In a statement released today ahead of its AGM this morning, Toople (TOOP ) said it has seen positive trading during both 1Q and 2Q of the current financial year, ‘as the business executes on its strategy of achieving higher revenues with strong margins and stable cash generation.’
During 1Q, overall demand for services remained strong and correspondingly when compared to 4Q of 2021, revenues have risen by 9%, in line with management expectations, it detailed.
Richard Horsman, Chairman of Toope said this has translated into a growth in gross profit of 17% and an improvement in EBITDA of 19% from FY21 4Q to FY22 1Q and that momentum has carried on into 2Q of the current financial year, with orders particularly strong in March.
As a result,Toople said it has seen a material increase in its high bandwidth leased line orders which have “significantly higher values and greater margins” than its core broadband orders.
“This is significant,” it said, “as it gives better visibility on revenue “given that 50% of the initial revenue consideration is received upfront and 50% paid on customer installation completion.”
Horsman noted that often customers require civil engineering work to complete installation “and in some instances this can give a lead time of three to six months for completion.”
“Importantly we are growing the business without any substantial increase in the cost of customer acquisition and our fixed operating costs remain stable. Our sales support function in Durban, South Africa, is now back to working in the office following the easing of Covid restrictions, and that is translating into higher productivity and sales figures,” he outlined.
Toople said it is also achieving increased customer contact rates compared to those achieved in the past 18 months. Overall, the Board considers the outlook for the company to be “very positive” and it believes that increased revenue and gross profit figures will be achieved by the Company as the UK economy learns to live with Covid-19 and returns to normal. Horsman concluded that Toople is “well positioned” to capitalise on new opportunities going forward.
Last month, Toople said continued growth in the year to 30 September 2021 had informed a strong FY21 trading performance and outlook as EBITDA and profit increased, respectively.
In FY21, Toople completed its integration of DMSL, added ‘well established’ new customers across a wide variety of industries, and successfully raised £0.774m in a placing, it stated.
In particular, the company’s integration of DMSL which it had acquired in the prior financial year, DMSL, has continued to contribute “very positively” to the group, it highlighted today.
It explained: ’’There has been a greater contribution from DMSL to our business, which has a higher gross margin than the traditional Toople business due to the effect of Covid-19, which has boosted DMSL and has made its offering even more popular.’ It added that it continues to win ‘notable new contracts, and contract extensions,’ carrying previous momentum forward.
In its final year results for the period ended 30 September 2021, the telecom service provider reported an adjusted EBITDA improvement of 32% from £1,305k to £0.881m, a move driven by lower distribution costs and overheads and virtual elimination of bad debt costs, it noted.
Commenting on new business, Toople said ‘successful and dynamic customers’ continue to sign up with the Group, with each being an endorsement of its brand and service offering.
Follow News & Updates from Toople here: