Loopup Share Discussion Threads

[molatovkid] 28/11/2020 10:44

Sounds to me like Numis are getting the push by Loop and know it

[thordon] 28/11/2020 10:39

Togglebrush

Well put together , Never seen a share price get destroyed like this on news that there non core asset 14% is under pressure.

Main PS
The switch to two year contracts at set rates has reduced the return rate but balanced by the increase in contracts.

So the Broker has based the facts that the non core will not exist next year , whilst taking into the repeat accounts but not factored in the Minutes used for non contracted work.

The broker also punished Loopup management for not posting a predicted revenue for next year except the contracted 2 year work and Cisco repeat rebuy.
Not many company are giving forward guidance.

[apad] 28/11/2020 10:14

FROM THE LOOP RNS.
Strategy: focus on PS sectors: secured flagship wins with three of the world's top-100 law firms, in the early stages of ramping up.
We have a pipeline of approximately £16 million Annual Contract Value of live opportunities.

Focus on launching our c.£3 million revenue Cloud Telephony business onto our global cloud platform under the LoopUp brand. This enables our customers to make and receive external calls via Microsoft Teams. The value proposition is differentiated through its voice quality and reliability, licensed international service provision coverage, and deep Microsoft Teams integration expertise. 

We expect to be licensed and regulated in more than 30 countries by the end of 2020, and approximately 60 by the end of 2021.
Our pipeline for cloud telephony live opportunities continues to grow rapidly, now standing at potential Total Contract Value of approximately £84 million4, 68% higher than reported in our half-year statement

We expect sales cycles to be approximately 6-8 months, but encouragingly we have already been selected by a leading private banking group to provide their global cloud telephony, subject to a successful 3-month proof of concept which starts next month.

MY ISSUE
Will Teams plus cloud telephony not only replace the general use of their systems, but parasitize their PS customers?

Any opinions?

apad

[diku] 28/11/2020 10:14

Its all in the name...did you miss the trick...Loopup turned into loopdown...

[togglebrush] 28/11/2020 09:30

The destruction of the LOOPup share price was virtually instant. At opening share price dropped from 155 to 110 instantly. Trades were going through at one every three seconds (18.7 per minute) during the first hour. Normally brokers notes, issued under embargo, are released to the press the day before, and the RNS officially released at 7.00 am
'
First Hour trading at 18.7 per minute was high of day. The low of day between 1300-1400 was 2.8 per minute whilst Average Daily rate was 6.7 per minute. Trading Volume in first hour was 30% of day but if you add in delayed trades you get 43% volume in First hour (volume and values similar). Averages values were over £5,000 until last hour when delayed trades came through at over £10,000. All the trades were “Off book", not through Direct Access. Negotiated price trades, of all varsities were 160 out of 3,440.
'
Median size of individual trades was £5,750 whilst only top one percent of trades were over £49,000 value (roughly £1 million total value). This was a market with experienced traders (HNW ?) taking advantage of brokers note , with little institutional activity, and ignoring blind sided private investors in my opinion.
'
The instant destruction of the share price by such a margin is unusual. IMHO the early release of NUMIS note to selected clients may be the reason for instant share price change.

[leewain] 28/11/2020 09:15

Thanks for that post thordon

[smraynot] 27/11/2020 21:32

Zoe is The way forward.

[letmepass] 27/11/2020 20:43

Big bounce coming next week for sure. 50% volume amazing .

[sbb1x] 27/11/2020 20:33

Paid research to crash the price so big guns can buy cheap...... I got it now,..... then new research comes out with 300% upside. Transfer of wealth ...

[thordon] 27/11/2020 20:23

Non-core revenue drags run-rate down
LoopUp has published a trading update detailing a modest miss for FY20,
but a materially lower-than-expected run rate as the business moves
towards FY21. The shortfall is attributable almost entirely to a faster-thanexpected and more dramatic decline for the LoopUp meetings product in
sectors outside the core focus Professional Services segment. We make
reductions in estimates to reflect this revised outlook – clearly this is
disappointing, but there are a number of positives within the parts of the
business likely to drive long-term value.
▪ Trading update The group has this morning announced an update,
describing the likely outturn for 2020 slightly below our previous
forecasts. This is driven by current trading showing an increase in meeting
minutes (up 43% overall) but a drop in revenue per minute (down 24%) as
more of the calls are domestic/dial-out and less are international/dial-in.
▪ Challenges most apparent in non-core areas The pressure is being most
clearly seen in the non-Professional Services side of the group, which is
seeing volumes 10% down y/y (even before the pricing impact described
above) and with customer churn running at around 30%. We had
expected pressure in this area, but not to the extent clearly being felt –
the competitive threats of Teams and Zoom (in these non-Professional
Services sectors) are combining with customer end-market challenges and
financial pressures to drive a dramatic decline in revenue and customer
numbers.
▪ Impact on estimates For 2020, the impact of this pressure is muted, given
that the bulk of the year has passed, and these effects have only recently
come to the fore. For 2021, however, the current annual run rate of
c.£34m is dramatically below our previous £56m estimate. We make a
relatively modest reduction to 2020 forecasts, but a much more material
cut to 2021 estimates to reflect this new reality.
Clearly the downgrades are a disappointment, and we are surprised to see
the scale and the pace of the pressure outside Professional Services.
Nevertheless, there are a number of bright spots – the growth in minutes
within Professional Services and the strong pipeline for the recentlylaunched product which seeks to benefit from the Cloud Telephony uplift
described above. We await further news and to see additional progress on
the core and emerging revenue streams.
0
50
100
150
200
250
300
FYE DEC (£M) 2017 2018 2019 2020E 2021E
LoopUp Revenue 17.5 34.2 42.5 50.1 35.2
Adjusted EBITDA 3.5 7.7 6.4 15.1 6.1
Adjusted PBT 0.7 4.1 0.5 8.4 -0.3
Adjusted EPS 4.4 9.3 2.2 14.7 -1.0
EV/Sales 5.1x 2.6x 2.1x 1.8x 2.5x
EV/ Adj. EBITDA 25.7x 11.6x 13.9x 5.9x 14.5x
P/E 35.0x 16.7x 71.7x 10.5x n.a.
Source: Company Information and Progressive Equity Research estimates
LOOPUP IS A RESEARCH CLIENT OF PROGRESSIVE
ANALYSTS
Gareth Evans
[phone]
[e-mail]
Ian Poulter
[phone]
[e-mail]
27 November 2020
2 LoopUp
Changes to estimates
We make the changes as shown below to our forecasts, reflecting management guidance
for 2020 as described in the RNS, and a view of 2021 based largely on the current run-rate,
again as described.
From the current run-rate revenue of some £34m, we expect modest ongoing decline in
the Cisco business and non-Professional Services revenues…together this could reduce
sales by £2m per year.
Offsetting this, we expect the new Cloud Telephony revenue streams to begin to contribute
modestly in 2021 as the Teams-based sales opportunities continue to convert. The pipeline
for this business appears extremely strong at some £84m in total contract value, suggesting
a good level of customer interest and strong long-term potential.
The major unknown for 2021 is the core LoopUp Meetings business within the Professional
Services sector. We would hope that this should perform strongly, driving revenues higher
as customers unwilling to rely on the public internet, and for whom call quality and security
are paramount, continue to use LoopUp for important meetings. There is, however, risk
that the current “boost” to minute volumes could abate as working patterns normalise –
this would reduce the scope for revenues to grow overall. Offsetting this risk, however, we
would expect per-minute prices to rise as the mix perhaps moves back to a more normal
level of international and dial-in minutes….these higher-rate services would improve the
mix and add to revenues.
Balancing all these factors, we suggest that a revenue level modestly, but not materially
ahead of the current run-rate level might be a realistic view for 2021. We model this, as
shown in the table below, with the knock-on impact on Adjusted EBITDA and other financial
metrics.
CHANGES TO ESTIMATES
Source: Progressive Equity Research estimates
FY20E
£m unless stated Old New Change (%) Old New Change (%)
Revenue 54.8 50.1 -9% 56.0 35.2 -37%
Adj EBITDA 17.3 15.1 -13% 13.3 6.1 -54%
Fully adj PBT 10.5 8.4 -20% 5.9 -0.3 nm
Fully adj EPS (p) 17.2 14.7 -14% 9.3 -1.0 nm
FY21E
27 November 2020
3 LoopUp
Positive elements
There are, despite the obvious pressures, a number of positives within the announcement:
▪ Professional Services client base The group is seeing strong ongoing demand within
the Professional Services segment, for which the product is tailored and where
customers continue to value the unique attributes, unmatched by Teams, Zoom or
other platforms. Client wins for H2 are described as including three of the world’s top
100 law firms, and the pipeline is strong at an Annual Contract Value of some £16m.
▪ Teams-telephony product showing strong early signs Cloud Telephony revenues could
evolve materially, with the recently launched proposition for Teams telephony
providing a major revenue opportunity. The pipeline for this business stands at a Total
Contract Value of £84m, some 68% higher than the previous figure of c£50m given with
at the time of H1 results in late-September.
▪ Meeting minute volumes remain buoyant The current level of minute volumes within
Professional Services (roughly 56% up y/y) remains extremely strong; if this can persist
into 2021 as work returns to something more approaching “normal” next year, then the
group is well placed.
▪ Price-per-minute mix could recover The current reduction in average revenue per
minute reflects a lack of international calls – presumably as international deals are
depressed, and cross-border activity is at low levels. If these types of usage return, then
average prices per minute will rise, adding to revenue.
Summary and conclusion
Overall, today’s news is clearly a negative development, but the vast majority of the
disappointment relates to the business that is already identified as non-core (i.e. the
segments outside Professional Services) which now accounts for just 14% of LoopUp
Platform revenues.
The scale and the pace of the drop-off in client revenues has been a surprise, as the
pressures of both challenging end markets and the emerging success of Teams and Zoom
have combined to dramatically reduce LoopUp revenues. Nevertheless, LoopUp remains
well positioned (and performing strongly) in its core and target Professional Services sector,
and well placed to deliver on the potential for Teams-based Cloud Telephony.
27 November 2020
4 LoopUp
Financial Summary: LoopUp
Year end: December (£m unless shown)
PROFIT & LOSS 2017 2018 2019 2020E 2021E
LoopUp Revenue 17.5 34.2 42.5 50.1 35.2
Adj EBITDA 3.5 7.7 6.4 15.1 6.1
Adj EBITA 3.2 7.1 4.9 12.9 4.2
Reported PBT 0.7 0.4 (2.8) 5.6 (2.8)
Fully adj PBT 0.7 4.1 0.5 8.4 (0.3)
NOPAT 0.7 4.5 1.2 8.7 0.0
Reported EPS 4.4 2.3 (3.3) 7.6 (2.7)
Fully adj EPS 4.4 9.3 2.2 14.7 (1.0)
Dividend per share 0.0 0.0 0.0 0.0 0.0
CASH FLOW & BALANCE SHEET 2017 2018 2019 2020E 2021E
Operating cash flow 3.1 4.4 6.7 11.6 (1.7)
Free Cash flow (0.1) 4.4 4.4 9.5 (1.7)
FCF per share (0.3) 8.3 7.4 15.6 (2.8)
Acquisitions 0.0 (65.9) (5.0) 0.0 0.0
Disposals 0.0 0.0 0.0 0.0 0.0
Shares issued 0.9 47.9 0.1 0.0 0.0
Net cash flow 0.7 (13.5) (0.9) 9.5 (1.7)
Overdrafts / borrowings 0.0 (16.2) (14.5) (12.8) (11.1)
Cash & equivalents 2.9 5.6 3.0 10.8 7.4
Net (Debt)/Cash 2.9 (10.6) (11.5) (1.9) (3.6)
NAV AND RETURNS 2017 2018 2019 2020E 2021E
Net asset value 10.5 59.9 58.1 62.7 59.4
NAV/share 25.6 109.0 105.2 113.6 107.5
Net Tangible Asset Value 0.5 2.2 6.0 4.6 3.5
NTAV/share 1.1 3.9 10.8 8.3 6.3
Average equity 9.1 35.2 59.0 60.4 61.9
Post-tax ROE (%) 8.0% 11.6% 0.9% 13.8% (0.5%)
METRICS 2017 2018 2019 2020E 2021E
Revenue growth 36.2% 95.9% 24.3% 17.8% (29.8%)
Adj EBITDA growth 67.8% 121.1% (16.2%) 135.0% (59.4%)
Adj EBITA growth 74.5% 124.1% (30.5%) 161.0% (67.4%)
Adj PBT growth (354.9%) 459.9% (87.4%) 1528.1% (103.3%)
Adj EPS growth 722.4% 109.8% (76.8%) 582.2% (106.5%)
Dividend growth N/A N/A N/A N/A N/A
Adj EBITA margins 18.2% 20.8% 11.6% 25.7% 11.9%
VALUATION 2017 2018 2019 2020E 2021E
EV/Sales 5.1 2.6 2.1 1.8 2.5
EV/EBITDA 25.7 11.6 13.9 5.9 14.5
EV/NOPAT 122.9 19.5 76.6 10.3 3811.2
PER 35.0 16.7 71.7 10.5 n.a.
Dividend yield N/A N/A N/A N/A N/A
FCF yield (0.2%) 5.4% 4.7% 10

[pugugly] 27/11/2020 20:20

Pratt2 - Full research note available on their site - Looks as though free to register - 1st time I have come across them.
As paid for research no price targets but = if I am reading correctly - they are forecasting an actual loss for fy 2021

[pratt2] 27/11/2020 19:46

Does anyone have access to the Progressive Equity update today? I can only see the synopsis on their website and nothings up on research tree yet annoyingly.LoopUp has published a trading update detailing a modest miss for FY20, but a materially lower-than-expected run rate as the business moves towards FY21. The shortfall is attributable almost entirely to a faster-than-expected and more dramatic decline for the LoopUp meetings product in sectors outside the core focus Professional Services segment. We make reductions in estimates to reflect this revised outlook – clearly this is disappointing, but there are a number of positives within the parts of the business likely to drive long-term value.

[leewain] 27/11/2020 19:20

An AIM trap by the sounds of it

[wee jimmy] 27/11/2020 19:02

The gut feel I had from the tone of the Numis note was that the analyst was demonstrating his displeasure at the BOD by withdrawing his recommendation and slashing numbers for next year, perhaps more aggressively than the facts might justify. Perhaps his way of trying to save face for Numis who clearly have read the management very poorly and have also let down those of their clients who are shareholders.

[pratt2] 27/11/2020 18:46

Not sure about this. Net debt is only 2m so not an issue at all.Also 2021 Numis estimates are based on 32m revenues which I think is v low personally. Let's see

[pugugly] 27/11/2020 18:20

Stockopedia most interesting comment today - As behind a paywall just two hints but feel entitled to publish here as relate to a savage downgrade by Numis - (congratualtions to Paul for making them available) These are for 2021 (e&oe)Cash outflow £3.5m, and PBT £1.3m -

As house brokers usually are over optimistic even these figures suggest to me that a slight miss to the downside would be sufficient to push the company into a loss.

In adition some 70% of net assets are intangibles - So what value (if any) if Zoom and other players make significant inroads to Loop's market.

Also have a look at interims re level of bank debt - not nice.

A gamble (imo) even at today's closing price of 76/78p

[leewain] 27/11/2020 18:13

Im not short. Good luck all holders, keep the faith.

[letmepass] 27/11/2020 17:38

50% of stock traded. Added at 80p.big bounce coming next week

[molatovkid] 27/11/2020 17:37

Final Thought For The Weekend.

If you are short, better pray the directors havn't been loading up today.

Scorchio Monday morning if so!

[leewain] 27/11/2020 17:32

Long term contracts are factored in my friend. So instead of making presumptions forecast at the lower end of the spectrum where you know you can deliver. As I say once again, very amateurish.

[molatovkid] 27/11/2020 17:24

Many companies are not giving any forward guidance due to COVID....an amateur mistake indeed - you said it !

[leewain] 27/11/2020 17:17

Every company makes predicts on forward guidance and the nomads publish that. It seems to me that the lack of forward guidance and the ability to "overstate" earnings without going into great depths about the LT contracts shows a lack of ability of the BOD. Amateur mistakez. Know your business.

[leewain] 27/11/2020 16:50

Gapping up on monday? MMs may buy their own stock to create interest then sell out once theyve sucked in buyers.

[eezymunny] 27/11/2020 16:49

Err f/c pbt next year only 1.5m?!

Forget this year, which was as lucky as they´ll ever be presumably...