Toople (TOOP ) announced that it has won a string of new contracts, including a contract to provide its telecoms services for a new joint venture between Sainsburys and Carluccio's.
The Group, which provides bespoke telecom services to UK SMEs, will provide services to the two leading UK brands after Sainsbury's recently announced a new partnership with restaurant chain Carluccio's to test out three new in-store concepts for the first time.
Toople will act as the preferred telecoms supplier providing data cloud connectivity and its retail connect 4G failover product will provide full disaster recovery in the JV’s venues.
Toople explained how the first format will be a coffee shop in Sainsbury's St Albans superstore, a 900 square foot cafe offering space for 45 customers to eat-in as well as take away options. The company highlighted that its services are already live on this site.
Toople detailed to investors that Caffè Carluccio's will open on 3 June 2021, with the cafe being the first of its kind to open inside a supermarket. In addition, a Carluccio's Counter will launch that month in the Sainsbury's Leamington Spa superstore while a Restaurant Hub will open in July 2021 at the Sainsbury's Selly Oak superstore which is situated in Birmingham.
Commenting on the contract wins, Andy Hollingworth, Chief Executive Officer at Toople:
Carluccio's was acquired by Boparan Restaurant Group in May last year, and given our existing relationship with them, it is a real honour to win further work from them to provide critical telecom infrastructure as they roll-out their new partnership with Sainsbury's.
As part of a second contract secured, Toople has been chosen by a local city council in the east of England to provide full cloud telephony and data connectivity over a five-year period. In addition, the group highlighted that as part of a third contract, it has also been appointed by a leading UK property firm to supply all mobile sim cards and telephones.
Toople explained that the unnamed UK property company is seeking more flexible working practices and mobility and that it will therefore offer customer support with 5G connectivity in over 100 devices through handsets and sims over an initial two-year contract.
“We continue to see business momentum, particularly as more of the UK economy starts to open up. Winning long term contracts with local governments and large corporates with strong credit profiles is great for the business and is an endorsement of the competitiveness of our service offering,” added Hollingworth.
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Since the beginning of the year, Toople has secured new contracts which CEO, Andy Hollingworth, said are “further evidence” of growing momentum. The group’s long-term outlook is expected to be largely underpinned by the UK Government’s commitment to roll out fibre telecommunication infrastructure to replace copper and upgrade the UK’s network to 5G.
Back in March 2021, the company unveiled in an update that monthly orders had continued to grow, with gross margins coming in as materially higher than during the pre-pandemic period.
Toople believes trading will continue to demonstrate significant progress as the current UK lockdown begins to ease and the economy moves towards the post-pandemic period.
Shares in the Toople were trading 16.24% higher this morning at 0.068p following the news.
Reasons To TOOP
The company completed its “transformational” acquisition of DMS Holdings (DMSL), a firm which provides unified communication services in the UK, back in February 2020. Toople believes DMSL will accelerate its own positive cash generation and drive profitability.
The macro drivers for TOOPLE indicate structural growth opportunities across the SME Telecom markets. Its contract wins, and renewals point towards several compelling value propositions from the Company across broadband, mobile, and fixed line services.
Market Opportunity
In a previous trading update, Toople said the macro drivers expected to precipitate substantial growth for the Group remain in place, particularly the UK government’s commitment to rolling out fibre telecommunication infrastructure to replace copper.
The macro drivers expected to precipitate substantial growth for the Group are said to remain in place, namely HM Government's commitment to the rolling out of fibre telecommunication infrastructure to replace the legacy copper infrastructure by 2025 and ‘the necessary and ultimately unavoidable upgrade’ of the UK’s network from 4G to 5G.
This forms part of the country’s efforts to upgrade its telecoms system to full fibre lines to deliver “gigabit speeds” following concerns that the UK has fallen behind other countries. The UK government aims for full-fibre networks to cover the entire country by 2033.
Openreach, which controls the UK’s telecoms infrastructure, is building full-fibre to over 4.5 million premises by the end of March 2021 and more than 20 million in the late 2020's.
Andy Hollingworth, CEO of Toople said this goal coupled with the impact of COVID-19 is driving the need for better remote connectivity and unified communications solutions.
“As full-fibre availability in the UK grows exponentially, our suite of services supports the transition to a full-fibre future and as the availability of fibre increases, so too will the number of new and expanded contracts for Toople,” he commented.
He highlighted the significance of this accessibility in a “new reality where employees can work from anywhere but must remain seamlessly connected to their colleagues and clients.” And said, “In light of societal changes to working practices, and technical upgrades to the UK's communications infrastructure, the long-term outlook for Toople is bright."
Strong Balance Sheet
Toople’s balance sheet is expected to provide it with greater flexibility to target additional organic growth opportunities across their target markets, which should lead to a positive outturn for FY20 and accelerate its path to profitability and positive cash flow in FY21.
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