Toople Share Discussion Threads

[2mex] 02/6/2019 11:28

City Chappy

Using the info provided in previous RNS releases, there is a trail which enables Retail and Wholesale customers to be estimated.

Right now, the total customer base will be around 11,500.

Projecting through the rest of the year:

Wholesale growth should regain traction in 19H2: 19H1 saw legacy wholesale removal.
19H2 should add AT LEAST 3,600 Retail customers
and add wholesale 1,400 plus an estimated 2,000 from 3.5m contract.

So FY19 combined base approx. 16,000 customers

Year end combined base approx. 19,000 customers

[chestnuts] 02/6/2019 10:06

In the past months they have issued an update between the 7th and 11th of the month so hopefully their should be update in the next week or so,

My take on the placing some company as come on the market and they are going to snap it up, or merge with it and the money is to pay for the merger.

[city chappy] 02/6/2019 09:55

Also any idea if we might see Toop SIMM cards on sale in Asda?

[city chappy] 02/6/2019 09:42

2mex, how many customers do you think they now have, including the month of May, and after they reported signing over 600 in April?

[bobdown2] 31/5/2019 21:46

Quite often the easiest part of an instalation is the customer premises. However waiting for bt must create waiting periods over which toople have no control. Häving their own engineers makes sense as customers would be given quicker service and toople to have more control over their trust pilot scores. They would probably need a contracts firm as the company is to small for a large workforce..london has the size and small business mix to make it viable to start off with.

[2mex] 31/5/2019 20:12

Tewkes, I see the advantage too. I was speaking to someone in Toople and they were looking into getting their own engineers...I think it is a bit early - but a good idea.

I like their business model: add on 30% and still undercut the incumbent.

Also, 100% agree, Andy H is highly experienced in this SME market and has a proven track record. The guy has contacts and he makes things work... his 12+ years at TalkTalk shows that.

[tewkesbury] 31/5/2019 20:03

Andy Hollingworth said in March that TOOP might get to 5% within as little as 3 years, so if anything, that suggests within 3 to 5 years is achievable. I would not tend to contradict this unless you have clear evidence based reasoning to the contrary - your mere gut feeling is not enough.

TOOP's CEO is one of the most experienced people in the sector at successfully growing business customer base from his days with Talk Talk, and knows his business plans for TOOP better than anyone else. Just let him get on with it. Growth can be organic and through acquisitions, and the extra placing cash means they can invest in both.

I also see the fact TOOP are not investing heavily in infrastructure as an advantage because it means their costs will be lower than for some others like Daisy or BT, so they can put more money into pure customer recruitment/acquisition and thus revenue generation. For a comparatively little expenditure TOOP rapidly gains critical mass and becomes a money generating machine.

[2mex] 31/5/2019 19:50

hottingup, thanks for the update.

For what its worth, here is my opinion:

I see 5% within the timescale as highly ambitious...but it is the correct approach.

Set the bar high - aim high. Strive for and find the way to maximum growth. You don't start with a business model targeting low growth!

So I appreciate Andy's ambition for Toople. Personally, I see Toople doing very well but I don't see 5% in the timescale, but imho, more like 2%.

To really inject pace for the ambitious target, Toople need to bring in big contracts... but even so, the future's bright...the future's Toople.

[hottingup] 31/5/2019 19:23

Note that Daisy also had debt which I have not accounted for in the comparator valuations (in contrast, as I did with KCOM) but if I did, the resultant share prices for TOOP would be even higher.

[hottingup] 31/5/2019 19:21

Update on the valuations I posted yesterday evening but now taking into account there will be 1.143 bn shares after the Placing (ADVFN have not yet updated their system) (Suggested MCap / No Shares = Share price):


Market Comparisons (Based on 1.143bn shares post Placing 28/5/2019)

TOOP's CEO stated (H2 2018) he aims to get at least 5% (250,000 customers) of the UK SME market within 5 years (by 2023), modified (22/3/2019 Interview) to 5% within 3 to 5 years (2021 - 2023).

-- Daisy Group had 7% (360,000 customers) of the UK SME market, plus debt, and in 2018 turned down an all cash takeover offer from a private equity company for £1.6 billion, implying:

- TOOP with 5% or 250,000 customers = 25/36 x £1.6bn = £1.11bn = 97.2p

- TOOP with 1% or 50,000 customers = 5/36 x £1.6bn = £222m = 19.4p

- TOOP with 0.5% or 25,000 customers = 2.5/36 x £1.6bn = £111m = 9.71p

- TOOP market cap increase £222m & share price rises 19.4p, for every 1% of the market it takes.




-- KCOM had 5% of the UK SME market and accepted an all cash takeover offer of £504m (33.8% premium to previous days closing price) on 24/4/2019, implying:

- TOOP with 5% or 250,000 customers = £504m, + 21.4% * = £612m = 53.54p

- TOOP with 1% or 50,000 customers = £101m, + 21.4% * = £122.4m = 10.7p

- TOOP with 0.5% or 25,000 customers = £50.5m, + 21.4% * = £61.2m = 5.35p

- TOOP market cap increase £122.4m and share price rises 10.7p, for every 1% of the market it takes.



* KCOM had £108m net debt, so if you add that to the takeover figure of £504m, KCOM's true takeover valuation was £612m, i.e. the buyer would have paid £108m (21.4%) more had there been zero debt; thus one should increase the valuations for TOOP based on KCOM as the comparitor (above) by 21.4%.


-- Daisy and KCOM figures compared to give valuation ranges (adjusted for KCOM's debt):

- TOOP with 5% or 250,000 customers = £612m to £1.11bn = 53.54p to 97.2p

- TOOP with 1% or 50,000 customers = £122.4m to £222m = 10.7p to 19.4p

- TOOP with 0.5% or 25,000 customers = £61.2m to £111m = 5.35p to 9.71p

- TOOP market cap increase £122.4m to £222m, and share price rises 10.7p to 19.4p, for every 1% of the market it takes.


-- Conclusion: TOOP share price target on 5% = 53.54p to 97.2p

[2mex] 31/5/2019 18:47

"..At present the network access provider (Openreach) is in the process of deploying “full fibre” FTTP technology to cover 3 million homes and businesses by the end of 2020 (March 2021 financial) and after that they have an ambition to reach 10 million premises by around 2025.."

"..the gradual switch from analogue phone (voice) services to an all-IP (VoIP etc.) style network, are already taking place and should complete by 2025."

Openreach are using the existing telephone poles to bring in Fibre. The Fibre drops are already being made up to the poles ready to distribute. It's happening quickly. It has already started about 5 miles away from me in a more built-up area. Within two years it will reach the outskirts here and I can then sign up for Toople280 or whatever is next...

"... the opportunity for Toople is massive. We have built Toople on the next generation platform...we are well placed to take advantage of that market." Andy Hollingworth, CEO

[2mex] 31/5/2019 18:22

There will be more of these contracts up for grabs:

Toople: "these (two) retail estates are migrating from traditional services to fibre broadband and Voice over Internet Protocol ("VoIP") telephony.."



"..This contract win demonstrates that Toople is excellently placed to take advantage of the opportunities created by BT's migration from legacy products to new technologies. From the launch of Toople, all the Company's propositions have been built on next generation technology and have been future proofed to take advantage of the BT migration and to ensure that Toople is well placed.." Andy Hollingworth, 23 Aug 2018

[2mex] 31/5/2019 18:15

Toople are making strong progress with Retail with month after month record sales.

Legacy, low margin wholesale has been pared back and replaced by better margin partners.

Potentially Toople's margins are being optimised as a manoeuvre to sell(?).

..but if not, I would like to see more contracts. It's time Andy H pulled in more big wholesale contracts.


The £3.5m contract was with a customer Andy Hollingworth has known for 15 years. They were fed up with BT and so moved to Toople.

There has never been a better time for a company like Toople to disrupt the market with BT legacy copper products such as standard PSTN lines and ISDN circuits due to close down service by 2025.

Large estate migrations will be planned well in advance of 2025 - large contracts will be out for tender. Naturally, the estate transitions would not be left until the last month before switch over. Large transitions would need to be phased in - and the later it is left, the harder it will be to resource on time.
- and especially when you consider that the whole of Britain will be switching over, not just businesses.

[top tips] 31/5/2019 09:34

Keep buying people. You have to be in it to win it.

[bobdown2] 31/5/2019 08:02

The lag factor...revenues lagging initial outlay. The record business signed and the upfront costs v.s future revenues is what will bring cash flow positive. Cash flow positive reduces risk and is a major stepping stone for a growing company. The share price will rise ahead of this development and will reflect the companies improvement. Increased customer numbers will also be recognised but not as forward looking as some would like...the growth seems exceptionally strong and the share price behind the curve...

[azuli] 30/5/2019 23:53

Agreed, mega-ramping about 100-bagging by comparing customer numbers against different companies in different circumstances as if customer numbers is the sole valuation factor does none of us or TOOP any favours. I'll be delighted to see TOOP get to 0.8p and back in line with its original IPO listing valuation of circa £8m first and foremost before dreaming of anything blue sky beyond that. Top Tips popped up on a KOOV thread yesterday bragging about being 20% up on his/her buy on Monday. Errr...last time i checked, Monday was a bank holiday and the market was closed. TT later realised this and edited said comment to say last week rather than Monday. Lolz.

[volsung] 30/5/2019 23:35

D’ya know top tips used to gulder on about IMM reaching £150 per share. Amazin innit

[lukehold] 30/5/2019 23:33

Let's go with about £264 pa and the current user figures so £1.8m turnover

[volsung] 30/5/2019 23:30

D’ys know. Every farkin share that farkin tt has been involved in farkin croaks. Dunno why.. its a a farkin mystery to me mate

[hottingup] 30/5/2019 23:06

Daisy also had debt, which I have not accounted for, so valuations for TOOP using Daisy as a comparator should actually be higher, i.e. produce an even higher value for TOOP if incorporated.

[hottingup] 30/5/2019 23:05

A few recalculations and simplifications after reading tewk's comments earlier:


Market Comparisons

TOOP's CEO stated (H2 2018) he aims to get at least 5% (250,000 customers) of the UK SME market within 5 years (by 2023), modified (22/3/2019 Interview) to 5% within 3 to 5 years (2021 - 2023).

-- Daisy Group had 7% (360,000 customers) of the UK SME market, plus debt, and in 2018 turned down an all cash takeover offer from a private equity company for £1.6 billion, implying:

- TOOP with 5% or 250,000 customers = 25/36 x £1.6bn = £1.11bn = 113p

- TOOP with 1% or 50,000 customers = 5/36 x £1.6bn = £222m = 22.6p

- TOOP with 0.5% or 25,000 customers = 2.5/36 x £1.6bn = £111m = 11.3p

- TOOP market cap increase £222m & share price rises 22.5p, for every 1% of the market it takes.




-- KCOM had 5% of the UK SME market and accepted an all cash takeover offer of £504m (33.8% premium to previous days closing price) on 24/4/2019, implying:

- TOOP with 5% or 250,000 customers = £504m, + 21.4% * = £612m = 62.5p

- TOOP with 1% or 50,000 customers = £101m, + 21.4% * = £122.4m = 12.5p

- TOOP with 0.5% or 25,000 customers = £50.5m, + 21.4% * = £61.2m = 6.25p

- TOOP market cap increase £122.4m and share price rises 12.5p, for every 1% of the market it takes.



* KCOM had £108m net debt, so if you add that to the takeover figure of £504m, KCOM's true takeover valuation was £612m, i.e. the buyer would have paid £108m (21.4%) more had there been zero debt; thus one should increase the valuations for TOOP based on KCOM as the comparitor (above) by 21.4%.


-- Combining Daisy and KCOM comparators to give ranges (adjusted for KCOM's debt):

- TOOP with 5% or 250,000 customers = £612m to £1.11bn = 62.5p to 113p

- TOOP with 1% or 50,000 customers = £122.4m to £222m = 12.5p to 22.6p

- TOOP with 0.5% or 25,000 customers = £61.2m to £111m = 6.25p to 11.3p

- TOOP market cap increase £122.4m to £222m, and share price rises 12.5p to 22.6p, for every 1% of the market it takes.


-- Conclusion: TOOP share price target on 5% = 62.5p to 113p

[bobdown2] 30/5/2019 22:01

Agreed. The recent increase in trust pilot scores show the ease with which merlin makes the customer switch. All the wholesale side also use the merlin platform. And the recent use of the Uswitch will attract customers who want ease of change. The focus on the customer experience is paying dividends as record numbers of reviews are appearing on the trust pilot site. Over trebled this month. The trust pilot scores sit firmly in line with the record monthly busines that started last October. The funding will help with the upfront costs of the business being generated. Fwiw..the short term focus should be revenue build up and trying to spot cash flow positive...