Loopup Share Discussion Threads

[rimau1] 09/5/2020 17:22

No problem Maddox. Main takeaways were (1) bizarrely covid should result in 2020 being broadly similar to original analyst forecasts at the time of the meetingzone acquisition In 2018. At that time the placing price was £4 and the stock price traded between £4.50 and £5.50 so if management can regain their credibility Loopup could command a much higher valuation (2) the significant forecast growth in revenues makes the amortisation and depreciation charges pretty immaterial aka there is a degree of operational leverage that we should benefIt from in 2020 onwards (3) the market has not realised the 40% growth in revenues only relates to March onwards i.e the covid benefit is much greater, so we are significantly undervalued. Of course the covid benefit will reduce eventually but the structural change has already occurred i.e acceptance that less office space is required, significant cost savings, responsible corporate travel and the acceptance of broad based WFH being the new norm

[maddox] 09/5/2020 13:46

Hi rimau,

Thanks for sharing your analysis - hope you're correct on the share price target of 250p of course. It is always insightful to model a firm - reality invariably leads to a different outcome - but it's the better understanding of the business model that is most valuable. Might I ask what insights you gained from your model?

[rimau1] 09/5/2020 11:43

I have now performed a deep dive on Loopup. I model FY20 revenue at £65m and clean PBT of £9m. Loopup is significantly undervalued and based on my numbers is currently trading at 1.2x revenue with a forward PE of 8. I conservatively value Loopup at 15 times earnings or £2.50. Of course you can justify a lot higher rating but given historic issues and underperformance and the tough comparatives that we will face in 2021 this is my 2020 price target.
Revenue of £65m assumes that Jan and Feb 2020 were flat on prior year as higher churn and lower M&A activity were offset by sales efficiency improvements and Pod team roll out. I assume Mar and Apr revenue were 40% higher than prior year for Core Loopup, Events, and Enablit and that this performance continues for the remainder of the year driven by strong new client acquisition in H1 and organic demand. I model that organic demand drops off in Q4 but that this is offset by the continued impact of H1 client acquisition. I prudently assume new clients have 8 weeks before they generate revenue, so a time lag benefits Q4. I assume Cisco resale revenues grow 10% over the year vs 2019. In terms of clean PBT i assume cost of sales grow in line with revenue, admin expenses grow at 10% which is prudent since i assume no further synergies from the meetingzone acquisition. A Jump in product amortisation reflecting £6m development spend in 2020. Factoring in depreciation, falling finance costs etc gets me to clean pbt of £9m. I have not modelled cash flow or the quantum of debt reduction in 2020 but we can assume £11m of debt should fall significantly in 2020 and by YE2021 Loopup will be debt free and generating significant free cashflow.

[scrutable] 06/5/2020 17:29

There is always a correlation between Leads/Enquiries and Order levels,- unless the business is hopelessly unprepared ie the marketing department is untrained or incompetent. At Loop the leads are up by 400%, so they ARE probably swamped. In Loop's case, they announced the establishment of new sales pods in offices last year in 8 key USA cities, as well as in critical other centres like Hong Kong and Sydney, and have begun to cover Europe from Madrid, Berlin, and Malmo.

This looks very wise and uncannily visionary. It stretched their budget but to maximum sales aspiration and effect, and the Order levels, which perforce will have lagged Enquiries, are also destined to reach 400% unless there is a degree of incompetence or indigestion.

It is plausible, even almost certain, that revenues will follow the same 400% path, which must still be upwards.

The fact that 20 NHT Trusts have migrated to Loop at a time, albeit on ex gratia terms, when the world's journalists are possibly 90% focused on Covid related subjects means that word-of-mouth wil be particularly strong. Health care and sanitation News has gone viral everywhere and so will Loop's sales including, hopefully to , Cobra, which should not be relying on Zoom..

This board has missed the consequences following today's RNS. We can all be excited by the contents of the next RNS If the Loop management doesn't screw up Loop is on the edge of Big Time. By March next year the previous share price high of 500p will be left far behind

[thordon] 06/5/2020 12:30

Lot of profit taking today ; also over 70% is owned by Tr1

[thordon] 06/5/2020 12:29

Maddox
What was not aware of before is the NHS side , which is sensitive to information.
This company has based its growth on word and mouth with a target on advertising on Law firms as they was forced down this route due to limited funds.
Think what we are seeing is a explosion in request , it would not surprise us that theirs been internal request by the government not to use certain firms i.e Zoom as security is lacking.
It was interesting that the Government do not use Zoom in Cobra Meetings ; what product are they using.
Think we will see another RNS in as little as 4 to 5 Weeks if the trend keeps increasing clients or volume.

The 3 main elements that are worlds apart from the rest

No 1 - Security
No 2 - Audio
No 3 - Pay per minute ( No Advertising )

Invested at 52p when unloved and not sold one share ; this time in 6 months will be at least double the price.

The Debt has always hindered Loopup but it may of helped as said the direction they went

[maddox] 06/5/2020 11:30

Hi Thordon,

You would expect the 40% revenue growth figure to be well under the actual April run rate.

The revenue growth will have been ramping up over the four-month period. Covid-19 was a threat on the horizon in January, 16 March we were told to Social Distance but full Lockdown didn't commence until 23 March. Also, there will be delay in the new clients and their revenue coming on-stream.

I'm not going to attempt to estimate what the revenue increase figure is April 2020 on April 2019 - but I'm pretty sure it's North of 40%.

[thordon] 06/5/2020 09:12

Good Positive statement

30% of the growth must of been from March & April time

[kcr69] 06/5/2020 08:43

And to state the obvious, the 40% growth was Jan - Apr. Make your own mind up on the Mar - Apr portion of that alongside the revenue leading measure hints.

[tightfist] 06/5/2020 08:25

Ah, but 2021 revenue forecast required 16% growth over the two years - this morning they report growth of at least 40% - and some encouraging leading measures too..For me, WFH is here for the long haul - strong anticipation of CV spreading whilst on Public Transport? All IMO. A buy-out by a bigger fish in a few months' time is OK by me.

[sambessey] 06/5/2020 07:56

Yes exactly - 23 is still high in the current environment and I can't see them continuously trading at a premium to the wider market. Big competitors are also improving/ securing their offerings quickly.The biggest plus I see here is that it could well be a buy out target.

[bookbroker] 06/5/2020 07:51

Statement positive, but good news all in the price.

[babbler] 06/5/2020 07:51

Debt will be materially reduced by end of year. Its in the rns.

[tightfist] 06/5/2020 07:49

Based on the update indication isn't this going to smash the 2021 revenue forecast (£49.4m) a year early? - forecast PE then is 23 (Stockopedia Data). Where it goes after that is IMO the key question......

[rimau1] 06/5/2020 07:48

You are missing so much Sambessey, you can’t possibly own this stock. Zoom is irrelevant to Loopup. Any LTH’s out there?

[buywell3] 06/5/2020 07:46

Still carrying debt are they not

In 2018 the Net Tangible Asset Val PS was -23.29p according to a broker financial just checked

A Minus Number

What is the latest Net Tangible Asset Val PS

[sambessey] 06/5/2020 07:37

It is on a P/E of 50-1? (Given this will fall somewhat based on the TU) doesn't look all that undervalued to me unless I am missing something?Let's face it we are never going to see this traded on a multiple like zooms

[rimau1] 06/5/2020 07:34

Couldn’t have asked for a better trading update. I disagree with the prudent outlook - WFH is here to stay and they will experience strong trading into 2021. My problem is i have no idea of a price target, any views from LTH’s? My starting assumption is back to 2018 levels, it deserves a premium rating now?

[rimau1] 04/5/2020 13:12

Government blueprint - work from home where possible, discourage face to face meetings, virtual meetings instead

[thordon] 04/5/2020 12:42

APRIL 16, 2020
Technology
Verizon buys video conferencing company BlueJeans
US telecoms group tries on virtual meeting service for size as demand soars during lockdowns

[rimau1] 04/5/2020 09:37

Nice start to the week after inevitable profit taking. I wonder if the penny is dropping that office based work is not the new normal

[thordon] 03/5/2020 22:10

See below gives a good insight
Rob Jardine, chief marketing officer at LoopUp
Information security
Remote meetings can be the forgotten hole in a
firm’s information security. Basic dial-in
conference calls are prone to unexpected guests
listening in – often inadvertently (for example, a
meeting overruns and guests dial in for the next
call), but occasionally for malicious reasons. Web
and videoconferencing software overcomes this by
letting the host see exactly who’s on the call,
exposing unexpected guests. But in the last 12
months, security flaws have been identified with
some of the most commonly used web and
videoconferencing solutions. Users have been left
vulnerable to spying, denial of service attacks and
malware. Clients trust law firms with some of
their most confidential and commercially sensitive
data. They expect the highest standards of
information security at all times – including on
conference calls.
Absolute audio reliability
If there’s one feature that’s unnegotiable, it’s audio
reliability. Just one inaudible guest is enough to
turn a conference call into a disaster. Most web
conferencing platforms use VoIP to carry audio,
sending packets of data over the internet. Any loss
of packets leads to ‘jitter’ – where words are
jumbled or missing altogether. This is a particular
problem when users join conference calls using
home broadband over the public internet, creating
choke points as they enter a corporate network. By
contrast, remote-meeting solutions that route all
calls over regular phone lines – only using the
internet for screensharing and video – always
deliver 100% audio reliability.