Interim results for the period ended 30 June 2022

RNS Number : 2401B

LoopUp Group PLC

30 September 2022

 

30 September 2022

LOOPUP GROUP PLC
("LoopUp" or the "Group")

Interim results for the period ended 30 June 2022

LoopUp Group plc (AIM: LOOP), the cloud platform for premium hybrid communications, announces its unaudited interim results for the six months ended 30 June 2022 ("H1-22").

Financial Highlights:

·	Revenue of £6.6 million (H1-21: £11.5 million) at a gross margin of 67% (H1-21: 67%)
·	Adjusted EBITDA1 loss of £1.5 million (H1-21: £1.2 million profit) and adjusted operating loss2 of £5.1 million (H1-21: £2.4 million)
·	Gross cash of £0.7 million and net debt of £8.0 million at 30 June 2022 (30 June 2021: £5.0 million and £6.9 million respectively)

Operating Highlights:

·	Continued execution on strategic transition from traditional base of remote meetings services into a broader cloud platform for hybrid communications
·	Cloud Telephony: material acceleration in commercial traction:
-		133% acceleration in customer wins: 35 in the twelve months to Jun-22 versus 15 in the twelve months to Jun-21
-		224% acceleration in contract wins: 81 in the twelve months to Jun-22 versus 25 in the twelve months to Jun-21
-		Sales pipeline of new opportunities exceeded c.£100 million ARR at the end of the period
·	Hybridium: closed a landmark contract with Telefónica for deployment at 'Universitas', its global innovation and talent hub in Madrid

Post Period Highlights

·	Cloud Telephony: 10 additional Cloud Telephony customer wins and 24 additional contract wins, leading to a total of 60 customer wins and 130 contracts signed since service launch in Q3 2020
·	Meetings: closed major contract with PGi expected to generate c.£10 million of revenue and c.£5 million of net cash contribution in the twelve months from October 2022 to September 2023
·	Successful Capital Raising for approximately £3.5 million in September 2022, subject to General Meeting scheduled for 17 October 2022
·	Successful renegotiation of senior debt arrangements with Bank of Ireland

Steve Flavell and Michael Hughes, co-CEO's of LoopUp, commented:

"We continued to make progress during the half, as we strategically transition our business and technology into a broader cloud platform for hybrid communications.

Our primary growth line of business, Cloud Telephony, has seen contract wins accelerate by 264% in the second year post service launch, and the recent PGi Connect deal will materially boost our legacy Meeting business, which we expect to return to growth in HY 2022 as a result.

Looking ahead, we are excited by the growth potential of Cloud Telephony, and welcome the material cash boost from the PGi Connect deal and the proposed Capital Raising, which will enable us to take Cloud Telephony into its next phase of commercial acceleration."

1	Adjusted EBITDA is operating profit/(loss) stated before depreciation, amortisation of development costs and acquired intangibles, exceptional reorganisation costs, exceptional impairment charge and share-based payment charges.
2	Adjusted operating profit/(loss) is operating profit/(loss) stated before amortisation of acquired intangibles, exceptional reorganisation costs, exceptional impairment charge and share-based payment charges.

LoopUp Group plc	via FTI
Steve Flavell, co-CEO
Panmure Gordon (UK) Limited	[phone]
Dominic Morley / Alina Vaskina (Corporate Finance)
Erik Anderson (Corporate Broking)
Cenkos Securities Limited	[phone]
Giles Balleny / Dan Hodkinson (Corporate Finance)
Alex Pollen (Sales)
FTI Consulting, LLP	[phone]
Matt Dixon / Jamille Smith / Tom Blundell

About LoopUp Group plc

LoopUp (LSE AIM: LOOP) is a cloud platform for premium hybrid communications. The Group's flagship Cloud Telephony solution for Microsoft Teams enables multinational enterprises to consolidate their global telecommunications into a single, consistently managed cloud implementation rather than disparate implementations from multiple carriers. The Group's hybrid auditorium and events solution, Hybridium (www.hybridium.com), brings unrivaled engagement and analytics to larger scale hybrid education, training and events such as management onsites, departmental kick-offs, capital markets days and thought leadership seminars.

The Group is listed on the AIM market of the London Stock Exchange (LOOP) and is headquartered in London, with offices in the US, Spain, Germany, Hong Kong, Barbados and Australia.

Chief Executive Officers' Business Review

The Group has made strong continued progress during H1-22 with the continued transition of our business, and expansion of our technology, into a broader cloud platform for hybrid communications.

In our legacy Meetings business, the recently announced deal with PGi Connect gives this business unit a material boost that is expected to return the business back to growth in H2-22 and FY2023. While this business remains in underlying decline as enterprises progressively embrace more holistic Unified Communications (UC) platforms such as Microsoft Teams, this material book of business from PGi Connect is expected to contribute approximately £10 million in revenue and £5 million in net cash to the Group over the 12-month period from October 2022 to September 2023.

Meanwhile, the Group's primary growth line of business and source of long-term shareholder value - Cloud Telephony - has demonstrated material commercial acceleration in its second-year post service launch. This is the result of the Group's compelling commercial value proposition targeted at the multinational mid-market and enterprise market, facilitating single vendor telephony service provision globally, rather than supply from a patchwork of multiple domestic/regional telecommunications carriers. Contract wins accelerated by 264% in the second-year post service launch, and specifically by 224% in the twelve months to June 2022 versus the equivalent prior year period.

We are excited by the growth potential of Cloud Telephony, and welcome the material expected cash boost from the PGi Connect deal, together with the proposed Capital Raising as announced on 28 September (subject to shareholder approval), to take this primary growth line of business for the Group through its next phase of commercial acceleration.

Group business overview

The Group has three lines of business:

· Meetings - legacy cash generative business

-	Integrated audio, web and video remote meetings software and service, focused on premium audio quality and ease-of-use
-	In underlying decline but materially boosted by the major agreement with PGi Connect, as announced on 1 September 2022

· Cloud Telephony - primary growth line of business

-	Next generation telephony - 'PSTN replacement' - enabling phone calls to and from work phone numbers independently of the user's physical location and not tied to a physical handset, and integrated with Unified Communications platforms such as Microsoft Teams
-	Targeting the multinational mid-market and enterprise market segment of this large, growing market, forecast to be a $29 billion market by 2025 (source: Gartner, 2022)
-	Strong acceleration of commercial traction, with 130 contracts closed two years on from service launch and demonstrating material acceleration in customer and contract win-rate

· Hybridium - secondary growth line of business

-	Hybrid auditorium technology, enabling large scale hybrid events (20-150 people in room and 20-150 people remote), such as company town halls, management onsites / offsites, team kick-offs, Capital Markets days, product launches, and corporate training

Meetings and PGi Connect deal

The Group's Remote Meetings business has been declining in the post pandemic environment as enterprises progressively embrace more holistic Unified Communications (UC) platforms, such as Microsoft Teams, which incorporate meetings functionality.

However, on 1 September 2022, the Group announced that it had entered into a major revenue sharing and customer transfer agreement with PGi Connect, giving LoopUp the rights to transfer materially all of PGi Connect's conferencing services customers over to LoopUp. While no initial or fixed consideration is payable, the Group will pay PGi Connect a share of revenue invoiced and received from successfully transferred customers for a period of three years.

On 2 September 2022, PGi Connect sent out the first (and largest) batch of contract assignment notices to c.8,100 of its direct enterprise customers, concerning the transition of services to LoopUp from 1 October 2022. As at July 2022, these 8,100 customers had an annualised revenue run-rate of c.£34 million to PGi Connect.

The Group has prior experience of large-scale customer transitions onto its platform following the acquisition of MeetingZone in 2018. The Group is not taking on any of PGi's infrastructure, equipment, datacentres or vendor contracts, making the transition clean and cost efficient. Nevertheless, from customers' perspective, the transition will be seamless with dial-in numbers, meetings access codes and active calling rates remain unchanged in nearly all cases, and with standard PGi terms and conditions remaining in place meaning no re-contracting.

While this is clearly a highly material level of assigned business, and while more is expected to be taken on in due course relating to PGi Connect's indirect business, the Group is making prudent assumptions regarding transition loss for non-term-committed customers as well as general ongoing business attrition, and so expects the agreement to generate revenue of approximately £10 million and net cash contribution to the Group of approximately £5 million over the twelve-month period from October 2022 to September 2023.

Cloud Telephony

In Q3 2020, the Group launched its Cloud Telephony solution, which has since developed into its primary growth line of business for long-term future value creation in the Group. The Cloud Telephony market is forecast to grow to $29 billion by 2025, and the Group's aspiration is to become one of a small number of winners in the multinational mid-market and enterprise segment, providing customers with single-vendor service provision globally rather than the status quo of multiple telecommunications carriers in specific countries and regions.

Since launch, the Group has secured 60 customer wins, comprising 130 individual contracts, and has done so at an accelerating win rate:

·

133% increase in customer wins, with 42 won during the second year post service launch ending August 2022 (18 during the first year post service launch ending August 2021); and

·

264% increase in individual contract wins, with 102 won during the second year post service launch ending August 2022 (28 during the first year post service launch ending August 2021). The greater acceleration in contract wins versus customer wins reflects the 'layering effect' from progressive geographic customer rollouts - i.e. approximately one third of the contract wins in the second year post launch were from customers won in the first year post launch.

In aggregate, these 60 customer wins represent:

·	Minimum Annual Recurring Revenue (ARR) of £1.2 million and minimum Total Contract Value (TCV) of £4.4 million, based on minimum contracted levels;
·	Expected ARR of c.£2.4 million and expected TCV of c.£7.9 million, where LoopUp has relatively strong visibility of customer intent for the next stage of rollouts based on conversations, planning and pricing; and
·	Potential ARR of c.£5.3 million and potential TCV of c.£16.5 million, based on identified potential rollout levels but where LoopUp currently has less clear visibility of customer intent.

Operationally, all customer deployments to date have been successful, and all rollouts are progressing positively. One customer win case study is a leading global communications consulting firm with c.7,000 employees across 30 countries. The Group has successfully rolled out now to 18 of these countries with minimum committed ARR of c.£260K, bringing the customer's number of telephony vendors down from 20 to 1 in those countries. The remaining 12 countries are scheduled to be rolled out by March 2023. Other customer wins include a US-headquartered Fortune 100 technology company, a Germany-headquartered global industrial group, an Asia-Pacific-headquartered global food group, and a French-headquartered global logistics company. 

In addition to these 60 customer wins, the Group's sales pipeline of potential new Cloud Telephony opportunities continues to grow and now stands at more than £100 million of additional potential ARR, of which approximately 15% is at written proposal stage or later. The pipeline includes:

· Proofs of Concept (PoC)

-	Sometimes PoCs are needed in order to win a customer, whereby the potential customer can pilot the technology and confirm that it works in their IT environment
-	LoopUp's track record of completed PoCs is a 94% conversion rate into successful customer wins
-	In its current pipeline, the Group has 11 live PoC projects and 16 further requests for proposal, so 27 PoC opportunities in total, including with a top-5 global law firm, a Big-4 accounting firm, a major global sportswear company, and a leading holidays group

· Strong opportunities

-	Separately to the above PoC opportunities, the Group has 41 contract opportunities in its pipeline that it expects to close by the end of 2022, which are expected to represent minimum contracted ARR of c.£630K
-	17 of these 41 new contract opportunities are with the Group's 60 existing customers (i.e. continued geographic rollouts), and 24 are with new customers that the Group expects to win in this period

The Group is achieving this strong and accelerating commercial traction in Cloud Telephony due to its differentiated offer for multinational mid-market and enterprise customers versus competition from telecommunications carriers and UC platform calling plans. Specifically, this includes the Group's:

·	Highest quality routing voice network, built over 16 years for international legal conference calls;
·	Underlying relationships with 19 Tier-1 carrier partners, facilitating full domestic PSTN replacement including number porting, domestic CLI pass-through and emergency services calling;
·	Licensed / regulatory-compliant geographic coverage, expected to span c.80 countries by early 2023 (including China and India);
·	Customer connectivity options - UC-integrated / SIP / hybrid - for future-proofed customer decision-making at varied stages of the Cloud Telephony technology journey;
·	Global Management Portal software layer, for consistent service visibility and administration, globally;
·	Span of expertise encompassing Unified Communications (including Microsoft's 'Advanced Specialization' - the competency level above gold partnership status - in Teams telephony), VoIP/SIP, telecommunications and software; and
·	PerfectBundle pricing for spend commitment pooling across a multinational customer's global billing entities.

Hybridium

Following the acquisition of SyncRTC Inc. in October 2021 ( www.hybridium.com ), rebranded Hybridium combines video wall, hologram and virtual live stage technology, bringing unrivalled engagement and analytics to larger scale hybrid education, corporate training and events such as management onsites, departmental kick-offs, capital markets days and thought leadership seminars. Events with Hybridium benefit from ultra-low latency at ultra-high resolution, with full video wall layout flexibility facilitating any content on any screen.

In April 2022, Hybridium signed a deal with Telefónica for the deploying of its solution at 'Universitas', Telefónica's global innovation and talent hub located at its Madrid headquarters in Distrito Telefónica. While the Group wishes to sell Hybridium to more large enterprises, such as Telefónica, and while building pipeline for such opportunities is very achievable in the post pandemic hybrid working environment, the purchase ticket price is material (with the associated hardware), and many enterprises are still in the phase of assessing and formulating their future working policies rather than making major investments.

As such, the Group's primary planned route to market for this technology in the near term will be via renting a LoopUp-owned and managed facility, which will be at a much lower ticket price of approximately £15,000 per half day rental. The Group has identified a primary location in the City of London and is at heads of terms for a lease. The Group believes this route to market has the potential for fast investment payback and the potential to replicate in other major urban centres, as well as being an effective shop window and experiential facility for further enterprise sales such as Telefónica.

For context, planned forward-looking investment in Hybridium is materially less than that in Cloud Telephony at approximately one tenth of the investment.

Capital Raising

As announced on 28 and 29 September 2022, subject to shareholder approval at General Meeting to be held on October 17 2022, the Group has successfully closed a Capital Raising for approximately £3.5 million, by way of an institutional placing and direct subscriptions with the Company, at an issue price of £0.05.

Additionally, Turner Pope Investments Limited ("TPI") is currently conducting a broker offer (the "Broker Offer") allowing additional subscriptions from investors who did not participate in the Capital Raising for new Ordinary Shares through TPI at the same £0.05 Issue Price with a value expected to be around £1.0 million (and which may be increased by agreement between the Company and TPI in the case of sufficient demand), with priority being given to existing shareholders.

The Capital Raising, the proceeds of the Broker Offer and the expected cash generation from the PGi Connect agreement, will:

· support the next phase of investment in Cloud Telephony (primary) and Hybridium (secondary);

· support the transfer of Meetings customers from PGi Connect;

· provide near term working capital for the Group; and

· strengthen the Group's balance sheet going forward.

Restructuring of existing debt arrangements

In 2018, the Group entered into a term loan with Bank of Ireland for £17.0 million, which has since reduced to a current balance of £6.9 million, and a revolving credit facility. On the basis of the Group's deal with PGi Connect and this proposed Capital Raising , the Group and Bank of Ireland have agreed the following changes to the term loan arrangements:

·	A new set of covenants will apply, reflecting the improved outlook of the Group based on a minimum liquidity level, EBITDA performance and Cloud Telephony revenue;
·	50% of the Capital Raising above the minimum £2.7 million net proceeds level (i.e. £3 million gross proceeds less fees of approximately £0.3 million) will be applied to previously-agreed principal repayment holidays through to June 2023, as announced in the Group's preliminary results on 7 June 2022;
·	The interest rate of 4.5 percent above the Sterling Overnight Index Average (SONIA) will continue to apply;
·	Breaches by the Company over the past two months of previous (now renegotiated) financial covenants or information provision requirements are waived; and
·	The additional revolving credit facility for £1.5 million, which the Group has drawn on over recent months, will be repaid in full and cancelled.

Outlook

The PGi Connect deal, together with the proposed Capital Raising, gives the Group the cash boost it needs to take its primary Cloud Telephony business through the next phase of growth. The Group's solution is materially differentiated for the multinational segment in the large, growing Cloud Telephony market, and the Group is now building upon clearly accelerating commercial traction and success.

Steve Flavell  Michael Hughes

co-CEO  co-CEO

Unaudited consolidated statement of comprehensive income for the six months to 30 June 2022

£'000		Six months to 30 June 2022	Six months to  30 June 2021	Year to  31 December 2021
Revenue		6,632	11,500	19,526
Cost of sales		(2,211)	(3,793)	(6,058)
Gross profit		4,421	7,707	13,468
Adjusted operating expenses (1)		(5,967)	(6,515)	(12,272)
Adjusted EBITDA (2)		(1,546)	1,192	1,196
Depreciation		(806)	(845)	(1,760)
Amortisation of development costs		(2,722)	(2,769)	(5,582)
Adjusted operating profit / (loss)(3)		(5,074)	(2,422)	(6,146)
Exceptional reorganisation costs		(259)	(407)	(392)
Exceptional impairment charge		-	-	(19,597)
Amortisation of acquired intangibles		(925)	(1,105)	(2,211)
Share-based payment charges		(602)	(300)	(2,208)
Total administrative expenses		(11,281)	(11,941)	(44,022)
Operating profit / (loss)		(6,860)	(4,234)	(30,554)
Finance costs		(212)	(204)	(465)
Profit / (loss) before income tax		(7,072)	(4,438)	(31,019)
Income tax		(121)	(83)	6,052
Profit / (loss) for the period		(7,193)	(4,521)	(24,967)
Other comprehensive income and loss
Currency translation gain / (loss)		27	(190)	(340)
Total comprehensive income / (loss) for the period attributable to the equity holders of the parent		(7,166)	(4,711)	(25,307)
Earnings / (loss) per share (pence) - Note 4
-  Basic and diluted adjusted (4)		(5.4)	(4.9)	(7.7)
-  Basic and diluted		(7.1)	(8.2)	(39.0)

1.	Total administrative expenses excluding depreciation, amortisation of development costs and acquired intangibles, exceptional reorganisation costs, exceptional impairment charge and share-based payment charges.
2.	Adjusted EBITDA is operating profit/(loss) stated before depreciation, amortisation of development costs and acquired intangibles, exceptional reorganisation costs, exceptional impairment charge and share-based payment charges.
3.	Adjusted operating profit/(loss) is operating profit/(loss) stated before amortisation of acquired intangibles, exceptional reorganisation costs, exceptional impairment charge and share-based payment charges.
4.	Basic adjusted and diluted adjusted earnings per share are calculated using profit/(loss) attributable to equity holders adjusted for exceptional reorganisation costs, exceptional impairment charges, amortisation of acquired intangibles and share based payment charges.

Unaudited consolidated statement of financial position at 30 June 2022

£'000		30 June 2022	30 June 2021 (Restated)	31 December 2021
Assets
Non-current assets
Property, plant and equipment		1,985	2,504	2,368
Right of use assets		1,717	2,452	2,130
Intangible assets:
-  Development costs		12,384	11,577	12,726
-  Other intangible assets		5,397	26,341	5,638
-  Goodwill		35,425	31,511	35,425
Total non-current assets		56,908	74,385	58,287
Current assets
Trade and other receivables		3,632	4,331	3,608
Cash and cash equivalents		662	5,019	5,465
Current tax		2,063	1,567	1,862
Total current assets		6,357	10,917	10,935
Total assets		63,265	85,302	69,222
Liabilities
Trade and other payables		(3,796)	(2,585)	(3,384)
Accruals and deferred income		(1,659)	(1,818)	(2,036)
Lease liabilities		(762)	(724)	(956)
Borrowings		(1,700)	(1,700)	(1,700)
Total current liabilities		(7,917)	(6,827)	(8,076)
Net current assets/(liabilities)		(1,560)	4,090	2,859
Non-current liabilities
Borrowings		(6,948)	(10,200)	(6,181)
Lease liabilities		(1,468)	(2,102)	(1,463)
Deferred tax liability		(1,721)	(6,099)	(1,721)
Provisions		(172)	-	(172)
Total non-current liabilities		(10,309)	(18,401)	(9,537)
Total liabilities		(18,226)	(25,228)	(17,613)
Net assets		45,039	60,074	51,609
Equity
Share capital		518	277	485
Share premium		71,129	60,677	70,860
Other reserve		12,691	12,691	12,691
Foreign currency translation reserve		(2,722)	(2,662)	(2,749)
Share based payment reserve		3,689	1,654	3,395
Retained loss		(40,266)	(12,563)	(33,073)
Shareholders' funds attributable to equity owners of parent		45,039	60,074	51,609

 

Unaudited consolidated statement of changes in equity at 30 June 2022

£'000	Share capital	Share premium	Other reserve	Foreign currency translation reserve	Share based payment reserve	Retained loss	Shareholders' funds / (deficit) attributable to equity owners of parent
Balance at 1 January 2021 (restated - note 6)	277	60,677	12,691	(2,409)	1,354	(8,106)	64,484
Total comprehensive (loss)	-	-	-	(190)	-	(4,521)	(4,711)
Equity share-based payment compensation	-	-	-	-	300	-	300
Balance at 30 June 2021	277	60,677	12,691	(2,599)	1,654	(12,627)	60,073
Total comprehensive (loss)	-	-	-	(150)	-	(20,446)	(20,596)
Equity share-based payment compensation	4	163	-	-	1,741	-	1,908
Proceeds from share issues	204	10,020	-	-	-	-	10,224
Balance at 31 December 2021	485	70,860	12,691	(2,749)	3,395	(33,073)	51,609
Profit and total comprehensive income / (loss)	-	-	-	27	-	(7,193)	(7,166)
Equity share-based payment compensation	33	269	-	-	294	-	596
Balance at 30 June 2022	518	71,129	12,691	(2,722)	3,689	(40,266)	45,039

Unaudited consolidated statement of cash flows for the six months to 30 June 2022

£'000	Six months to 30 June 2022	Six months to  30 June 2021	Year to  31 December 2021
Operating activities
Profit / (loss) before tax	(7,072)	(4,438)	(31,019)
Non-cash adjustments:
Depreciation and amortisation	4,413	4,625	9,548
Share based payment charge	602	300	2,208
Impairment charges	-	-	19,597
Interest payable	212	204	465
Working capital adjustments:
(Increase) / decrease in trade and other receivables	(24)	2,544	3,377
Increase / (decrease) in trade and other payables	34	(5,464)	(4,864)
Net income tax received / (paid)	(302)	(45)	1,194
Cash generated from/(used in) operations	(2,137)	(2,274)	506
Cash flows from investing activities
Purchase of property, plant and equipment	(38)	(218)	(586)
Development expenditure	(3,000)	(2,957)	(6,919)
Payment for acquisition of subsidiary	-	-	(3,574)
Net cash used in investing activities	(3,038)	(3,175)	(11,079)
Cash flows from financing activities
Proceeds from share issues	-	-	10,391
Repayment of loans	-	(850)	(5,839)
Payments for leased assets	(379)	(374)	(840)
Loans acquired on acquisition	-	-	971
Credit facility	930	-	-
Interest and finance fees paid	(152)	(204)	(365)
Net cash generated from/(used in) financing activities	399	(1,428)	4,318
Net increase / (decrease) in cash and cash equivalents	(4,776)	(6,877)	(6,255)
Cash and cash equivalents brought forward	5,465	12,086	12,086
Effect of foreign exchange rate changes	(27)	(190)	(366)
Cash and cash equivalents carried forward	662	5,019	5,465

Notes to the financial information for the six months ended 30 June 2022

1. General information

LoopUp Group plc (AIM: "LOOP", "LoopUp Group", or the "Group") is a global provider of hybrid communication software and services.  It is a public limited company incorporated and domiciled in England and Wales, with company number 09980752.  Its registered office is The Tea Building, 56 Shoreditch High Street, London, E1 6JJ.

2. Basis of preparation and significant accounting policies

These consolidated interim financial statements have been prepared in accordance with UK adopted International Accounting Standards ("IFRS") and IFRS Interpretations Committee (formerly IFRIC) interpretations in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. This results announcement does not constitute statutory accounts of the Group within the meaning of sections 434(3) and 435(3) of the Companies Act 2006. The balance sheet at 31 December 2021 has been derived from the full Group accounts published in the Annual Report and Accounts 2021, which has been delivered to the Registrar of Companies and on which the report of the independent auditors was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

The results have been prepared in accordance with the accounting policies set out in the Group's 31 December 2021 statutory accounts, which are based on the recognition and measurement principles of IFRS.

These unaudited interim results have been prepared on the going concern basis. At the balance sheet date, the Group had cash of £0.7m and net assets of £45m. As announced on 1 September 2022, the Group has entered into an agreement whereby it has the right to transfer materially all of the business of PGi Connect, which the Directors expect to contribute around £5m of net cash to the Group in the twelve months following transition. As announced on 29 September 2022, the Group has raised additional capital of approximately £3.5m. Given these factors and based on detailed forecasts prepared by management, the Directors have a reasonable expectation that the Group has adequate resources to continue operations for the next twelve months, and as such these results have been prepared on a going concern basis.

The results for the six months ended 30 June 2022 were approved by the Board on 30 September 2022. A copy of these interim results will be available on the Group's web site www.loopup.com from 30 September 2022.

The principal risks and uncertainties faced by the Group have not changed from those set out in the Annual Report and Accounts 2021.

No impact is anticipated from new standards coming into effect from 1 January 2022.

3. Revenue and segmental reporting

IFRS 8 Operating Segments requires operating segments to be identified on the same basis as is used internally for the review of performance and allocation of resources by the CODM.  The Directors have identified the segments by reference to the principal groups of services offered and the geographical organisation of the business as reported to the CODM.

In July 2020, the Group announced a major extension to the LoopUp proposition to include global cloud voice services via Direct Routing integration with Microsoft Teams (known as Cloud Telephony). This capability, alongside the Group's longstanding Remote Meetings and Managed Events capabilities, combine into a category termed LoopUp Platform Capabilities (LPC). Revenue from resale of Cisco WebEx services is categorised as 'third party resale services'. In addition to the above segments adopted in the 2020 annual report and accounts, this year a new segment exists as a result of the acquisition of SyncRTC in October 2021, that of Hybridium.

Segmental revenues are external and there are no material transactions between segments.  The Group's largest customer represented less than 5% of total revenue in both years.

No segmental balance sheet was presented to the CODM. It is not possible to allocate overheads, and therefore profits, by segment due to the pooled nature of the overhead base and the capital structure. Overheads are not presented to the CODM on a segmental basis.

The Group's revenue disaggregated by primary geographical markets is as follows:

£'000	6 months to 30 June 2022	6 months to 30 June 2021	12 months to 31 December 2021
UK	2,674	5,417	8.664
EU	1,058	1,904	3,455
North America	2,813	4,015	7,108
Rest of world	87	164	299
	6,632	11,500	19,526

The Group's revenue disaggregated by pattern of revenue recognition is as follows:

£'000	6 months to 30 June 2022	6 months to 30 June 2021	12 months to 31 December 2021
Services transferred at a point in time	4,237	11,397	12,750
Services transferred over time	2,395	103	6,776
	6,632	11,500	19,526

The Group's revenue disaggregated by segment is as follows:

£'000	6 months to 30 June 2022	6 months to 30 June 2021	12 months to 31 December 2021
LoopUp Platform Capabilities	4,590	8,925	14,843
Third party resale services	1,642	2,575	4,441
Hybridium	400	-	242
	6,632	11,500	19,526

The Group's non-current assets disaggregated by primary geographical markets are as follows:

£'000	6 months to 30 June 2022	6 months to 30 June 2021	12 months to 31 December 2021
UK	55,222	73,063	56,851
EU	170	1	253
North America	1,513	715	1,181
Rest of world	3	3	2
	56,908	73,782	58,287

 

4. Earnings per share

The basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the year. 

	6 months to 30 June 2022	6 months to 30 June 2021	12 months to 31 December 2021
Profit / (loss) attributable to equity holders (£'000)	(7,193)	(4,521)	(24,967)
Adjusted profit attributable to equity holders (£'000) (1)	(5,407)	(2,709)	(4,938)
Weighted average number of ordinary shares in issue ('000)	100,783	55,441	63,992
Basic earnings per share (pence):
-  Basic adjusted (1)	(5.4)	(4.9)	(7.7)
-      Basic	(7.1)	(8.2)	(39.0)

1.	Calculated using profit / (loss) for the period, adjusted for exceptional reorganisation costs, exceptional impairment charges, amortisation of acquired intangibles and share based payment charges.

Since the Group made a loss in each of the periods above, there were no potentially dilutive shares that were not anti-dilutive, and the diluted earnings per share is identical to the basic earnings per share.

5. Dividends

The directors did not recommend the payment of a dividend for the years ended 31 December 2021 or 2020, or the six month periods ended 30 June 2022 or 2021.

6. Prior year restatements

The annual report and accounts for the year ended 31 December 2021 set out certain restatements made to prior years which impact on the 30 June 2021 comparative figures in this interim financial information.

(a) Right of use assets

During 2021, the Group identified that certain assets, liabilities and charges relating to right of use assets had been misstated in prior years. These balances were restated as at 1 January 2020 and 31 December 2020, and the total adjustment affecting the 30 June 2021 comparatives is set out below:

£'000
Right of use asset			603
Lease liabilities			(977)
Prepayments			131
Trade creditors			60
Opening reserves			183

(b) Deferred tax

During 2021, the Group identified that in 2020 the deferred tax liability relating to the customer relationship and brand assets recognised on the acquisition of MeetingZone had been calculated at the incorrect main corporation tax rate. This deferred tax liability was initially calculated using a tax rate of 17%, as the reduction to this rate had been substantively enacted through parliament. However, in 2020, the UK government announced that the rate would remain at 19%. An adjustment should have been made in 2020, through the deferred tax charge, to reflect the new tax rate. The adjustment results in an increase of £518,000 in the Group's deferred tax charge and deferred tax liability in 2020.

 

END

 

 

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