Toople Share Discussion Threads

[bobdown2] 23/4/2019 09:32

There will be an inflexion point where the record business comes on stream and lowers the costs. This visibility will raise the share price as cash flow positive gets closer. At the moment I think the concerns are overdone and the record business ignored. I am trying to get some funds before the results. And as always I read and listen to the ceo and he is very bullish.. And so are most on here...the figures that have been provided here are very promising.

[ff2345] 23/4/2019 09:25

Current share price is to be expected. There have been too many instances of companies stating how well they are doing and the numbers, when they come out, not reflecting those bullish statements. Once bitten.....

My 2 points on this are:
- those with the required maths skills can easily forecast the forward numbers based upon the recurring revenue model. They will be excited by the potential. The canny ones will wait for the correct psychological moment to invest
- if the numbers are good then a re-rate has to be on the cards.

[78steve] 23/4/2019 09:20

Did they not have the cost of new internal sales team in last years accounts i.e where they reported as part of admin cost of 1.3m or so sorry dont know exact number? Just wondering what other significant costs to expect in interims that's not yet reported as i believe market is probably scared thinking theres big costs yet to report to knock off the record sales.

[bobdown2] 23/4/2019 09:14

Interims are early May...maybe next week. So wakey wakey...there's six months of record business that is not in the price.

[bobdown2] 23/4/2019 09:09

I cannot believe how fickle the market has become. It seems ages since Justin Waite said.....at theses levels nothing is priced in..and we are still at those levels...so it looks like we are waiting to see what is happening on the costs front. On good results maybe Everyman and his dog will jump onboard.

[warrenfingerfood] 23/4/2019 08:06

I think if we got a £500,000 contract or less even, it would be shouted about. Knowing our target customers I don’t think there will be many large contracts around.
How do you eat an Elephant? .........one bite at a time.

[azuli] 23/4/2019 00:18

I wonder how many of TOOP's new customer wins in recent times are of a value close to the £3.5m contract they announced last August? Is anyone familiar with regulatory law around which levels of new business wins are required to be individually announced via RNS, such as said £3.5m contract, versus only updating on net contract wins every 6 months at the interims and full year results, irrespective of the financial value of said contract wins? Just wondering if they chose to announce that particular contract win individually to boost the shareprice in order to enable last September's placing. Have they possibly been winning similar high-value contracts since then not individually announced?

[2mex] 22/4/2019 11:40

Hi Chestnuts from a chartist point of view there are 2 gaps to fill 0.45-0.75p and 2.5-3.25p.

I think ff2345 has it right. A 19H1 interim revenue of £1.3m would be what the market wants before re-rate. That would be acknowledgement of maintained exponential growth.

£1.1m is baseline. £1.2m is comfortable. £1.3m is great.

I have mentioned in the past Sosandar. Sos are not fully funded but they have shown exponential growth. It is a different sector but shows that the market has attributed value to "exponential growth".

Parity for Toople is approx 3.25p which by coincidence closes the second gap.

[chestnuts] 22/4/2019 11:10

2mex

Thanks for all your work on this thread its got to be one of the best threads for information on any share i have come across, this could also be because of the company updating nearly every month

Any guess on price if the company is doing as well as they say they are ?????

On a charting point i think it could reach 3.88p if the numbers are good.

[2mex] 22/4/2019 10:07

Cheers queenwood

Re: the Utility Switching Company Contract 25 June 2018

The switching company is an Energy Supplier to 35,000 SMEs.

"...Toople will gain access to the new partner's sales team and anticipates generating a significant number of orders..."

"...Following set up, training and implantation of Toople's Merlin provisioning platform,
services are expected to be live within their own in-house sales team from the first week in August.
All new customers coming through the channel will contract with Toople directly.

So,
(1) the revenue will have only started building at the end of 18H2 and will have been on stream throughout 19H1.
(2) a "significant number of orders" are expected
(3) all new customers will contract with Toople directly

[queenwood] 22/4/2019 09:03

Great research and estimates 2mex thanks

[2mex] 21/4/2019 20:43

Note on that SE Reseller:

(1) The contract RNS release was dated 23 Aug 2018. It will be new for the 19H1. Would barely have touched the 18H2 balance sheet.

(2) The contract is for 2 of the reseller's customers. How many more high street retail customers does that reseller have?

"....a new contract with a South East based reseller to provide next generation broadband and cloud based telephony services specifically for two of the reseller's national high street retail customers..."

[2mex] 21/4/2019 19:29

The "SE Reseller multi sites high street" contract looks significant.

It is a migration of 2 high street nationals. Consider some high street national branch numbers:
Boots 2500 branches
WHSmith 1600 branches
Poundland 500 branches
Clinton Cards 360 branches
Next 500 branches
Monsoon and Accessorize 1400 branches
Toolstation 300 branches
Wilko 413 branches
etc

Basis of Toople 19H1 revenue estimate calculations

I have used "300 branches" each for the 2 national retailers in the "Low" estimate
I have used "400 branches" each for the 2 national retailers in the "Medium" estimate

Just as an example, 2 x 300 x £500pa => £300,000 revenue

It could be substantially more but I am being conservative.
For example 2 x 1000 x £500pa => £1,000,000 revenue

I also applied very conservative valuations for the "9 partners signed" revenue.
For Low estimate: 2 customers acquired per week for each partner
For Medium estimate: 3 customers acquired per week for each partner

I also considered that 40 partners were signed up "under-the-radar" over 6 months but calculations were based on an average of 20 partners and used the "2" & "3" customers per week model above for Low and Medium.

I have tightened my 19H1 revenue estimates to (Low estimate) £1.2m to (Medium estimate) £1.4m

The "Low estimate" of £1.2m would be a good outcome as it is comfortably above the £1.1m baseline.

I have not included a "high" estimate. I believe it is better to under-estimate and the above results are as true an interpretation as I can give being conservative.

The above estimates also had just over 5% removed for customers loss.

I have also reviewed margin again.
Wholesale margin would be 8% while it is still in the process of transitioning to 10%+
For Retail, customer acquisition costs have reduced "materially" so I have increased FY18's 21.7% by approx x1.1 to get the retail margin for 19H1.
I get an overall gross margin of 15%+. With focus on hosted revenue there is potential for uplift.

At 19H1 a 5000 Retail customers base would be good.

[2mex] 20/4/2019 23:26

There are several "expected significants" for wholesale from late 2018 onwards.

The two 5th July18 contracts:
The energy company that will now combine dual fuel + Toople broadband / telephony for its business customers.
The Technology company whose customers showed increasing demand for telecoms solutions which will now be served by Toople.
The SE based reseller etc.

..but also in H1 there may have been 50+ partners signed up. The requirement for a partner can be an individual/team with relevant selling experience or an individual/team with a database of customers to sell to. Toople have indicated that they look for quality in partners.

The power of partners may have been overlooked. As shown in the example in the header of this thread, partners can have a big cumulative effect on revenue. Partners are being signed up and each one will be adding to the revenue.

[2mex] 20/4/2019 23:07

As far as near term future is concerned we know that 400 telephony customers have already been migrated to Toople on the £3.5m contract.

That started in March so we will see full hit from that 400 on the H2 balance sheet.

That was the first 2 batches of 200 transferred. I would expect more migration to follow shortly after. The initial phase of the contract was for migration of the wholesalers telephony estate.

The contract was valued at AT LEAST £3.5 million. The wholesaler said that they would also be looking to white label Toople broadband into the telephony customers.

So H1 will show 2018 wholesale contract revenue starting. H2 will show £3.5m contract starting.

[2mex] 20/4/2019 15:59

ff, that's a good summary

For H1 I am looking for:
Revenue minimum £1.1m(baseline)...but potentially up to £1.4m.
Overall gross margin minimum 14.5% but could be 15-16%
Approx 5000 Retail customers (If they give a statement on that)

I would also like some news on wholesale but good revenue will do. It is worth considering that confidentiality is important. As long as revenue is there we don't need to know the exact source.

[ff2345] 20/4/2019 15:03

The forthcoming interims will be pivotal for the share price going forward.

If the results are not up to expectations then management will be completely discredited due to their statements about how the business is going, made over the last 6 months.

So what t/over and GP% is going to be acceptable? To my mind £1.1m t/over is the very lowest that they could get away with, with a GP% of 15%. That would keep me invested, but I fear the market will be looking for £1.2m+ for the share price to remain where it is, and £1.3m for a rerate.

I do not think any management statements with regard to the future will cut the mustard if the actual figures are below par.

I await with a mixture of excitement and trepidation!!!!

[bobdown2] 20/4/2019 11:47

On the last placing...the ceo had to have a discounted placing. Two shares for every one. If he needs to do another funding then he has major problems with the value of his own shareholding. His statement of no further funding until cash flow positive sits in with his share position and that he is not taking proper wages yet because he wants to benefit from a rising share price. Also..whilst we have another thread with one idiot with at least six fake identities I am not suprised that the topic has switched from record business to placing scaremongering. Over there it is different name..but the same person and the same placing scaremongering...funding is not a problem...the other thread is....the night of the green ticks exposed that problem. With about eight fake I.d.s it is almost a certainty you are posting to a fake name...filter that thread and funding problems will virtually disappear.

[azuli] 20/4/2019 11:47

You pays yer money and you takes yer chances. We can only go on what we're told officially via RNS etc. and make a judgement call on wider macro factors on top of that, such as company history, management track record, the feel or vibe you get from interviews with the CEO/officers of the company etc. etc. Officially via RNS we're told cash is in line with management expectations, and in interviews/podcasts on the back of that the CEO is quoted more than once now saying the board believes the business is fully funded through to cash generation, and that they are not in the market looking or needing to raise any funds at all. Pretty clear wording to me.

Now, i've been around the stockmarket long enough and seen enough lies and u-turns and assorted scandals over the years to know not to place absolute trust in any company or the officers of said same, there's always a degree of wriggle room around the wording of announcements, and if they wait long enough they can always say business circumstances have changed since previous announcements and fresh funding is now required for unforeseen circumstances XYZ. Blah de blah. None of us can say with absolute certainty either way, but as i say you pays yer money and takes yer chances, and i remain long on TOOP, looking forward to the interims and beyond. GLA.

[2mex] 20/4/2019 11:30

Andy Hollingworth volunteered to take only half his offered salary (stating that the rest would not be clawed back in future).
I see that as evidence of integrity.

Andy has made a personal commitment to Toople.

In some companies, you see directors with their snouts in the trough.
..but not here. Andy has bucked the trend. It's what I would want to see from someone who controls the finances.

[chestnuts] 20/4/2019 11:09

Bob
The statement about funding as the company said it before and then had a placing or right issue

[bobdown2] 20/4/2019 10:47

We are absolutely not needing to raise funds.. enjoy the growth and cash balances and then worry when there is actually a problem..

[bobdown2] 20/4/2019 10:44

It's all about revenues outpacing the costs of the increasing growth. I prefer to focus on the positive aspects because if you do not trust the management then you should not be invested here. Results soon should make things clearer.

[78steve] 20/4/2019 10:01

If people will be held accountable for any promises made and penalties paid for failing then i can see words having truth behind them. Appreciate this isn't Aim but seen it time and time where theres no accountibilty regarding funding promises.

[amt] 19/4/2019 22:42

Let's hope that's not like "We will definitely leave the EU on 29 March. Oh hang on I meant 22nd April oh that's May" by the wayin all senses of the word. Brexit means Brexit.

No funds required means no funds required.
That's the main reason I took the plunge here so absolutely relying on that statement.