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That was always going to be the case, as the forecast was too conservative. Very impressed by the drop through of incremental revenues to profit and the increased gross margin, but to honest I was expecting a bigger top line number as they said in April that YTD sales then were >40% higher than LY. That implied that March / April were running close to 100% higher as Jan / Feb would only have been modestly up. Overall pleased, and very encouraging for the open today.

Interesting link. It shows what an attractive investment Loop is, as it should deliver strong profit growth on the increased sales. In comparison Q1 sales at slack increased 50% and the operating loss doubled.

Followed by a £40K buy today

I was very pleasantly surprised at the resilience of the business, and to continue paying a dividend is a real sign of confidence. Management have moved decisively to address problem areas over the past couple of years and have responded promptly to covid challenges. This is a good business with good management and its prospects are attractive, with long term infrastructure spending likely to grow and, in the near term, likely stimulus programmes providing some protection against any post covid economic slowdown. Very happy to hold.

For me the most important part of the results was:-
"Cash generative and profitable in the first months of the new financial year".

I've held RNO for a while but sold down some on the way to 8p. My concern was whether they would survive but I'm feeling more optimistic now. If they can generate cash and report a profit over April / May, then I suspect they'll make it through. From a valuation perspective how the pension deficit moves on assets prices / bond yields will be a key factor. Difficult to say at the moment. But I can see this getting back to 20p or so over the next couple of years.

Suspicion borne out of being burnt too many times.

Interesting timing for the RNS on the issue of options to management. Companies usually stick to a similar calendar but the options grant this year is a week earlier than last year. I might be reading a little too much into this, but I wonder whether another trading update might be imminent, on the back of May's trading, that could move the price higher, so management have locked in options at yesterday's price of 110.5p?

I'm in the same ballpark as you for the full year. The real driver for share price appreciation though will be what happens in 2021 and beyond, which is still unclear at this stage. Hard to say whether 2021 will be up, flat or possibly down on 2020 at this stage. I expect that this uncertainty will stop the share price really breaking out until things settle down and a new normal baseline is established. One thing I saw over the weekend was the government in the UK thinking about enshrining a right to work at home in law. This will certainly help in the medium to longer term.

As some semi successful investor once said, in the short term the market is a voting machine but in the long term it's a weighing machine. Expectations can and do drive prices, but ultimately the fundamentals have to deliver.

Personally I think their forecast changes are cautious.

They suggest FY2020 increased sales of £7.7m v 2019. Based upon the RNS I suspect that Loop are up £5.5m through April, and with monthly sales probably running more than double last year at the moment this will probably be >£9m by the end of May. Allowing for some stickability of increased customer numbers and working from home patterns H2 sales must be at least 10% higher than last year. So I'm hoping that their revised forecasts still materially underestimate likely performance.

Hughster, I love your optimism. Whilst it would be great if we get incremental sales dropping through to EBIT at their gross margin of 66% any sense that these levels of activity are sustained will mean some extra overheads will be needed to support the enlarged business. I'll be happy for a drop through of 50%, which is still excellent. And although I think the current events will have a residual benefit of increased home working etc it wouldn't surprise me I revenues are flat / dip slightly in 2021 once the abnormal level of home working recedes. And the competition will enhance their offerings, especially the big players. I do think the prospects are exciting, but don't see a £5 price in the near future. After today's RNS I've tweaked my valuation up to £3 on a 12 - 24 month view. LOOP could also be an attractive M&A target that might spur the price up a bit further, but you can't bank on that.

Yes, very good news and reassuring that there has been a tangible positive impact sufficient to give management the confidence to give the update. Given the timing of the working from home initiative my fag packet maths suggests that April has probably seen revenues more than double last year. I particularly like the overheads broadly in line with expectations, which suggests the drop through to EBIT could be 50% if gross margins have remained stable. So by my estimate >£2.5m more profit than prior YTD. This should flow through into cash next month as the debtors convert into receipts. Obviously this is unlikely to last the full year but another couple of months at these levels and I can see EBITDA of £15m, EBIT of £10m + for the year. Activity levels will see some consolidation next year, but at a higher level than the historic base. What a great way to start a Wednesday.

Ragnarlothbrok, given the scope for some margin recovery after integration issues and the operational leverage here it would be a disappointment if EBITDA was only 20% higher. They had planned to shift £1m of sales admin costs into R&D which will also flatter EBITDA assuming they capitalise the costs. As you say, getting some indication on trading, even if it does not provide any FY guidance, will be helpful.

I agree with a lot of what you say, but if trading is materially ahead they are obliged to provide a trading update. Absence of a trading update until July therefore indicates no material uplift. I agree that their core M&A related activities will have declined, but I would expect general use by professional services firms to have increased, plus I suspect there is now a lot of legal work going on regarding re-financings, loan renegotiations, potential administrations etc. I also expect that they will have increased client numbers and overall would be surprised if they aren't experiencing a material activity increase. If they can't benefit now they never will.

The cynic in me also wonders whether they are in no rush to put an RNS out as they normally price option grants in early June, if they operate similarly to last year's timetable. As they have already had historic options cancelled and new ones issued in March at 75p I would be extremely disappointed if they were playing this game.

I wouldn't worry about the RNS just yet, as they'll want to see how things have improved over a reasonable period of time to be able to say anything meaningful. Given they are an on demand service they don't really have an order book they can use to quantify current / potential activity levels. As a minimum I expect they'll want to see at least a month's improved trading before issuing any trading update. I therefore am assuming some news relatively soon on the back of April's activity levels. And then we'll see what the activity uptick is - I think 3x might be a bit over optimistic, given that Loop is a niche player and not a freely available general social tool like Zoom. If they don't say anything in May, my concern might be the uptick isn't as material as we might expect. If trading had materially improved they have to update the market in line with LSE rules. And the institutional investors are unlikely to let management take this private on the cheap.

The billion used is 1,000 million, so the reality is that Zoom is trading at a completely barking mad price at 65x last year's revenues. As a comparable valuation its meaningless. I'd love LOOP to have the potential to be a £10 share but it's going to have to grow massively to justify that, probably to revenues of £180m or more and delivering an EBIT margin of 20%. This will take quite some time, as after the covid boost to activity levels there will be a period of consolidation and I anticipate 2021 revenue being below that of 2020. I'm also not sure how big Loop's natural niche is - don't forget there are a number of global players with similar (perhaps not as good) solutions that they are currently offering cheaply / free. I'd be happy for this to get to mid 2's in the next 12 months, and then see where it might go. Can't wait to see an RNS to begin to understand what the new future might look like.

If volumes have risen as materially as we expect then I hope we see an RNS by mid May giving some quantification of the impact through the end of April, and this is what's needed to spur the price on from here. If we don't get an RNS by the end of May, I'll begin to worry that the COVID effect isn't as pronounced as we think. I think we'll get the RNS though.

I guess the profit taking is no surprise given share price performance over the last week.

It's hardly a scientific sample but I noticed there has been a significant increase in the number of Loopup reviews on Gartner's peer insight page for meeting solutions. There are 36 reviews dating back to June 17, but 10 have been added in April 2020 alone, at least anecdotally indicative of client progression. Ratings and comments appear reasonably good too.

https://www.gartner.com/reviews/market/meeting-solutions/vendor/loopup

Other retailers have already indicated they might not reopen some of their poorer performing stores so it wouldn't surprise me if Dixons also decided to close a few more (over and above the Carphone Warehouse closures) when they do reopen. I'm impressed by the resilience suggested in the trading update, both online and the Nordics. It suggests that the risk of DC. failing is now very slim. Get to at least cash breakeven in the near term and then take advantage of the slow recovery.