Toople Share Discussion Threads

[azuli] 20/5/2019 11:49

Nice. Hopefully the start of a gentler, sustained uptrend and rerate here as investors begin to take an interest in the developing growth story here.

[mam fach] 20/5/2019 11:49

No one is selling as they know they are on to a winner.
Shameful how price fell last week.
Well done if you had the confidence to hold.
Not easy. GLA LTH's.

[bobdown2] 20/5/2019 11:33

Ups a daisy...

[bobdown2] 20/5/2019 11:10

Good start to today.....now right on the top of the offer after a 0.2p rise on the bid. LTH.s are starting to get rewarded for their patience....

[mr.oz] 20/5/2019 07:23

Agreed. Needs regular news on growth development. Thanks

[tewkesbury] 20/5/2019 00:52

Toop's margins are better now.

[2mex] 19/5/2019 22:24

18,000 RGU's would equate to approximately 12,000-14,000 customers. The margins Hybridan used were higher but the acquisition costs were probably also higher than present cost.

So, the Hybridan estimate for break even customer base would be 20,000 to 22,000 customers.

[2mex] 19/5/2019 21:25

In post 2685, I provided my estimates for projected customer base size. Thing to bear in mind is that with "foot of the gas" ie. Toople at a critical moment stopped customer acquisition through retail then costs would immediately drop off.

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19H1 Wholesale has treaded water as old legacy base has been replaced by new partners customer base.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 in 19H1:
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 21:19

mr.oz, customer base above has been used for valuation. Customers base can also be used to estimate break even.

Customers can receive Telephony, Broadband and/or mobile.

Each service has different margin: hosted telephony is best.

Below is a reference document which will give you more insight to make a more informed decision on what customer base size would provide break even revenue.

As I suggested in an earlier post, there is a sliding scale for point of inflection definition. Cash flow positive would be sufficient revenue generating cash to sustain working capital and growth. The lower point of inflection is where Cash flow positive would be sufficient revenue generating cash to sustain working capital but with a low amount for growth - way forward from that being wholesale and partners.

On 24 April 2017, Hybridan estimated that if Toople acquired 500 rgu's per month, they would break even after 3 years. So, they are saying:
(36months x 500) => an 18,000 RGU's is the point of positive cash generation.
They allowed for a revenue margin split across broadband, mobile and Hosted telephony.

If Hybridan are estimating an ~18,000 RGU's as the "target" for cash positive then Toople would achieve that by end of FY19.

Here is the Hybridan document (if not already seen):

[bobdown2] 19/5/2019 21:17

Nice to be able to see some of the growth for the second half of the year already. A record april. A two year contract that has nearly reached its projected price in one year. That's where the extra percentages will come from alongside a 3.5m contract that has nothing in the share price yet. And the incremental payments from the earlier record months will soon be joining in. The headline extra costs and an ebitda that reflects the extra advertising costs was always going to distort the results. But there is a good case now for saying there is over 300k,s business and revenues appearing on a monthly basis. Investors will buy into that sort of growth.

[mr.oz] 19/5/2019 20:51

And what number of customers is approx break even / profitable business

[2mex] 19/5/2019 20:47

Ben, on valuation using customer base size:

Kcom has approx. 250,000 SME customers AND net debt of £108million. Kcom agreed a takeover for £504 million.

So that's 250,000 customers => £504 million...

11 months ago Daisy were going to buy 80,000 business customers from TalkTalk for £175million.

The deal didn't go through. Since then Daisy has recently re-financed with a £1 billion cash pile.

They intend to make acquisitions. The TalkTalk deal didn't happen and that means they will want to accelerate to get back on the growth track intended last year.

So that's 80,000 customers => £175 million...

You could compare value to customer base size using Kcom, Daisy or TalkTalk.

Using TalkTalk "80,000" deal valuation here are derived prices for Toople

10,000 customers => £22 million...Toople share price 2.3p
20,000 customers => £44 million...Toople share price 4.6p
etc...

Using Kcom or Daisy produces higher results.

[parob] 19/5/2019 19:38

We should not be at this price! The market cap is way too cheap!!!Hopefully we will see some more large contract wins RNS over the next few weeks and months to inject some new blood.O/T guys, might be worth keeping an eye on OPTI this coming week – deal after deal has been announced over the last 6 months but the price has slowly dripped down. The chart is now on the verge of breaking out and the move could be powerful once it does as its been consolidating for so long. Coiled spring springs to mind. At least add to your watchlist. DYOR etc if you do take a look. I think Bob holds some shares too.

[bobdown2] 19/5/2019 18:46

180k of additional revenue from one supplier would do away with any additional losses. In one statement was...there would be no additional marketing costs. And the losses had increased by around a 150k so one customer stops any additional losses. I do not think this is all about customer grab only..we might not be able to see the size of revenues yet. The 3.5m minimum contract could also suprise to the upside. Those cleverer than us may be able to start factoring in some of these contracts with higher figures. Funding might not be an issue. Pun intended.

[bobdown2] 19/5/2019 18:13

Yep a posible 180k added onto this figure for the finals in December. Roughly 450k of revenue from one supplier. The effects of the 3.5m contract will start to kick in before the year end and it should suprise to the upside as everything apart from the old wholesale legacy is going from strength to strength. Maybe this is why the ceo seemed to change direction. If you read through all parts of the Rns statement then confidence about the present and future is made clear. Over the coming months tooples strategy should show through....fast track to a bigger company.. Read all of the Rns statement...lots in there.

[2mex] 19/5/2019 17:24

In the report 22 March 2019:

"Toople said its gross profit continued to improve 'substantially' after it signed up new customers in December and January"

To me looks like the legacy wholesale was removed during December and January. That would certainly have caused a step change in margin.

So wholesale did well to maintain revenue with only a slight reduction. Going forward the strength of the contracts will show.

[2mex] 19/5/2019 17:13

Bob, it does look like that telecoms provider:

"..The contract is expected to be worth at least GBP360,000 over the contract period.."

..and that £277K has been built up to reach that point. There is momentum in it so 2 years could produce £600K.

There is a lot of wholesale progress masked by the 19H1 reduction in legacy wholesale. The contracts including the above 360K one will have gained momentum and revenue will really kick in through 19H2. With legacy now out of the way, it will be boot down on the accelerator for wholesale progress.

[bobdown2] 19/5/2019 16:49

21.05.2018. An Rns about a South East based telecom supplier. The figure given for a 24 month period was an expected £360,000. Irony...if the £277,309 figure is the same supplier then the £360,000 will be reached shortly and exceed expectations by a mile...because we are only halfway through the two year period !!. And it will help to calculate numbers going forward.

[bobdown2] 19/5/2019 16:21

A touch more visibility ?. From the notes to the consolidated interim report: section 4: business segment....one customer is responsible for £277,309 worth of business. Looks to be telephony services. A previous Rns will highlight who this posible customer is and driving a valuable part of the business.

[2mex] 19/5/2019 15:15

Toople have had already stated their aim to be disruptive in an industry dominated by old legacy providers.

In the interims, Andy H mentioned

"a well-known tier one UK provider has recently started using Toople as the number one comparator against which they market their products.....a clear indicator of how far we have come in a short space of time"

He then went on to say

"There continues to be consolidation in our sector....Over time we believe we will have a role to play in this M&A activity."

It is the first time Andy has hinted at Toople potentially being bought out. Things are happening here (in a short space of time).

[bobdown2] 19/5/2019 12:56

On the ball 2mex..nice

[2mex] 19/5/2019 12:52

User created yesterday. Same message posted on 28 threads. Nothing else posted.