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Oh yes I agree. There's plenty. The markets a wierd game.
Revenue hasn't really increased at all this year though and that's my concern. Theyve added 2 businesses together seen revenues drop and losses increase.
When does it end... itl end at another dilution requested at the AGM. Of course with Covid theyl also escape any sort of shareholder questions too so it will get waived through.
Only 6 months cash in the bank.
Interesting question, Indeed online is poor, they've recently re done their website, so maybe things might improve again. Although it still focuses on the wrong customers by advertising cheap FTTC as the header.
Prior to DMSL they spent and wasted alot of cash acquiring poor quality customers, those that brought on price on comparison websites. This is now killing them with bad debt, the writing was on the wall from day one. Expensive to acquire them, and even more expensive with them.
Without a sensible approach to the way forward I cant see any profit in the next 3 years. Whats a sensible approach?
Ditch all none direct debit low ARPU customers asap. Thats where your bad debt comes from.
Stop focusing on that business, just don't sell it,
For a PLC, Id probably reintroduce a channel model, but without an edge they cant move it.
Invest in some sort of hosted telephony to challenge the incumbents like they wanted to, plenty of options to increase margin on hosted and SIP, you don't have to resell Gamma/Horizon all the time. Dont go Broadsoft, do something different.
Bring in some good quality sales reps from competition, target less deals but large ARPU, Leverage the PLC status, big wigs like other big wigs. One deal for 200 seats is another world to selling an FTTC. Bigger customers, less support, less staff, reduced cost. Its easier to support one big customer than 20 smaller ones for the same revenue. They wouldnt need South Africa if they didnt sell to consumers and Micro SME which was Andys focus. Micro SME is sub £100 ARPU.
Probably look for further acquisitions, they cant go big for risk of RTO. So they have to stay sub £2m. I know of at least 6 under that threshold that being on the markets would assist in fund raises, and they could complete quickly. If they can do 2 or 3 quick acquisitions then they could turn it round. Theres at least one £10 Million Rev Telco on the market at the moment, Makes £2million Ebitda. Maybe its worth the RTO.
It needs £6 or £7 Million in TO to general profit, DMSL revenue will never grow, If BT give them the territory unless they gain territory they are stuck with the same customer base on long 5 year commission cycles from BT. Therefore the focus has to be on proper revenue growth from their own billing. Use the margins from easy wins on the BT side to pay for the better deals on their side.
A private Telco on £7 Million should be making 10% Ebitda at the very least. Of course PLC costs equate for probably £450k so its a breakeven target. However their contract notice RNS's scream small fry, until they mention a ££ in one, you know its small.
Dancy, Still no examples, Every man and his dog knows someone... Even the ones you have loosely mentioned are between 3 and 7x bigger than Toople is right now.
The issue is PE will never buy Toople off the market... theyd over pay, it has nothing exciting going for it especially now its back to a commission only house from BT instead of doing its own billing. Therefore comparing a Privately acquired PE deal with no specifics to TOOP still doesnt really act as a fair comparison.
The businesses your comparing against, I bet they dont get 50% revenue from commission from the UKs incumbent do they? At £5m plus Telcos provide proper telephony systems, complex installs and focus. I know, because like you Im at a similar size.
What do Toople do? Resell BT, or sell FTTC or ADSL? It doesnt stack up does it?
If we look at the figures,
£3.4 million, 7 months of DMSL is £1.8 Million. 90% of which is from BT (Based on their RNS Releases) that leaves £1.6 Million of Tooples revenue, which theyve acknowledged has £1.1 million of bad debt... You dont win the right customers on comparison websites, and you cant compete with BT when reselling BT.
Sorry your completely wrong.
Comparing a PE purchase of someone like Daisy or Kcom, which PE would be interested in, against a mainly BT reseller, that has no infrastructure is ludicrous.
Can you give any examples of a telco at the same level as Toople, selling for 7 to 15x?
They over paid at 5x for DMSL. This is valued entirely at the right money at the moment, little prospect of significant growth compared to others in the sector who are innovating.
What differentiates Toople from any other reseller out there? For Years AH battled saying BT are expensive, BT offer poor service. Then he brought a BT reseller where 90% of their revenue was commission from BT.
If you analyse the GP growth it's not as you seem.
Most of DMSL revenue is commissions paid by BT.... a Commission is a 100% GP product...
Toople as standard is billing their customers hence its lower.
Do you just want a BT reseller? Or do you want a proper Telco billing their own base. I know which Id prefer.
Toople haven't invested in product to increase GP eg their own products or services, the rise in GP is artificial based on the DMSL
i) the customer is owned by BT and DMSL receives upfront and ongoing remuneration from BT, representing approximately 90% of turnover; and
"Group revenue grew year on year by 40% to £3.4 million with a seven months' contribution from DMSL"
Last year they did £2million
This year they've had 7 months contribution from DMSL which was £3.1 Million TO on acquisition. So £1.8 Million.
Combined. £3.8 Million vs £3.4 Million.
So either DMSL has dropped, or Toople has dropped... Which one is it?
Buried Deep in the deal....
They lost £2.4 Million,
33% of revenue was bad debt, up significantly from last years results
The loss per share was 0.09p matching our half year results of 0.09 in 2020..... so DMSL had no positive effect on losses despite this magical £130k a month synergy saving..
If that saving equates to £1.6 Million... and they are STILL losing £1,3 million, then I cant see how this is a positive at all.
Good dressing up, Good PR, Poor results, Not transformational.
"As a result, our operating loss was £2.4 million compared with a loss in FY2020 of £1.6 million, but this includes the bad debt costs of £1.1 million. Active cost controls led to a 23% reduction in marketing costs, reflecting our change in strategy, with more focus on DMSL business and recognising the COVID-19 impact, discussed above. Consequently, administrative expenses only increased by 8%, despite a 40% increase in revenues.
Cash at bank was over £568,000 at period end and total assets increased substantially due to the DMSL acquisition, increasing to £2.8 million (FY2019: £1.3 million). Our balance sheet was further bolstered post the year end in October 2020, when we raised a further £774,000 (before expenses) via a Placing. This leaves the business with a healthy cash position and a substantially improved balance sheet to navigate any potential economic uncertainty in 2021. The loss per share was 0.09p matching our half year results of 0.09 in 2020.
Having acquired DMSL in February 2020, we quickly integrated the business and identified substantial cost savings and synergies. We initially guided that we expected savings in the region of £50,000 per month, but I am delighted to report that these are now running in excess of £130,000 per month, saving the combined business £1,600,000 on an annualised basis. "
Where do you get that from, the link provided states
29,571,605 Ordinary Shares in issue (noting any held as treasury shares) and, insofar as it is aware, the percentage of AIM securities that is not in public hands is 33.3%.
Down in flames... Looking at the sales pricing yesterday Id say they sold for profit... isnt that the name of the game?
Which is fine, the issue I have is people dont do their own research, they see ridiculous hype and valuations and buy... get spiked... and lose money.... perhaps 2 hours research would have been more useful..
Im still interested to know where you saw profits?
I mean it could have been on honest mistake, but then he followed it up with
"History of price of stock and company, profits and future growth"
There has been no profits...
Growth is based on winning small multi store contracts with "super fast broadband" which is a FTTC or FTTP at £50 a month, which they are no longer billing because they are reselling BT, so they actually just see a commission on the £50 now, not the full revenue in their accounts. This means you will see a stagnation of growth during the migration period, albeit most Bt resellers are paid the full commission of a deal upfront, which might prop up revenues...
History of the Stock Price.... Where do we go with that? How far back did he look? October? It hit 0.16, during a mass ramping and was 33% down within days. If you got spiked... your now nearer 50% down. The time it hit that before was January, when there was significantly less shares about and we've had dilution since then...
That doesnt make any sense though,
Its currently priced at £0.00097, so your minimum makes it worth 154x its current mcap? This is a business turning over less than £10 million with little in the way of assets, wheres the value and how does the market have this wrong?
Its never made a profit
Its growth isn't mind blowing
Please explain your research properly, instead of just ramping it? Come on... Please
You do realise upgrading from standard to superfast broadband is simply moving from ADSL to FTTC or FTTP....
They are not going out digging up roads and upgrading cabling which is what the government is spending billions on....
Is it really a positive being a BT reseller?
How many other BT resellers do you see of any particular size? DMSL was probably one of the bigger ones... You wont hit 100m in revenue earning a commission payment on sales.
Toople need to bill revenue not resell BT and act as an agent, its going to destroy any likelyhood of growth.
Theyve all but given up on Merlin...
May 2019 RNS
"Merlin provides an end-to-end automated process that allows customers to place orders easily and enables the business to grow its customer base, without the need to scale expensive resources. This helps support one of our key differentiators – quality of customer service."
May 2016 video interview
Hollingworth says its Merlin software platform which delivers automated telecom services is unique and will be able to personalise the choice of service for SMEs, filling a "huge gap" in the market.
Now they are not growing their base, they grow BTs, they now use BT systems, not their own, bonus BT support, does that mean they can close down the SA office?
The so called automation has gone, the website no longer plugs into Merlin, from what ive heard, Merlin isnt even being used internally.
Personalise the choice for SMEs.... now, on their website you can have BT, Plusnet (BT) or Toople... you can have BT Cloud, Vonage or Gamma Horizon....
Theres no choice for SMEs here at all, its the same reseller set up as the 100s of others registered with Ofcom, atleast when the sold rebranded Talktalk connectivity, they billed it out. Now they seem content on having BT bill the lines and taking a commission eg the DMSL route, which until the year they sold (as they stripped out marketing to get to a positive EBITDA) didnt make any money.
Telco is booming, people are buying, deals are being done, using Covid as an excuse for small deals that should be bread and butter is just that, an excuse