Toople Share Discussion Threads

[marmiesz] 19/5/2019 11:17

There is clearly a disconnect between the progress, customers acquired, revenue stream and the current market cap. I can only put this down to concerns over a fund raising that may be needed in the next 6 months. Everything else is going very well. If we do need to raise funds so be it, though I would prefer this to be at a premium to the current price.Regards,Marmie

[2mex] 19/5/2019 11:10

I have now re-evaluated my estimates for customer base size to include the 3.5m contract. I had originally only allowed for 1,400 wholesale customers from the rest of the partners/contracts during 19H2.


In 19H1 legacy wholesale has been terminated and replaced by new incoming partners and contracts. A lot of legacy has now gone - a lot because even with the new partners and contracts, wholesale treaded water. With legacy mostly gone wholesale growth should regain traction as the better margin partners kick-in (with more added continuously).

I calculate FY18 as 2,500 retail. Wholesale/retail ratio was 60/40 so at FY18 combined base would have been approx 6,250.

19H1 Wholesale has treaded water as old legacy base has been replaced by new partners customer base. So I will add just retail:
Oct18 425
Nov18 455
Dec18 450
Jan19 500
Feb19 500
Mar19 550 … 6 months total 2,880

19H1 combined base 9,130

Wholesale growth should regain traction in 19H2.
19H2 added retail 3,600 and added wholesale 1,400 + 2,000 (3.5m contract)
So FY19 combined base approx. 16,000

year end combined base approx. 19,000

[2mex] 19/5/2019 10:59

Re: £3.5m contract

"During the initial months of the contract, the wholesale partner will migrate its current hosted telephony estate over to Toople's proprietary platform, as well as white labelling Toople's broadband propositions and marketing them to existing and new customers."

On 22 March, Andy H made reference that already 400 customers had been booked in from the telephony estate migration. The "second batch of 200" was being added to billing list over the weekend 23/24th March. That's 400 customers in March.

..the migration being done "during the initial months". The wholesale customer will also white label Toople broadband but I see the bulk of revenue being from the telephony estate and estimate 75% (~£2.7m):
If average customer has Toople 3 phone deal (£42 per month) then the estate size would be approximately 2,000 customers allowing for accretive build up. That points to 2,000 extra wholesale customers added during 19H2.

[hottingup] 19/5/2019 10:47

Daisy turned down an offer last year from Bain Capital of £1.6 billion, including debt, in favour of £1 billion refinancing from Ares.

Daisy only had 360,000 customers!

[2mex] 19/5/2019 10:04

Bob I understand it the same. Up front costs 40 to 90 pounds. That's acquisition cost. Early days it was nearer 90 pounds. The cost reduced materially in October 2018 ie. at the start of 19H1.

So, each Toople acquisition cost was lower..but overall cost went up because of the large inflow of customers. Toople retail customer base has expanded - a much larger customer base is in place creating high-end margin.

Overall gross margin is now 19% which is very attractive to a buyer looking to add a large chunk of SME customers to their collection. The buyer would centralise admin to reduce costs.

[city chappy] 19/5/2019 08:57

Don't stress too much. As long as they keep signing customers, they will become an attractive takeover target. That is the the ultimate management objective.

[bobdown2] 19/5/2019 08:51

My original expectations were long term. Comments made on here about the CEOs change of tact look spot on. Kcom looks to have changed the landscape. It's all about growing numbers as fast as posible. I wonder what may is looking like. There is no odds on May being another record month. Figures to go with any update in future would be appreciated. !!!

[city chappy] 19/5/2019 08:47

The margin depends on how the contract is booked. Highest margin is direct with Toople. Lowest margin will be via uswitch or another affiliate.

[bobdown2] 19/5/2019 08:43

I think I read somewhere that a contract that is worth 250 a year has 90 pounds worth of upfront costs before it turns into revenues. Now since October we have had three of the record months that have turned into payments with January about to follow. The 3.5 million contract is an unknown but might be kicking in. I think the visibility of the customer grab and the ability to see the revenues starting to flow through are both very important for any issues concerning funding of the growth or possible company sale

[mam fach] 19/5/2019 08:42

Pity there's been a pump and dump exercise up to results.
Done long term holders no favours.
Hoping this week will bring some stability to share price.
Looks like closing price Friday is now new base.
IMHO.

[tewkesbury] 19/5/2019 08:24

Anything is possible. Daisy were pitched at £1.5 billion with only 360,000 direct and indirect customers according to the FT. That's £4166 per customer. So multiply £4166 by the number of customers Toop could have now or in 12 months for a takeout value of Toop. On that basis for Toop, even just adding 600 new direct customers last month, as mentioned in the Interim Results, added another £2.49m value to Toop.

[fatnacker] 19/5/2019 08:16

Add a portion of the £3.6 partner contract (which is now active) to the top line and you can stretch the cash concern to year end at least.

[ff2345] 19/5/2019 07:54

fatback
I agree with you. The Interims contained a shift away from the focus on becoming cash flow positive to delivering their marketing strategy. In other words, client numbers matter more than cash generation. I guess that this is aimed at increasing their value in the event of a takeover.
Cash should last to Sept at least, so timings with Daisy on the prowl could be critical.
We also need to consider the personal objectives of AH. He has 28.5m shares. I doubt he would be prepared to let these go at a price that gives him less than £1m probably more. So a target for AH mat be around 5p per share, giving him £1.4m. Is this possible in a short time frame??

[fatnacker] 19/5/2019 06:37

I would have another look if I was you, £2.2million (before expenses) 6 months ago result of which is circa 150% revenue increase meaning as this rate of growth continues the cost of customer acquisitions declines (see the Interims) which means at some point income will outperform expenditure, basic stuff, we don't have enough information to predict with certainty when that is precisely but we've got a further 6 months at least until cash is potentially an issue and that's assuming no more customers with the spend maintained which isn't going to happen, in 6 months toop could have a 1% market share growing exponentially, I'm betting on an offer for the company possibly within that period or at least a sniff of one, huge multi bag opportunity at this price.

[bobdown2] 18/5/2019 18:50

Chestnuts. Nice feedback...you can see why the uptake of services has increased.

[chestnuts] 18/5/2019 18:39

Bob

I thought the slowness of my lap top was just that it was 3 yrs old but now its just amazing i cant believe how good it is and its 25% cheaper. Its so good i tell all my relatives and friends, and 2 of them are just about out of their contracts and will be joining Toople.

[bobdown2] 18/5/2019 18:00

2mex...I understand that...you probably get faster speed at the lower cost..courtesy of now having fibre to the cab and a new contract. Makes sense for lots of others as well.

[2mex] 18/5/2019 17:56

Bob, the service I previously had was full copper. The ideal replacement would have been full fibre to the door. Most people can't get fftd because the road doesn't have fibre installed. The next best thing is fibre to the cabinet. I then receive from cabinet to door over copper. Its a hybrid and a good solution until fibre is rolled out in the area. My old system was running at 5mbps. I could have upgraded to 80mbps but it would be over the top for my needs. 40mbps will be great.

[pjackson2] 18/5/2019 17:45

Don’t know anything about these
so no view but raised 2.2 mill
not long ago and now got 1.1 mill
left. That’s gone quick.
Posters suggesting placing
look to be right. IMO of course

[bobdown2] 18/5/2019 17:40

2mex. If the feed to your property does not change and you get increased broadband speed then surely there is an amplifier somewhere. It will be interesting to find out how toople manage it.

[2mex] 18/5/2019 17:19

chestnuts, I am away until Tuesday. Go live for my account was Friday 17th. I will update on it when I am back.

Last week I checked my Post Office download speed which was copper broadband. The speed should be 7mbps where I am for that Post Office service but I was getting about 5mbps.

I signed up for Toople's 40mbps fibre deal and I am looking forward to using it.

At the time, the Post Office service was a good deal but I recently discovered that I was paying a lot more. With calls included, I will be saving about 25% AND going from copper 5mbps up to fibre 40mbps. 8 times faster AND a 25% saving!

[queenwood] 18/5/2019 13:03

50p a share I’d be in heaven

[hottingup] 18/5/2019 11:24

Azulu that's amazing. Daisey were expected to sell for more that £1.5 billion, and only had 360,000 customers. That more than doubles my previous comparator value for Toop against Daisey, as Daisey were worth £0.5 billion (50%) more than I thought but had only half the market share that I thought.