Toople (LON:TOOP ) has signed new multi-year  contracts with a global Investment management company Headquartered in London and a large national property management company based in East England.

Both contracts are for the new Internet Protocol (“IP”) cloud-based telephony services delivered by the recently acquired DMSL, which is well positioned to benefit from the recent changes to working behaviours and the structural change across the UKs telephone infrastructure to IP/cloud based solutions.

Importantly for investors, these contracts also include large up-front payments, which will ensure the contracts make an immediate positive cashflow contribution, despite the initial capex required to procure the hardware from third party suppliers and install the solution.

Both contracts therefore accelerate the Company’s anticipated timeline to positive cash generation and profitability without incurring any additional funding requirement for working capital.

Toople completed its “transformational” acquisition of DMS Holdings which holds DMSL, a firm which provides unified communication services in the UK, back in January 2020 and both contracts announced today reflect the Company’s playbook to position itself and the leading edge of the UKs transformation of its telecommunications infrastructure from copper to fibre to the cabinet and fibre to the home initiatives.

Investors should also note the increased M&A activity in the Telco sector following the surprise announcement from Toscafund Asset Management to acquire Talk Talk, at a significant premium to the Company’s prevailing share price, last week. This unsolicited approach clearly indicates another driver for TOOPLE shares as Venture Capital moves into the space to capture some of the unrealised value in telecommunication providers across the UK.

Contract 1

The first of the two IP Telco contracts is with a global Investment management company over three years to replace its traditional PBX system with DMSL's IP cloud based next generation platform to deliver all their employees more freedom and accessibility from any location. The platform supports access via an app to desktop, laptop, tablet, and mobile phone and includes a contracted dedicated high-speed internet connection to its London headquarters, also for a three-year period.

Contract 2

Separately, Toople told investors that DMSL has won a contract to provide services to a large property management, and sales and letting business based in the East of England.

The real estate agency, which has multiple offices across the region, has signed a five-year contract through DMSL for the delivery of IP cloud-based telephony in all their locations. 

As a BT Premier reseller, DMSL, is working with network providers including EE, O2 and TalkTalk Business, and has ‘multiple revenue streams delivering upfront cash and recurring revenue.’
Shares in Toople have more than doubled in the past three months and opened 15.79% higher this morning at 0.165p following the announcement. 

Significant Market Opportunity

In a recent trading update, Toople told investors that the macro drivers expected to precipitate substantial growth for the Group remain in place, particularly the UK government’s commitment to rolling out of fibre telecommunication infrastructure to replace copper.

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 importance of this accessibility in a “new reality where employees can work from anywhere but must remain seamlessly connected to their colleagues and clients.” And added “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."

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