Cloudcoco Group PLC (CLCO.L) Interim Results

CloudCoCo (AIM: CLCO), a UK provider of IT and communications solutions to businesses and public sector organisations, announces its unaudited interim results for the six months ended 31 March 2020.

Financial highlights

The six months prior to the period under review have been included for comparison to help investors gauge the initial progress the business has made since the completion of the acquisition of CloudCoCo Limited on 21 October 2019 and the introduction of a new management team.

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Revenue of £4.43m, up 44% against the previous six-month period (H2 2019: £3.08m, H1 2019: £4.18m)

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Recurring revenue of £2.79m, up 31% on the previous six-month period (H2 2019: £2.13m, H1 2019: £3.02m), a key focus for the Group in becoming a sustainable growth business

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Total contract value (“TCV”) signed of £3.33m, up 158% against the previous six-month period (H2 2019: £1.29m, H1 2019: £1.37m), reflecting early successes in prioritising multi-year over single-year deals

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Positive Trading Group EBITDA1 of £68k from a loss of £250k in the previous six-month period (H2 2019: loss of £250k, H1 2019: profit of £15k)

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Pre-tax loss reduced to £1.57m from a loss of £5.59m in FY2019 (H1 2019: loss of £1.21m)

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Cash at bank of £0.27m at 31 March 2020 (H2 2019: £0.31m, H1 2019: £0.84m) and £0.4m undrawn working capital facility

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Net assets of £5.69m at 31 March 2020 (H2 2019 negative £1.11m, H1 2019 £2.92m)

1 earnings before net finance costs, tax, depreciation, amortisation, plc costs, separately identifiable items and share-based
income and payments

Operational highlights

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Acquisition of CloudCoCo Limited on 21 October 2019

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Rebrand and change of name to CloudCoCo Group plc on 29 November 2019

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Refinancing of the Group’s debt reducing loan note debt from £5m to £3.5m and extension of new £0.5m working capital facility

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Appointment of new CEO, Mark Halpin, and CFO, Michael Lacey

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Encouraging early progress made against new strategy both operationally and commercially

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5-year cyber security management deal with a major operator of franchised car dealerships

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Voted Zen Internet New Partner of the Year

Post-period highlights

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Move to new Leeds office completed in June

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3-year cyber security management deal with major online fashion retailer, boohoo

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Resilient trading during pandemic but experiencing industry-wide headwinds

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Growing recurring revenue and margin, together with cost reduction measures means the business is well-positioned to withstand the current situation

Simon Duckworth, non-executive chairman of CloudCoCo, commented:

“The new management team has made a promising start, implementing positive changes across the business and making progress against all four of the objectives outlined at the full year despite the significant operational and wider economic challenges posed by the outbreak of the pandemic. There will be more obstacles to overcome as CloudCoCo continues through its recovery phase, but there is renewed optimism in the business, and a sense that after a prolonged period of instability the business is now on the right track.”

Mark Halpin, CEO of CloudCoCo, commented:

“We expect demand for our products and services to evolve as organisations seek to adapt to the ‘new normal’. IT and communications infrastructure is increasingly extending beyond physical premises and with that comes fresh challenges, particularly around cyber security and collaborative working practices. We believe that through our expert skillset and deep partner relationships with industry-leading providers, we are well-positioned to help organisations meet these challenges.

“While we should not lose sight of the fact we are still in the early stages of our turnaround story and recognise we are operating against a backdrop of unprecedented uncertainty, we have a talented team in place and are already seeing benefits from the hard work done thus far, which gives us confidence that our strategy is the right one.”


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