Loopup Share Discussion Threads

[bookbroker] 16/1/2021 20:16

I think it is the other way round, more like Loop needs M/S Teams!

[thordon] 16/1/2021 20:01

Means Microsoft Teams needs Loopup for the future and going main stream

[thordon] 16/1/2021 20:00

H##ps://www.enterpriseconnect.com/virtual/connecting-microsoft-teams/direct-routing

[bookbroker] 16/1/2021 18:47

Please explain?

[kirk 6] 16/1/2021 17:33

Fantastic news

[bookbroker] 15/1/2021 19:45

His board is packed with PhD’s, so just need a little business acumen, and maybe bingo!

[bookbroker] 15/1/2021 08:34

Not sure, but likely writedown the value to the business of the carrying value of Meeting Zone, acquired back in 2018 for £62mln approx. That seems a large part of the intangibles, it is what they deem its worth to the business now, so it may incorporate a writedown, but as such a non-cash one!

[yump] 14/1/2021 19:09

Nobody seems to be addressing why the rating was quite low before the drop, given it is in an investors' sweet spot in terms of its market and the covid situation last year.

imo IF revenue is going to drop from £50mln to £35mln, I would be very surprised if the accounts don't include a large impairment charge, because the assumed benefits from the R&D on which basis it is allowed to be capitalised, will not be happening.

NB Capitalising R&D spreads out the cost to whatever number of years you can agree on with your auditors and takes it out of the P&L account, so reported profit is flattered.

[bookbroker] 14/1/2021 18:50

Like to see some of the directors in this company dig deep in to their pockets once the results are published, performance utterly pathetic, and no signs yet of a return in confidence by the market. This stock needs a real boost in sentiment, seems beset by banana skins!

[brucie5] 14/1/2021 13:03

Excellent reminder thanks.

[robow] 14/1/2021 12:41

thanks SEV22

[sev22] 14/1/2021 12:36

The article below was published by Simon Thompson, Investors Chronicle, on the 30th November 2020. Since then the country has entered another National Lockdown which is likely to last until at least the end of March 2021.

Investors overreact to LoopUp warning.

■ Higher churn and lower revenue in non-professional segments.

■ Pipeline of live cloud telephony opportunities has potential contract value of £84m.

LoopUp (LOOP:84p), a London-based premium remote conference meetings company, downgraded revenue expectations on Friday while I was on leave. The market reaction was savage with the shares halving in value and slicing through my 138p entry point (‘Tap into the remote working boom with LoopUp’, 2 July 2020). Having seen the share price rally 80 per cent to 250p by late summer, passing through my initial 225p target price in the process, the holding is now 40 per cent underwater. Although any downgrade is disappointing, in this case I feel investors have massively overreacted.

Firstly, business remains strong in LoopUp’s key professional service verticals where data privacy and security is paramount (law, accountancy, investment banking, corporate finance, private equity, asset management, insurance, PR and marketing). Minute volumes are 43 per cent higher on average (during September and October) than pre-pandemic levels. This growth driver is still in place.

Secondly, the issue is in non-professional (and non-core) segments which account for 14 per cent of platform revenue. Minute volumes have fallen 10 per cent (compared to pre-pandemic levels), and churn has spiked to 30 per cent, a reflection that non-professional segments face greater competition from rivals Zoom and Microsoft Teams, and clients suffer greater financial distress and have higher levels of employee furloughing. Although this pressure is unlikely to ease anytime soon, these are non-core segments and account for a diminishing amount of LoopUp’s overall revenue.

Thirdly, there has been a shift in the call mix towards lower-rated domestic and dial-out minutes away from higher rated international and dial-in minutes, a reflection of the depressed number of international deals being done. This in turn has impacted the average revenue per minute. However, as cross-border activity bounces back from depressed levels during the global economic recovery, then international usage should bounce back, too.

Fourthly, although analysts at Panmure Gordon have downgraded their 2020 revenue estimates from £55.6m to £50m, cash profit will still be more than double from £6.4m in 2019 to £15m to deliver annual pre-tax profit of £8.3m and earnings per share (EPS) of around 14.5p. Moreover, analysts’ new 2021 revenue estimate of £35.5m is based on LoopUp’s current revenue run-rate of £34m and factors in no contribution from the recently launched cloud telephony [integrated with Microsoft Teams] business. This product offering enables clients to make and receive external calls via a third-party network direct routing to companies using Microsoft Teams, alongside its own premium remote meetings capability.

Bearing this in mind, the directors note that the pipeline of live opportunities here has a potential contract value of £84m, up from £68m just in late September. They also revealed that the company has been selected by a private banking group to provide their global cloud telephony, subject to a successful three-month proof of concept trial which starts in December. In other words, the pipeline is being converted.

Fifthly, the company has paid down substantial amounts of debt this year. In fact, analysts at Progressive Equity Research expect net borrowings of £1.9m at the end of December 2020, a sum that is £9.6m lower than 12 months earlier. This means that although their 2021 cash profit estimate of £6.1m is less than half previous estimates of £13.3m (due to the lower revenue run-rate), LoopUp’s enterprise value of £48m now equates to only 8 times downgraded cash profit forecasts, a massive 41 per cent discount to the UK Small-Cap Technology sector average multiple of 13.5 times 2021 enterprise value to cash profit.

The point is that as LoopUp converts its pipeline of potential contracts in the cloud telephony [integrated with Microsoft Teams] business, and cross-border activity bounces back to more normal levels (thus driving up higher margin international call volumes), there is scope for the current revenue run-rate of £34m to ratchet up and drive profits higher. 'Strong recovery buy.'

[kirk 6] 14/1/2021 12:01

Having a re-read of the latest results, this is one of the most extremely undervalued stock I have come across. What on earth did it drops so much for? This is growing revenues, in the right market, growing exponentially

[oakville] 14/1/2021 07:33

Expecting strong movement higher in the first quarter of 2021.

[kirk 6] 13/1/2021 20:35

Hope so NY!

[ny boy] 13/1/2021 20:18

Kirk, we should see a run up before the next quarterly trading statement due last week of February

strong GBP11.6 million cash balance (at end October 2020)!

Hopefully around 100p before the TS

[kirk 6] 13/1/2021 20:14

I do think this is very cheap stock and know a few business that use Loop and only extremely positive feedback

[kirk 6] 13/1/2021 20:02

Ave 79.9 currently. Won't tell you how many I hold as you will say I'm lying

[kirk 6] 13/1/2021 20:01

No been buying over the last month. Hold a big position and am in Profit

[bookbroker] 13/1/2021 18:41

Then you are nuts , likely a huge loss also!

[kirk 6] 13/1/2021 18:24

I course I hold a huge amount of stock

[yump] 13/1/2021 16:53

You mean you want it to

[kirk 6] 13/1/2021 16:40

Looking likely to move much higher in the short to medium term