Toople PLC Trading Statement (2610A)

TIDMTOOP

RNS Number : 2610A

Toople PLC

23 March 2017

23 March 2017

Toople Plc

("Toople" or the "Company" or the "Group")

Trading Update

Toople Plc (LSE: TOOP), a provider of bespoke telecom services to UK SMEs, provides the following update on trading.

Since announcement of the Company's results for the year ended 30 September 2016, the Board has seen increasing competition in the SME broadband market such that it has become increasingly difficult for the Group to differentiate itself around this service as originally anticipated when the Toople brand was launched, in May 2016.

As detailed in the full year results, the Company is consistently evaluating its marketing efforts to ensure that the most effective routes to market are utilised, both from a delivery and cost perspective. As a result of the increasing competition in the broadband market, and recent changes in the cost of customer acquisition through certain channels, the Company is currently reviewing funding options to provide additional working capital and to accelerate sales growth in the higher margin, retail business.

Accordingly, the Board intends to focus on driving its cloud business telephony service, which has the benefit of having higher margins. The Company has seen strong interest in the newly launched telephony service which the Board believe should provide a key driver for new customer acquisition going forward. In addition to having higher margins, the telephony service has the additional benefit that customers (to date) are typically signing 36 month agreements. Over 70% of these customers also order Toople broadband for the connectivity. Growth in this service since launch has offset a downturn in new orders in the non-strategic, lower margin, wholesale business in the first two months of 2017.

The Board anticipates revenue growth in the period for the six months to March 2017 to show an increase in excess of around 60% over the same period in the prior year (H1 March 2016), and an increase of approximately 19% against the prior half (H2 2016). Losses for the period (H1) are expected to be reduced by circa 50% against H2 2016. The Board continues to focus on tight cost control.

Currently Toople has over 600 small businesses directly contracted with in excess of over 1,000 RGU's (revenue generating units) across the customer base. *

*Wholesale numbers are excluded from this figure.

Andy Hollingworth, CEO, Toople Plc, said, "The Board believes that Toople's proposition remains clear and attractive to the SME market. As a small company we have the benefit of being able to react swiftly when we see the market changing and whilst the increasing competition in the SME broadband market has provided us with additional challenges, we have been able to react and shift our focus to driving forward the cloud based telephony business as our flagship customer entry point. Early indications are that the Company's cloud business telephony service is being well received by the SME market and the margins associated with this are attractive. With the market opportunity being clear, we will explore options to ensure we are able to capitalise on this effectively and drive further growth."

- ENDS -

For further information:

 
 Toople PLC                         0800 0499 499 
 Andy Hollingworth, Chief 
  Executive Officer 
 
 Hybridan LLP                       020 3764 2341 
 Claire Louise Noyce 
 
 Redleaf Communications             020 7382 4730 
 Rebecca Sanders-Hewett      [e-mail] 
 Charlie Geller 
 Sam Modlin 
 

Notes to Editors

Toople Plc offers broadband, VoIP and landline services and mobile phone packages to SMEs in the UK. Customers can visit the Toople.com web site to buy online, request a quote or instantly chat with an agent and chose the services relevant to their business.

The web site is powered by Toople.com proprietary Merlin software; a cloud based telecoms resourcing platform that acts as a portal for transparent, live pricing for services across the main four providers. Merlin also makes it easy for customers to add new services to their bespoke packages at any time.

Toople Plc has three core elements to its business. Firstly Toople.com, its online first approach for small businesses where customers can buy connectivity, mobility and business telephony in a simple online journey. Customers can do this by simply requesting a quote or instantly engaging into a chat with an agent. Potential customers experience Toople.com through digital media channels like Google, Bing, Business cost comparison sites and social media. Secondly, the wholesale business has a number of other telecoms companies that buy services wholesale, white label the propositions and resell on to their own customers. Thirdly, the Merlin software platform gives access to wholesalers who want to interconnect with carriers for provisioning and billing services for their own customers, where a monthly licence fee is applicable to access merlin.

Toople plc is addressing a market of over 5 million companies in the UK that are employing less than 50 people. These companies are looking for straightforward telecom solutions, explained in a way that they can understand, provided at attractive consistent prices and backed up by high quality service support. Toople aims to be easy to do business with, offering transparent, competitive pricing and excellent UK based customer service. The Company plans to rapidly increase brand awareness and build its client base through strategic on-line marketing campaigns.

This information is provided by RNS

The company news service from the London Stock Exchange

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March 23, 2017 03:01 ET (07:01 GMT)