LONDON (Alliance News) - Toople PLC on Friday said profit is continuing to improve while revenue is growing after a particularly strong performance in recent months.
Shares in Toople were up 6.4% at 0.27 pence on Friday morning.
Toople provides bespoke telecom services to small and medium enterprises in the UK.
In a statement at Toople's annual general meeting Friday, Non-Executive Chair Richard Horsman said the company's revenue is growing across many of its business segments and "gross profit continues to improve substantially".
Earnings before interest, taxation, depreciation, and amortization remain similar to the year before, however, as Toople is continuing to invest in its direct marketing and sales.
"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," said Horsman.
Horsman noted while December is usually a month in which companies do not change service providers, its new customer sign-ups were more than three times higher in December 2018 than in December 2017.
Moreover, Horsman said January has also been a record month of net customer contracts, with Toople winning more than twice as many in January 2019 than in January 2018 and that its February 2019 contract wins were also more than twice as high as last year.
Horsman said the company's cash position is currently "in line with management expectations".
In addition, Toople has been re-evaluating its partnership agreements and has found this particular business area has been delivering low gross margins.
For that reason, Toople has decided to limit its new partnership agreements only to those that will improve its gross margin and to either renegotiate of terminate its old contracts as they come to an end.
Due to the number of new partners, however, gross margins are expected to improve over time.
Turning to Brexit, Horsman said while the UK's departure from the EU is likely to harm many businesses, demand for its fixed price telecom services is unlikely to diminish and could even be higher because the product lets customers "budget with cost visibility".
Toople Plc (TOOP)