interesting piece on cloud costs |
 Results
Revenue increased by 11% to £14.3 million (H1 2023: £12.9 million). Whilst 62% of revenues were generated from Managed Services (H1 2023: 70%), we continue to see customers investing in new hardware and technology by purchasing value-added resales services.
We are seeing an increasing number of these value-added resale sales being transacted via our e-commerce platform (morecoco.co.uk), which has seen revenue growth of 125% during this half-year to £3.6 million (H1 2023: £1.6 million). Whilst the gross margin on e-commerce sales is lower, this is offset by a lower cost of operational delivery.
As a result, gross profit remained stable in this half year at £4.3 million (H1 2023: £4.3 million), representing a gross margin of 30% of revenue (H1 2023: 34%). This reduction reflects the change in the mix of business described above and the increased ratio of third-party suppliers (such as Microsoft) in our solutions.
The internal focus on achieving cost savings and increasing efficiencies within our operations saw administrative expenses reduce by 4% to £4.9 million in the period (H1 2023 £5.1 million), with Trading Group EBITDA1, increasing to £1.2 million for the half-year (H1 2023: £0.9 million).
In order to fix prices in some of our data centre locations, we entered into a number of new term lease agreements with key providers such as Equinix, Pulsant and Virtus. This allowed us to negotiate new terms and freeze prices for a period instead of enduring variable prices as a result of power price fluctuations. These new longer-term leases are reflected in an increase in the Depreciation of IFRS16 data centre leases to £0.6 million in this half year period (H1 2023: £0.4 million).
After accounting for these depreciation costs, together with plc costs of £0.5 million (H1 2023: £0.4 million), exceptional items and share-based payments of £0.2 million (H1 2023: £0.1 million), amortisation and other depreciation of £0.6 million (H1 2023: £0.7 million) and accrued net interest costs of £0.5 million (H1 2023: £0.4 million), the loss before taxation for the period was £1.2 million (H1 2023: loss of £1.2 million).
The Group incurred a net cash outflow during the period of £0.2 million, compared to the balance reported at 30 September 2023. The main components being:
· Cash inflow generated from operating activities of £0.7 million (H1 2023 £0.3 million);
· Payments of lease liabilities including IFRS16 data centre leases of £0.8 million (H1 2023: £0.5 million); and
· Cash outflow from investment in assets, interest payments and payment of deferred consideration totalling £0.1 million (H1 2023: £0.1 million).
Outlook
We have made some headway in terms of accelerating sales and delivering excellent customer support levels during the year and this work will continue. In addition, we have identified a number of operational efficiencies and savings that have been implemented that will help to drive down our costs and will in turn improve cashflow to help strengthen our financial position. We will continue our efforts to grow and improve the business by building on the foundations we have created to date. |
Chairman's Statement
I am pleased to report our interim results for the period ended 31 March 2024.
During the period under review we have continued to focus on three key strategic objectives:
• to accelerate sales;
• to maintain excellent support levels; and
• to drive efficiencies and strengthen our financial position.
Despite ongoing economic headwinds, we have remained focussed, delivering growth in revenues and Trading Group EBITDA1. Further details of trading during the six months ended 31 March 2024 are set out in the Business Review below.
As reported in the 2023 full year accounts, much of the first six months of FY24 were spent exploring options to refinance the legacy loan notes, which under the original terms were due for repayment in October 2024. This was concluded on 29 April 2024 when we reached agreement with our existing loan note holder, MXC Guernsey Limited ("MXC"), to extend the redemption date of the loan notes to 31 August 2026.
At the same time, Mark Halpin stepped down from the Board and his position as CEO and Ian Smith (CEO of MXC Capital Limited, the parent of MXC) joined CloudCoCo, initially as a consultant to the Board, acting as Interim CEO of the Group's trading entities.
Ian's initial remit is to carry out a full strategic review of the Group, in order to advise the Board on where the value sits within the business and how that value can be maximised to improve the Group's trading performance and financial position. MXC remains supportive both as a shareholder and loan note provider. However, it is clear that the loan notes will not be able to be repaid within the required period via operating cash flows and so we continue to work with MXC to find the best solution for the repayment of the loan notes.
The Group is complex and it is taking time to analyse all of the data into the four business units we believe best reflect the services provided, namely Managed Services, Infrastructure Services, Telecoms and Product. This analysis will help determine the core and non-core elements of the Group and will underpin the value maximisation work referred to above. Going forward, we hope to be able to provide further reporting in each of these units.
This work is ongoing and we will update shareholders as we progress. We understand this has been a prolonged period of uncertainty and want to reassure investors we are are committed to navigating it with determination and transparency.
In our daily activities, we are continuing with a "business as usual" approach, focussing on sales and pipeline generation across all of the Group's revenue streams. Despite the challenging economic environment we continue to operate in, which is impacting the purchasing decisions of certain of our customers, we had some pleasing new business wins during the period and continue to build a solid pipeline. Mindful of the broader economic realities, and to improve our working capital position, we continue to reduce costs within the business wherever possible to ensure we are as efficient as we can be.
I would like to thank our staff for their continued commitment during this transitional period and their hard work in retaining key clients and delivering high customer satisfaction levels.
With the continued support of our staff, customers and suppliers, we look forward to making continued steady progress in the second half of the financial year.
Simon Duckworth
Chairman |
Interim Results
CloudCoCo (AIM: CLCO), a leading UK provider of Managed IT services and communications solutions to private and public sector organisations, is pleased announce its interim results for the six months ended 31 March 2024 ("H1 2024").
Financial highlights:
·
Revenue increased by 11% to £14.3 million (H1 2023: £12.9 million), of which 62% was generated from Managed Services (H1 2023: 70%)
·
E-commerce revenues from MoreCoCo increased 125% to £3.6 million (H1 2023: £1.6 million)
·
Gross profit remained stable at £4.3 million (H1 2023: £4.3 million), a reduced margin of 30% (H1 2023: 34%) as a result of the increase in e-commerce and other one-time revenues which typically command a lower margin
·
Continued focus on saving costs and increasing efficiency, with administrative expenses reduced by 4% to £4.9 million (H1 2023 £5.1 million)
·
Trading Group EBITDA1 increased by 33% to £1.2 million (H1 2023: £0.9 million)
Operational highlights:
·
24 new "logo" customers added in the half (H1 2023: 27), reflecting the continued investment into the Group's sales and marketing functions
·
New multi-year customer wins including Support Warehouse, Allied Services Limited and High Availability Hosting Limited
·
Increase in Cyber Security revenues driven by real-time threat reporting and management
·
Strategic partnerships with Ingram Micro and Solace Global Cyber continue to enhance the Group's capabilities and create new revenue opportunities
·
Continued improvement in customer satisfaction levels currently sitting at 97.8% at June 2024
·
ISO27001:2022 Accreditation extended across all Managed Services businesses
1 profit or loss before net finance costs, tax, depreciation, amortisation, plc costs, exceptional costs and share-based payments
Ian Smith, consultant to the Board and Interim CEO of the Group's trading entities, commented:
"These interim results do not reflect the period of my tenure, but they do highlight a number of the challenges that the business faces and which we will work on resolving to ensure the Company can meet its liabilities and is able to look to the future with confidence." |
1% of free float announced after hours.I'd say a worked sell, however the action the last few days might seem otherwise. |
Wakey wakey |
Seems someone bought 326590 yesterday at the full 0.4 asking price, then flogged today for a 10% loss plus fees.
Sounds "hazl-esque" trading style to me. |
Bless,
I'm presume Hazl making comments here because I called her a berk.
She should stick to doing sums with toddlers and leave investing for the adults. Or try and be honest in her other holdings as it seems most people have caught on to what a cretin she is.
Meanwhile, we have some bottom fishers here. Was painful to sell my shares at such a loss but nice to get a bit back.
Ciao. |
This person has been pushing this company for simply years and yet follows me around giving advice.
ZICO told him a long time ago about him getting over exuberant here but he ignored.
I know nothing about this company and don't wish to spoil it for anyone genuine here, but watch out for Beeks.
He is just talk and no substance in my opinion.
IMO |
And up again. |
Another Halpin aligned member gone. The clearout continues. |
Ooh hello! |
Question is do they still have the same sales and growth fire power with Mark stepping down? He says on LinkedIn he’s still invested in CLCO, so there must be some confidence going on behind the scenes! |
Yep, let's see what mid year gives us. No reason why they can't get these out pronto. |
Haven't found any turnaround action plan in the finals. Just weasel words really. |
Stockpicker - if you believed the story prior to last week then it's not overly changed, except there isnt a looming debt call.I've softened slightly on things here, especially at this price. Happy to see how the situation goes and give the mid year results a viewing. Have a good weekend all. |
MXC are really going to struggle to exit their investments and wind up as they want to.TIA results out, and not a single trade. Company doing well enough underneath but I do struggle to see how they exit without a wholesale sale to another insti. In this market not gonna be easy.An enlarged TIA/CLCO could have legs though. I wonder what the board are thinking? |
TIA results out today, very similar theme to CLCO.Bear in mind that CLCO took over some underperforming stuff from TIA (then IDE) which didn't help. I wonder how TIA would have looked if that had not happened. |
Stockpicker - you are putting blame in the wrong corner. MXC are not the baddies here, they have shareholders of their own to satisfy and can't just give money away. Additionally CLCO have had many years to sort this, and didn't.The board here are the only ones to blame. The excuse of "being too busy" to get the accounts out because they were busy trying to do the financing is mind boggling - I was reserved when announced (classed it as a yellow card) but it's absolutely shocking leadership of a public company when you start to put the pieces together. Was the leadership expecting to walk in to the local tsb and get a loan? How did they think this would play out, and why did they not start this process in 2022, 2023? How did it suddenly become only a footnote for investors in November? (Even though well flagged by Markwell and Z1co on here). How did they not realise that with a debt the size of the company to refinance in the next financial year that the auditors were likely not gonna sign the accounts off? Some mitigation there that money markets seem to have really hardened the last 6 months, but the leadership should really have had a better handle on this.There's a good company here underneath the Corporate structure. A piece of the poor performing bit at the top has now gone and it needs some better leadership to take this forward. In fairness Mark has done a fantastic job growing the company, but Cordswainer nailed it that it's been too "flamboyant" and needs a steady head now. |
At the end of the day it’s only money and noone should invest more than what they are willing to lose. But, MXC have got a lot to answer to here there’s going to be lots of angry shareholders where lack of communication and annihilation through an inherited debt has been left unchecked. Things have moved on over the years and if anything underhand has gone on then they must be held accountable!! Literally, £millions of pounds has been wiped off in the share price which is hurting MXC and all the BOD who hold shares. I really do hope someone comes along who can sort this out. If there’s a pretax profit growth to £8m then what the hell is actually going on??? |
Well well well is this a time to get more and average down or just watch as chaos rolls out everywhere!! This is not the break into profit and 4-5p a share I was expecting at all. All at the hands of MXC and their inherited debt. Something be try underhand seems to be going on here for sure. What do MXC have to gain by ramping up a debt that they won’t be able to retrieve? I’m sure in 2019 the original 4m debt was fixed and to repay? Mark and the team had been doing so well why have MXC done this???? They’ve caused this they need to fix it!! |
What's needed is the interim boss to give a candid update, and immediately get the trading update out. Plenty of synergies with TIA now, can't rule out some kind of merger there either in the long term.MXC want their value out, will be interesting to see how they play this. |
Still a good line available by the looks. |
Got 1.3m across 2 trades.Likely printed in an hour. |
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