LoopUp Group PLC’s (LON:LOOP) attractive growth metrics remain in tact, according to analysts at Numis.
In a note to investors after the remote meetings technology firm posted its first half results, Numis said it remains “strongly positive” on the stock and repeated a ‘buy’ recommendation.
The company posted a 65% rise in its adjusted underlying earnings (EBITDA) to £2.7mln for the first six months of 2018 on revenue 39% higher, boosted by the June acquisition of MeetingZone.
LoopUp forked out £61.4mln for the UK-based firm, which sells its own stand-alone audio conferencing services, resells Cisco's WebEx and Spark collaboration services, and also offers a value-added audio services product for Microsoft Skype for Business.
It’s settling in better than expected as well. LoopUp’s management had initially expected the new purchase to generate cost savings of approximately £0.5mln this year and at least £2.8mln in 2019.
“The board is now pleased to report that it expects to deliver cost savings greater than previously stated and on a quicker timescale,” the company said.
It is now forecasting savings of £1.3mln and £3.2mln in 2018 and 2019, respectively. The one-off cost associated with implementing these cost savings remains at around £1mln.
During the first half, LoopUp also entered the Australian market with two new business 'Pods', which it said had already won more than 30 new customers.
LoopUp said it continues to see strong demand for its products from its target market of mid-to-large enterprises and professional services firms. The seven pods in LoopUp's existing UK and US markets continue to operate well in terms of recurring gross margin and return on investment, it said.
LoopUp’s co-chief executives Steve Flavell and Michael Hughes said it had been a “transformational period" for the group.
Looking ahead, the company said it remains “confident in our ability to deliver strong future growth and meet market expectations”.
At the end of June, the group held £5.8mln in cash and had net debt of £11.2mln.
It is an irritant, but if you look at the impact on an international scale and frame it in terms of lost man-hours, then it adds up to a £14bn-a-year brake on productivity in the UK and US alone, so the company is addressing a potentially massive market.
Sure, there are alternative communications platforms out there developed by software firms and telecommunication companies, but they either fail to address the familiar chaos or are just too complicated to encourage widespread adoption. LoopUp, on the other hand, thinks its system has cracked the problem.