Member Info for jointhedots

Are you referring to me? I never said it wasn't a valid topic, I challenged your explicit suggestion/inference that all customers had been lost (scaremongering)- do your research it to get up to speed and then enlighten us - then we can discuss, why should someone else do your research if it's your concern as a non-shareholder?

" I always thought reoccurring revs would underpin loop but they vanished? Happy to be corrected."

OK - I'll correct you - you're wrong on revenues vanishing, yes they have come under pressure but loopup still have thousands of business still taking their services and are locking in revenues with fixed term contracts. Also the CEO confirmed in his presentation he expects legacy business to continue to throw off cash for investment in the new strategy as spending in historical areas will be lower. After all lets not ignore the fact the company is in a transition phase.

This was always going to take some time SP movements are a little meaningless at the moment, ignore the trolls, it's all about the management, they need to deliver and that will determine if it's a £1 share or 1p share either price is a long way off - the capital raise has given them the cash for a couple of years. Steve confirmed in the presentation that they now had the capital to execute their MEDIUM term strategy

We are in the same place we were before the presentation, awaiting guidance.

Noticed over the weekend that there is pressure building on Boris to at least encourage Home working to stem the rise in Covid numbers. I doubt the government will go for another lockdown (they'll let people die steadily as long as the British public tolerate it), bat a recommendation to work from home would solidify the view that hybrid working is here to stay. Certainty is important to Loopup's customers

So my thoughts turned to what it would mean for companies planning to switch to Cloud Comms - would they speed up? When the lockdown was in place Loopup said many companies were reluctant to switch when there was uncertainty - so the past pace of business growth most likely bears no relationship to ongoing growth ( seen in exponential growth in the last reported figures) and the bigger companies at likely to contract later.

IMO at the top end they could be signing up 50 or more companies/quarter in 2022 and at worst maybe 10.

It's a massive unknown which Steve (though very positive) in the presentation, gave no clarity and admitted they didn't even know the pace of growth themselves. IMO that is the biggest barrier to new investors piling in, and I reckon though we may get a hint in the next TU, we are still a quarter or two from gaining enough clarity.

BeingTheBanker - what absolute drivel.

The company does not have a loss making pricing structure and have never suggested it is a problem for the cloud business, on the contrary they have said it is a massive opportunity.

When you have few customers and a massive sales effort during a growth phase it is obvious costs are not covered - but the business plan is not for steady state, it is for rapid growth in signing up profitable business, not buying it with cheap deals as competitors are doing. Even the majors and most other small companies lost money when growing their businesses - in fact many growing IT/Comms companies make losses for years and enjoy a great SP as long as shareholders believe in the business proposition and back it

You have no evidence whatsoever that the contracts they are signing are anything other than very lucrative with good margins and it's not very hard to get unit costs down, signing new clients does exactly that.

Bigsmoke - the pipeline is/was definitely growing but has slowed from the initial burst - I suppose there is a right size for it, it can't grow too much until they right size for the growth which will be ongoing (recruit staff and rollout infrastructure). All appears to be going great and I'm sure they can service what they currently have, but if they convert a good proportion of the £20 late stage negotiations and continue growing on that line then I suppose the support staff will have their hands full.

I suspect the sales staff will be maxed out dealing with the current enquiries and could even be deciding to no-bid on poor leads at some stage or they could end up overtrading (sales effort swallows up too much cash and they can't service anything properly) - they already appear to have made a decision to only go for large (ish) contract and just pick up the small ones, SME's if they fall in their lap. Nice problem to have though.

We can also assume some of the leads will have faded out or recognised as a waste of time (it's important they recognise those where there is no real intent to complete ) and some will have converted in Q3 - so the the pipeline is being refreshed/expanded IMO.

Keeping an eye on recruitment efforts, as some are doing, could provide a good insight into how well they are doing - those new marketing/sales jobs suggest there is high demand to service.

IMO what we really need to hear about is New clients then we can get closer to understanding the conversion rate.

barchid - your point is taken, I responded without going to the effort to check - I did look at all our big shareholders previously and probably muddled up the entities.

I'm sure one of the big shareholder did also practice shorting, it's all academic now though, the damage is done.

Existing, and if I recall correctly, when I looked at them long ago they are a VCT that also specialises in shorting.

The key word in your question is "Should".

Of course logically they should but MM's are a middle man and have a money-making agenda of their own, which may include not reporting trades or reporting trades which are in effect their own dealing or shorting. I'm convinced they sell to themselves or other MM's to create a narrative and move the SP. They've even been guilty of dropping the SP instantaneously to pick up stop losses (particularly in high churn sectors, e.g. Oil) - so a contrived sell or buy can deliver bigger profits in the long run. All that of course is my own honest opinion.

So trading often doesn't make sense, MM's can also hold up to 10% of the companies stock without any holding declaration - the result is notified Sells don't match Buys at times as MMs have skin in the game, a vested interest in hiding the facts and moving the SP (up or down).

IMO MM's are major instigators of negative sentiment and prone to amplify it to the max - with PI's constantly wondering why the market appears so illogical.

In recall one of Warren Buffett's famous sayings is "The market can stay illogical longer than you can stay solvent" - excellent advice for anyone considering leveraging or getting in too deep.

Yes - I'm just sitting tight and avoiding the sinking feeling on the basis the sellers are the idiots

Getting back to the more mundane operational stuff - wrt the new business they just purchased I reckon if they can't make significant money out of that business it's time to give up.

Looks like at the very least they have a good, working, marketable product, in the presentation Steve suggested the big players are still developing their offerings. They are really just at the start of their growth path and only have one salesman - at the very least Loopup has access to potential leads to feed them and more likely will instruct their own salesforce to highlight it as part of the overall platform - so could be a nice little earner and IMO equally valuable is the software development team they have acquired, who actually know about the business area Loopup operates in - knowledgeable IT staff are not easy to recruit.

They lost £400k at their last financials, but I suspect Loopup will turn that around in year 1 if the product is anything like as good as Loopup suggest it is.

If the sellers are genuinely sellers - then they must either be out of their minds to do so the in the midst of the new shares issue - why not before or after the dust settles?? I'll never understand, why buy in a placing??

The alternative which I think is more likely is they bought beyond what thy could afford, leveraged even took a T20 gamble that there would be a premium and need to unwind positions.

The MM's go through this routine over and over again and know how to fleece us - I'm glad I sat on my hands and have only bought a few more - I'm very tempted now though.

Pokerchips - exactly - it's a game that bears no relationship to the company's value or prospects.

When things settle could be up or down, I really don't know - but up 10%, 50% or even 500% are all possibilities. Nothing is inevitable about the future for Loopup.

This is being orchestrated, most likely led by MMs, they know some of the new buyers are uncommitted to holder past the end of the current session - just having a punt - less than £2m was raised on Primarybid and I suspect some of those know nothing about the company and will throw the towel in straight away (and good riddance) .

There is no comfort to be had, we simply grin or grumble and bear it or panic and sell - which is what I suspect a few will do - IMO they will regret it very soon.

It is always the case that speculators take a punt at thing like this capital raise and then lose it when the SP doesn't instantly go in the direction they envisaged - sadly there is no logic to it, but that's why AIM is so lucrative for some - simply because it is so illogical.

Once everyone has taken their position it will start to recover IMO.

Oops - my statement "the 70 customers is based on £00k/annum each and includes those already secured" should of course read

"the 70 customers is based on £100k/annum each and includes those already secured"

But it really does depend on the size of the clients, one large client is worth more than the small client equivalence at this stage as it is proof they can do it and handle the scale - and I suspect that will help immensely in selling to other bigger companies.

stew200 - of course it's not right and not that simple depends on the size of the clients, the 70 customers is based on £00k/annum each and includes those already secured, I suspect around 30 based on the CEO's presentation comments. That number is also based on the lowest value of the contracts, where in practice at least some of them will grow significantly towards the higher potential highlighted.

He was, to the best of my understanding, suggesting that figure was to cover all the Cloud financing cost and turn to profit on that aspect of the business. The other parts of the business are generating cash of 5 to 6 million in addition to the cloud.

Even if they don't cover all the capital costs of the Cloud expansion which is normal for a growth company they can generate a profit.

Don't worry about the SP now, it will settle down and hopefully be a springboard for a good rise - lots of good news to come now and a commitment from the CEO to improve communications.

The lead time issue is an unknown but it is clearly a long time and I suppose in some cases could be a very very long time, so pushes out the growth by whatever months over what was expected at the outset. But it doesn't stop growth, now they are on the growth trajectory the rate of change should be set (even if they don't quite know what it is).

He also reluctantly confirmed that there are more customer wins to be announced and suggested it was inline with the growth we would expect - so I take it to be at least in line with Q2. He also said they would need about 70 (£100k/annum) customers to start showing enough profit to balance growth expenditure (precise meaning was a little ambiguous). Adopting a conservative approach, if Q2 is simply mirrored going forward (in practice the company expects/forecast improvements in conversion numbers) they will reach 70 or £7m/annum revenue in just under a year from now.

IMO that is pretty impressive, to go from a standing to cover capital spend and start to profit in about 2 years.

BT are not an issue any more than other service suppliers, there are dozens of them, he just touched on the fact they have an offering because he was asked specifically (they were not included in the list of competitors) and pointed out Loopups MS expertise as a differentiator .

They can co-exist with big players and only need a small proportion of the business to be very successful, there'll always be strong competition that's why they a choosing a very specific target market of large enterprises/ multinationals.

The issue of competition and differentiating factors was very well covered in the presentation IMO.

It went OK, lots of potential and some contract wins not yet disclosed.

They also think the partnerships snowball open up the door to SME's (new area which they are not targeting directly) and a major revenue stream in the coming years.

So better than I expected and they answered all questions.

I've just noticed a new page of the partners section of the website, it pulls together lot of the details of the opportunity and Loopup's proposition/business case for potential partners.

Worth a read, but I suspect some of it will be recycled for today's presentation.

https://loopup.com/infographics/cloud-telephony/