LoopUp Group PLC – Preliminary results

LoopUp Group plc (AIM: LOOP), the premium remote meetings company, today announces its unaudited preliminary results for the year ended 31 December 2018.

The results demonstrate transformational growth for the Group, driven by both the acquisition of MeetingZone in June 2018 and our organic LoopUp growth engine. The maintenance of strong organic unit economics, combined with a successful proof-of-concept programme to accelerate recruitment into our proven new business pods, now lead the Group to announce additional investment out of its increasingly cash-generative operations to accelerate future growth.

Financial Highlights

1.    Earnings before interest, taxation, depreciation and amortisation, adjusted to exclude non-recurring transaction costs, exceptional reorganisation costs and share-based payment charges
2.    Adjusted to exclude non-recurring transaction costs, exceptional reorganisation costs, amortisation of acquired intangibles and share-based payment charges

• Adjusted diluted EPS² grew by 111% to 9.3 pence in FY2018 (FY2017: 4.4 pence), well ahead of market expectations.
• Adjusted operating profit² grew by 521% to £4.5 million in FY2018 (FY2017: £0.7 million), and adjusted EBITDA² grew by 121% to £7.7 million in FY2018 (FY2017: £3.5 million).
• Group revenue increased by 96% to £34.2 million in FY2018 (FY2017: £17.5 million).
• The Group ended the year with cash of £5.6 million and net debt of £10.6 million.

Operating Highlights

• On 4 June 2018, the Group completed the acquisition of MeetingZone, which is now fully integrated into a unified Group organisational structure with annualised cost synergies materially above the £3 million announced at the time of acquisition.
• The project to transition MeetingZone’s audio conferencing business over to the LoopUp platform has progressed positively and the Group expects a successful overall transition to be completed by Summer 2019.
• The Group has maintained its track record of ‘negative net churn’ – i.e. net growth – in its long-term established customer base, driven by continued strong end user engagement with differentiated capabilities of the LoopUp product.
• The unit economics of our seven UK and US team-based ‘pods’ for new business acquisition have remained highly efficient during FY2018, returning £0.73 of Year 1 gross margin for every pound invested (FY2017: £0.75).
• The Group entered the Australian market in March 2018 and has won 55 new customers to date in the region.
• The Group operated at a total of approximately 7.5 quota-effective pods during the year (7 in the UK/US and 0.5 in Australia), below the expected level of 11. This was partly due to necessary pipeline build in Australia and partly due to the Group’s decision not to migrate any MeetingZone sales staff over to LoopUp pods during the period. This resulted in constant currency organic LoopUp revenue growth of approximately 20% in the period (FY15-FY17 average: 32%).

Post Period Highlights

• The Group has closed a material contract renewal with leading global law firm, Clifford Chance for a minimum contract value of £2.34 million in aggregate over its 3-year term.
• To boost its number of pods for FY2019, the Group has successfully completed its inaugural ‘Pod Academy’ programme, bringing 14 career change recruits into more senior sales and account executive pod roles.
• Our Pod Academy graduates have been joined by 30 new Business Development Associates, recruited through the Group’s established graduate recruitment program.
• In line with the above expanded Pods, in February 2019, the Group opened new offices in Chicago, Dallas, Los Angeles, Atlanta and Madrid, employing 32 people in aggregate.
• Following the success of Pod Academy, the Group now plans to invest an additional £2.0 million out of its increasingly cash-generative operations in the faster expansion of pods, bringing the total number of quota-effective pods back on track with prior expectations by the end of FY2019 and ahead of prior expectations from FY2020 onwards.

Steve Flavell and Michael Hughes, co-CEOs of LoopUp Group, commented, 

“We’re delighted to announce strong results at the end of a busy, exciting and transformational year for the Group. MeetingZone is now bedded in organisationally, with greater cost savings delivered than envisaged at the time of acquisition and the transition to the LoopUp platform progressing positively. 

Our core business metrics all remain strong: further improved end user engagement with the LoopUp product; continued net revenue growth in our long-term established customer base; and continued efficient return on investment metrics from our new business pods. 

We’re incredibly excited by the success and potential of our new Pod Academy programme. Pod Academy now provides a more dynamic lever to expand our established and consistently-efficient pods structure, and we’re excited to announce additional investment into this programme to drive future growth.

We continue to see strong demand for the LoopUp product from our target market of mid-large enterprises and professional services firms. We’ve started 2019 with healthy pipelines and we’re confident in our ability to deliver continued strong growth.”

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