBP5.3 million and potential TCV of
c.GBP16.5 million, based on identified potential rollout
levels but where LoopUp currently has less clear visibility
of customer intent.
Operationally, all customer deployments to date have been
successful, and all rollouts are progressing positively. One
customer win case study is a leading global communications
consulting firm with c.7,000 employees across 30 countries. The
Group has successfully rolled out now to 18 of these countries with
minimum committed ARR of c.GBP260K, bringing the customer's number
of telephony vendors down from 20 to 1 in those countries. The
remaining 12 countries are scheduled to be rolled out by March
2023. Other customer wins include a US-headquartered Fortune 100
technology company, a Germany-headquartered global industrial
group, an Asia-Pacific-headquartered global food group, and a
French-headquartered global logistics company.
In addition to these 60 customer wins, the Group's sales
pipeline of potential new Cloud Telephony opportunities continues
to grow and now stands at more than GBP100 million of additional
potential ARR, of which approximately 15% is at written proposal
stage or later. The pipeline includes:
-- Proofs of Concept (PoC)
- Sometimes PoCs are needed in order to win a customer,
whereby the potential customer can pilot the technology
and confirm that it works in their IT environment
- LoopUp's track record of completed PoCs is a 94% conversion
rate into successful customer wins
- In its current pipeline, the Group has 11 live PoC
projects and 16 further requests for proposal, so
27 PoC opportunities in total, including with a top-5
global law firm, a Big-4 accounting firm, a major
global sportswear company, and a leading holidays
group
-- Strong opportunities
- Separately to the above PoC opportunities, the Group
has 41 contract opportunities in its pipeline that
it expects to close by the end of 2022, which are
expected to represent minimum contracted ARR of c.GBP630K
- 17 of these 41 new contract opportunities are with
the Group's 60 existing customers (i.e. continued
geographic rollouts), and 24 are with new customers
that the Group expects to win in this period
The Group is achieving this strong and accelerating commercial
traction in Cloud Telephony due to its differentiated offer for
multinational mid-market and enterprise customers versus
competition from telecommunications carriers and UC platform
calling plans. Specifically, this includes the Group's:
-- Highest quality routing voice network, built over 16 years
for international legal conference calls;
-- Underlying relationships with 19 Tier-1 carrier partners,
facilitating full domestic PSTN replacement including
number porting, domestic CLI pass-through and emergency
services calling;
-- Licensed / regulatory-compliant geographic coverage, expected
to span c.80 countries by early 2023 (including China
and India);
-- Customer connectivity options - UC-integrated / SIP /
hybrid - for future-proofed customer decision-making at
varied stages of the Cloud Telephony technology journey;
-- Global Management Portal software layer, for consistent
service visibility and administration, globally;
-- Span of expertise encompassing Unified Communications
(including Microsoft's 'Advanced Specialization' - the
competency level above gold partnership status - in Teams
telephony), VoIP/SIP, telecommunications and software;
and
-- PerfectBundle pricing for spend commitment pooling across
a multinational customer's global billing entities.
Hybridium
Following the acquisition of SyncRTC Inc. in October 2021 (
www.hybridium.com ), rebranded Hybridium combines video wall,
hologram and virtual live stage technology, bringing unrivalled
engagement and analytics to larger scale hybrid education,
corporate training and events such as management onsites,
departmental kick-offs, capital markets days and thought leadership
seminars. Events with Hybridium benefit from ultra-low latency at
ultra-high resolution, with full video wall layout flexibility
facilitating any content on any screen.
In April 2022, Hybridium signed a deal with Telefónica for the
deploying of its solution at 'Universitas', Telefónica's global
innovation and talent hub located at its Madrid headquarters in
Distrito Telefónica. While the Group wishes to sell Hybridium to
more large enterprises, such as Telefónica, and while building
pipeline for such opportunities is very achievable in the post
pandemic hybrid working environment, the purchase ticket price is
material (with the associated hardware), and many enterprises are
still in the phase of assessing and formulating their future
working policies rather than making major investments.
As such, the Group's primary planned route to market for this
technology in the near term will be via renting a LoopUp-owned and
managed facility, which will be at a much lower ticket price of
approximately GBP15,000 per half day rental. The Group has
identified a primary location in the City of London and is at heads
of terms for a lease. The Group believes this route to market has
the potential for fast investment payback and the potential to
replicate in other major urban centres, as well as being an
effective shop window and experiential facility for further
enterprise sales such as Telefónica.
For context, planned forward-looking investment in Hybridium is
materially less than that in Cloud Telephony at approximately one
tenth of the investment.
Capital Raising
As announced on 28 and 29 September 2022, subject to shareholder
approval at General Meeting to be held on October 17 2022, the
Group has successfully closed a Capital Raising for approximately
GBP3.5 million, by way of an institutional placing and direct
subscriptions with the Company, at an issue price of GBP0.05.
Additionally, Turner Pope Investments Limited ("TPI") is
currently conducting a broker offer (the "Broker Offer") allowing
additional subscriptions from investors who did not participate in
the Capital Raising for new Ordinary Shares through TPI at the same
GBP0.05 Issue Price with a value expected to be around GBP1.0
million (and which may be increased by agreement between the
Company and TPI in the case of sufficient demand), with priority
being given to existing shareholders.
The Capital Raising, the proceeds of the Broker Offer and the
expected cash generation from the PGi Connect agreement, will:
-- support the next phase of investment in Cloud Telephony (primary) and Hybridium (secondary);
-- support the transfer of Meetings customers from PGi Connect;
-- provide near term working capital for the Group; and
-- strengthen the Group's balance sheet going forward.
Restructuring of existing debt arrangements
In 2018, the Group entered into a term loan with Bank of Ireland
for GBP17.0 million, which has since reduced to a current balance
of GBP6.9 million, and a revolving credit facility. On the basis of
the Group's deal with PGi Connect and this proposed Capital Raising
, the Group and Bank of Ireland have agreed the following changes
to the term loan arrangements:
-- A new set of covenants will apply, reflecting the improved
outlook of the Group based on a minimum liquidity level,
EBITDA performance and Cloud Telephony revenue;
-- 50% of the Capital Raising above the minimum GBP2.7 million
net proceeds level (i.e. GBP3 million gross proceeds less
fees of approximately GBP0.3 million) will be applied
to previously-agreed principal repayment holidays through
to June 2023, as announced in the Group's preliminary
results on 7 June 2022;
-- The interest rate of 4.5 percent above the Sterling Overnight
Index Average (SONIA) will continue to apply;
-- Breaches by the Company over the past two months of previous
(now renegotiated) financial covenants or information
provision requirements are waived; and
-- The additional revolving credit facility for GBP1.5 million,
which the Group has drawn on over recent months, will
be repaid in full and cancelled.
Outlook
The PGi Connect deal, together with the proposed Capital
Raising, gives the Group the cash boost it needs to take its
primary Cloud Telephony business through the next phase of growth.
The Group's solution is materially differentiated for the
multinational segment in the large, growing Cloud Telephony market,
and the Group is now building upon clearly accelerating commercial
traction and success.
Steve Flavell Michael Hughes
co-CEO co-CEO
Unaudited consolidated statement of comprehensive income for the
six months to 30 June 2022
Six months Six months
to to Year to
30 June 30 June 31 December
GBP'000 2022 2021 2021
--------------------------------------- ----------- ----------- -------------
Revenue 6,632 11,500 19,526
Cost of sales (2,211) (3,793) (6,058)
---------------------------------------- ----------- ----------- -------------
Gross profit 4,421 7,707 13,468
Adjusted operating expenses
(1) (5,967) (6,515) (12,272)
---------------------------------------- ----------- ----------- -------------
Adjusted EBITDA (2) (1,546) 1,192 1,196
Depreciation (806) (845) (1,760)
Amortisation of development
costs (2,722) (2,769) (5,582)
Adjusted operating profit
/ (loss)(3) (5,074) (2,422) (6,146)
Exceptional reorganisation
costs (259) (407) (392)
Exceptional impairment charge - - (19,597)
Amortisation of acquired intangibles (925) (1,105) (2,211)
Share-based payment charges (602) (300) (2,208)
---------------------------------------- ----------- ----------- -------------
Total administrative expenses (11,281) (11,941) (44,022)
---------------------------------------- ----------- ----------- -------------
Operating profit / (loss) (6,860) (4,234) (30,554)
Finance costs (212) (204) (465)
Profit / (loss) before income
tax (7,072) (4,438) (31,019)
Income tax (121) (83) 6,052
Profit / (loss) for the period (7,193) (4,521) (24,967)
Other comprehensive income
and loss
Currency translation gain
/ (loss) 27 (190) (340)
Total comprehensive income
/ (loss) for the period attributable
to the equity holders of the
parent (7,166) (4,711) (25,307)
======================================== =========== =========== =============
Earnings / (loss) per share
(pence) - Note 4
* Basic and diluted adjusted (4) (5.4) (4.9) (7.7)
* Basic and diluted (7.1) (8.2) (39.0)
======================================== =========== =========== =============
(1.) Total administrative expenses excluding depreciation,
amortisation of development costs and acquired intangibles,
exceptional reorganisation costs, exceptional impairment
charge and share-based payment charges.
(2.) Adjusted EBITDA is operating profit/(loss) stated before
depreciation, amortisation of development costs and acquired
intangibles, exceptional reorganisation costs, exceptional
impairment charge and share-based payment charges.
(3.) Adjusted operating profit/(loss) is operating profit/(loss)
stated before amortisation of acquired intangibles, exceptional
reorganisation costs, exceptional impairment charge and
share-based payment charges.
(4.) Basic adjusted and diluted adjusted earnings per share
are calculated using profit/(loss) attributable to equity
holders adjusted for exceptional reorganisation costs,
exceptional impairment charges, amortisation of acquired
intangibles and share based payment charges.
Unaudited consolidated statement of financial position at 30
June 2022
30 June
2021
30 June 31 December
GBP'000 2022 (Restated) 2021
---------------------------------- --- --------- ------------ ------------
Assets
Non-current assets
Property, plant and equipment 1,985 2,504 2,368
Right of use assets 1,717 2,452 2,130
Intangible assets:
* Development costs 12,384 11,577 12,726
* Other intangible assets 5,397 26,341 5,638
* Goodwill 35,425 31,511 35,425
Total non-current assets 56,908 74,385 58,287
--------------------------------------- --------- ------------ ------------
Current assets
Trade and other receivables 3,632 4,331 3,608
Cash and cash equivalents 662 5,019 5,465
Current tax 2,063 1,567 1,862
--------------------------------------- --------- ------------ ------------
Total current assets 6,357 10,917 10,935
--------------------------------------- --------- ------------ ------------
Total assets 63,265 85,302 69,222
--------------------------------------- --------- ------------ ------------
Liabilities
Trade and other payables (3,796) (2,585) (3,384)
Accruals and deferred income (1,659) (1,818) (2,036)
Lease liabilities (762) (724) (956)
Borrowings (1,700) (1,700) (1,700)
Total current liabilities (7,917) (6,827) (8,076)
--------------------------------------- --------- ------------ ------------
Net current assets/(liabilities) (1,560) 4,090 2,859
Non-current liabilities
Borrowings (6,948) (10,200) (6,181)
Lease liabilities (1,468) (2,102) (1,463)
Deferred tax liability (1,721) (6,099) (1,721)
Provisions (172) - (172)
Total non-current liabilities (10,309) (18,401) (9,537)
Total liabilities (18,226) (25,228) (17,613)
--------------------------------------- --------- ------------ ------------
Net assets 45,039 60,074 51,609
======================================= ========= ============ ============
Equity
Share capital 518 277 485
Share premium 71,129 60,677 70,860
Other reserve 12,691 12,691 12,691
Foreign currency translation
reserve (2,722) (2,662) (2,749)
Share based payment reserve 3,689 1,654 3,395
Retained loss (40,266) (12,563) (33,073)
Shareholders' funds attributable
to equity owners of parent 45,039 60,074 51,609
======================================= ========= ============ ============
Unaudited consolidated statement of changes in equity at 30 June
2022
Shareholders'
funds /
(deficit)
Foreign Share attributable
currency based to equity
Share Share Other translation payment Retained owners of
GBP'000 capital premium reserve reserve reserve loss parent
------------------------ --------- --------- --------- ------------- --------- ---------- --------------
Balance at 1 January
2021 (restated -
note 6) 277 60,677 12,691 (2,409) 1,354 (8,106) 64,484
Total comprehensive
(loss) - - - (190) - (4,521) (4,711)
Equity share-based
payment compensation - - - - 300 - 300
Balance at 30 June
2021 277 60,677 12,691 (2,599) 1,654 (12,627) 60,073
Total comprehensive
(loss) - - - (150) - (20,446) (20,596)
Equity share-based
payment compensation 4 163 - - 1,741 - 1,908
Proceeds from share
issues 204 10,020 - - - - 10,224
Balance at 31 December
2021 485 70,860 12,691 (2,749) 3,395 (33,073) 51,609
Profit and total
comprehensive income
/ (loss) - - - 27 - (7,193) (7,166)
Equity share-based
payment compensation 33 269 - - 294 - 596
Balance at 30 June
2022 518 71,129 12,691 (2,722) 3,689 (40,266) 45,039
------------------------ --------- --------- --------- ------------- --------- ---------- --------------
Unaudited consolidated statement of cash flows for the six
months to 30 June 2022
Six months Six months
to to Year to
30 June 30 June 31 December
GBP'000 2022 2021 2021
----------------------------------- ----------- ----------- -------------
Operating activities
Profit / (loss) before tax (7,072) (4,438) (31,019)
Non-cash adjustments:
Depreciation and amortisation 4,413 4,625 9,548
Share based payment charge 602 300 2,208
Impairment charges - - 19,597
Interest payable 212 204 465
Working capital adjustments:
(Increase) / decrease in trade
and other receivables (24) 2,544 3,377
Increase / (decrease) in trade
and other payables 34 (5,464) (4,864)
Net income tax received /
(paid) (302) (45) 1,194
----------------------------------- ----------- ----------- -------------
Cash generated from/(used
in) operations (2,137) (2,274) 506
----------------------------------- ----------- ----------- -------------
Cash flows from investing
activities
Purchase of property, plant
and equipment (38) (218) (586)
Development expenditure (3,000) (2,957) (6,919)
Payment for acquisition of
subsidiary - - (3,574)
Net cash used in investing
activities (3,038) (3,175) (11,079)
----------------------------------- ----------- ----------- -------------
Cash flows from financing
activities
Proceeds from share issues - - 10,391
Repayment of loans - (850) (5,839)
Payments for leased assets (379) (374) (840)
Loans acquired on acquisition - - 971
Credit facility 930 - -
Interest and finance fees paid (152) (204) (365)
Net cash generated from/(used
in) financing activities 399 (1,428) 4,318
----------------------------------- ----------- ----------- -------------
Net increase / (decrease)
in cash and cash equivalents (4,776) (6,877) (6,255)
Cash and cash equivalents brought
forward 5,465 12,086 12,086
Effect of foreign exchange
rate changes (27) (190) (366)
Cash and cash equivalents
carried forward 662 5,019 5,465
=================================== =========== =========== =============
Notes to the financial information for the six months ended 30
June 2022
1. General information
LoopUp Group plc (AIM: "LOOP", "LoopUp Group", or the "Group")
is a global provider of hybrid communication software and services.
It is a public limited 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.
2. Basis of preparation and significant accounting policies
These consolidated interim financial statements have been
prepared in accordance with UK adopted International Accounting
Standards ("IFRS") and IFRS Interpretations Committee (formerly
IFRIC) interpretations in accordance with international accounting
standards in conformity with the requirements of the Companies Act
2006. This results announcement does not constitute statutory
accounts of the Group within the meaning of sections 434(3) and
435(3) of the Companies Act 2006. The balance sheet at 31 December
2021 has been derived from the full Group accounts published in the
Annual Report and Accounts 2021, which has been delivered to the
Registrar of Companies and on which the report of the independent
auditors was unqualified and did not contain a statement under
either section 498(2) or section 498(3) of the Companies Act
2006.
The results have been prepared in accordance with the accounting
policies set out in the Group's 31 December 2021 statutory
accounts, which are based on the recognition and measurement
principles of IFRS.
These unaudited interim results have been prepared on the going
concern basis. At the balance sheet date, the Group had cash of
GBP0.7m and net assets of GBP45m. As announced on 1 September 2022,
the Group has entered into an agreement whereby it has the right to
transfer materially all of the business of PGi Connect, which the
Directors expect to contribute around GBP5m of net cash to the
Group in the twelve months following transition. As announced on 29
September 2022, the Group has raised additional capital of
approximately GBP3.5m. Given these factors and based on detailed
forecasts prepared by management, the Directors have a reasonable
expectation that the Group has adequate resources to continue
operations for the next twelve months, and as such these results
have been prepared on a going concern basis.
The results for the six months ended 30 June 2022 were approved
by the Board on 30 September 2022. A copy of these interim results
will be available on the Group's web site www.loopup.com from 30
September 2022.
The principal risks and uncertainties faced by the Group have
not changed from those set out in the Annual Report and Accounts
2021.
No impact is anticipated from new standards coming into effect
from 1 January 2022.
3. Revenue and segmental reporting
IFRS 8 Operating Segments requires operating segments to be
identified on the same basis as is used internally for the review
of performance and allocation of resources by the CODM. 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 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 (known as Cloud
Telephony). This capability, alongside the Group's longstanding
Remote Meetings and Managed Events capabilities, combine into a
category termed LoopUp Platform Capabilities (LPC). Revenue from
resale of Cisco WebEx services is categorised as 'third party
resale services'. In addition to the above segments adopted in the
2020 annual report and accounts, this year a new segment exists as
a result of the acquisition of SyncRTC in October 2021, that of
Hybridium.
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 both years.
No segmental balance sheet was presented to the CODM. It is not
possible to allocate overheads, and therefore profits, by segment
due to the pooled nature of the overhead base and the capital
structure. Overheads are not presented to the CODM on a segmental
basis.
The Group's revenue disaggregated by primary geographical
markets is as follows:
6 months 6 months 12 months
to 30 June to 30 June to 31 December
GBP'000 2022 2021 2021
--------------- ------------ ------------ ----------------
UK 2,674 5,417 8.664
EU 1,058 1,904 3,455
North America 2,813 4,015 7,108
Rest of world 87 164 299
--------------- ------------ ------------ ----------------
6,632 11,500 19,526
--------------- ------------ ------------ ----------------
The Group's revenue disaggregated by pattern of revenue
recognition is as follows:
6 months 6 months 12 months
to 30 June to 30 June to 31 December
GBP'000 2022 2021 2021
--------------------------------- ------------ ------------ ----------------
Services transferred at a point
in time 4,237 11,397 12,750
Services transferred over time 2,395 103 6,776
--------------------------------- ------------ ------------ ----------------
6,632 11,500 19,526
--------------------------------- ------------ ------------ ----------------
The Group's revenue disaggregated by segment is as follows:
6 months 6 months 12 months
to 30 June to 30 June to 31 December
GBP'000 2022 2021 2021
------------------------------ ------------ ------------ ----------------
LoopUp Platform Capabilities 4,590 8,925 14,843
Third party resale services 1,642 2,575 4,441
Hybridium 400 - 242
------------------------------ ------------ ------------ ----------------
6,632 11,500 19,526
------------------------------ ------------ ------------ ----------------
The Group's non-current assets disaggregated by primary
geographical markets are as follows:
6 months 6 months 12 months
to 30 June to 30 June to 31 December
GBP'000 2022 2021 2021
--------------- ------------ ------------ ----------------
UK 55,222 73,063 56,851
EU 170 1 253
North America 1,513 715 1,181
Rest of world 3 3 2
--------------- ------------ ------------ ----------------
56,908 73,782 58,287
--------------- ------------ ------------ ----------------
4. 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.
6 months 6 months 12 months
to 30 June to 30 June to 31 December
2022 2021 2021
------------------------------------- ------------ ------------ ----------------
Profit / (loss) attributable
to equity holders (GBP'000) (7,193) (4,521) (24,967)
Adjusted profit attributable
to equity holders (GBP'000)
(1) (5,407) (2,709) (4,938)
Weighted average number of ordinary
shares in issue ('000) 100,783 55,441 63,992
Basic earnings per share (pence):
* Basic adjusted (1) (5.4) (4.9) (7.7)
- Basic (7.1) (8.2) (39.0)
===================================== ============ ============ ================
(1.) Calculated using profit / (loss) for the period, adjusted
for exceptional reorganisation costs, exceptional impairment
charges, amortisation of acquired intangibles and share
based payment charges.
Since the Group made a loss in each of the periods above, there
were no potentially dilutive shares that were not anti-dilutive,
and the diluted earnings per share is identical to the basic
earnings per share.
5. Dividends
The directors did not recommend the payment of a dividend for
the years ended 31 December 2021 or 2020, or the six month periods
ended 30 June 2022 or 2021.
6. Prior year restatements
The annual report and accounts for the year ended 31 December
2021 set out certain restatements made to prior years which impact
on the 30 June 2021 comparative figures in this interim financial
information.
(a) Right of use assets
During 2021, the Group identified that certain assets,
liabilities and charges relating to right of use assets had been
misstated in prior years. These balances were restated as at 1
January 2020 and 31 December 2020, and the total adjustment
affecting the 30 June 2021 comparatives is set out below:
GBP'000
-------------------- ------
Right of use asset 603
Lease liabilities (977)
Prepayments 131
Trade creditors 60
Opening reserves 183
(b) Deferred tax
During 2021, the Group identified that in 2020 the deferred tax
liability relating to the customer relationship and brand assets
recognised on the acquisition of MeetingZone had been calculated at
the incorrect main corporation tax rate. This deferred tax
liability was initially calculated using a tax rate of 17%, as the
reduction to this rate had been substantively enacted through
parliament. However, in 2020, the UK government announced that the
rate would remain at 19%. An adjustment should have been made in
2020, through the deferred tax charge, to reflect the new tax rate.
The adjustment results in an increase of GBP518,000 in the Group's
deferred tax charge and deferred tax liability in 2020.
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END
IR QKLFLLKLLBBK
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