Toople PLC (LON: TOOP), a provider of bespoke telecom services to UK SMEs, will today hold its Annual General Meeting (AGM) at The Chapel, Granville Court, Britwell Road, Burnham, SL1 8DF, United Kingdom at 09.00am.
At the AGM Richard Horsman, Non-Executive Chairman, will make the following statement regarding current trading:
“Over the last few months we have made tremendous progress and I am very pleased to announce that Toople is showing strong growth, proving that our strategy is working.
We continue to grow our customer base every month and correspondingly our revenues are also growing across many of our business segments. Gross profit continues to improve substantially and EBITDA remains largely similar to last year as we continue to invest in our direct marketing and sales operations, which as is being evidenced, is laying the foundations for our future sustainability and growth. Our cash position remains in line with management expectations.
December is typically a month where SMEs do not change their service providers, however we experienced a strong month in December 2018 with a large number of new customer signups in excess of 300% when compared to December 2017. 2019 has started in a similar fashion with January being another record month in terms of net customer contracts won (242% of January 2018 level) and February (243% of February 2018 level) showing significant progress in our key metrics when compared to last year.
Our success is being driven by our digital marketing strategy and the investments we have made in this area are clearly paying off. We continue to offer premium quality customer service and our customer satisfaction scores are outstanding compared to other well-known UK providers. The increase in costs from our investment in bringing the sales team in-house and in digital marketing are largely being offset by an increase in lead conversion and sales. The majority of these new clients are on two year fixed contracts, giving us clear visibility of earnings.
Another growth driver for us is our partnership agreements. We have evaluated this area of our business including an assessment of all our legacy contracts as historically, this area of our business has delivered low gross margins. Our strategy is to only sign new partnership agreements that deliver gross margin improvements. Furthermore, as old contracts come to an end we are either renegotiating or terminating those agreements.
During the year we have continued to sign new partners across a variety of sectors and we expect to see overall gross margins in this area to improve over time. I am pleased to report that the £3.5m contract win announced on 29th August 2018 has now integrated the Toople Merlin billing and provisioning platform into its business and the first batch of customers have successfully completed billing. The second batch of customers is expected to complete provisioning and billing during April.
Finally, as Brexit looms it would be remiss not to address this issue. Our customer base is solely the UK SME market and this is where we will continue to focus. Whilst Brexit may have an impact on many businesses one thing remains the same: SMEs will all continue to need, maybe more than ever, a simple and easy bespoke fixed price product that gives them exactly what they need, backed by top quality customer service. Our fixed price telecom services, which allow our customers to budget with cost visibility and our unrivalled customer service is increasingly attractive to the market and is becoming business critical as SMEs face so much wider uncertainty. We are proud they can rely upon Toople plc.”