Time is right for LoopUp’s re­mote meet­ings revo­lu­tion

Au­dio con­fer­enc­ing play has highly im­pres­sive growth po­ten­tial

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Now with the Meet­ingZone ac­qui­si­tion bolted on, re­mote meet­ings plat­form

LoopUp (LOOP:AIM) has the scale to re­ally make the most of what we be­lieve is a sig­nif­i­cant growth op­por­tu­nity. Rev­enue is ex­pected to jump by 80%-plus over the next cou­ple of years (from this year’s an­tic­i­pated to­tal of around £34m).

This should trans­late into soaring earn­ings that will ef­fec­tively slash the price to earn­ings (PE) mul­ti­ple to be­low 20, on a 2020 fi­nan­cial year view, from this year’s 60-plus rat­ing.

LoopUp’s patented and cloud-based re­mote meet­ings soft­ware is de­signed to drag au­dio con­fer­enc­ing into the 21st Cen­tury. LoopUp’s key ad­van­tage is a stream­lined ser­vice for both hosts and par­tic­i­pants that not only works well but is in­tu­itive and easy to use.

That makes its pack­age at­trac­tive for cor­po­rate users ver­sus ri­val ser­vices from deep pock­eted ri­vals, such as Mi­crosoft’s Skype for Busi­ness, Ama­zon Chime, Google Han­gouts, AT&T plus more re­cent start-ups, such as GoToMeet­ing, JoinMe and the UK’s Pow­wownow.

LoopUp had in ex­cess of 2,000 cus­tomers be­fore it bought Meet­ingZone in a £61.4m deal ear­lier this year, and it is in the process of bring­ing on board those new clients to the core LoopUp plat­form.

IM­PRES­SIVE RE­TURN ON IN­VEST­MENT

One of the most ex­cit­ing data points is that for ev­ery £1.00 of one-off in­vest­ment in its sales and dis­tri­bu­tion it reaps 75p back a year. Ev­ery year. Churn, the mea­sure of cus­tomers leav­ing the ser­vice, is neg­li­gi­ble and is en­tirely off­set by up­selling into ex­ist­ing clients.

Es­tab­lished op­er­a­tions in the UK and US are now be­ing rapidly ex­panded via its lo­cal sales teams, or Pods. These are semi­au­tonomous units geared to hit am­bi­tious growth tar­gets, and in­cen­tivised as such.

Two of the nine Pods it cur­rently runs were vir­tual start-ups that will take a few months to get up to speed. That ex­plains while first half (to 30 June) or­ganic rev­enue growth of 22% looked slow com­pared to pre­vi­ous pe­ri­ods.

And LoopUp hopes to use its now set-up Aus­tralia Pods as a launch­pad into Asia in the fu­ture.

With rev­enues al­most ex­clu­sively of a re­li­able, soft­ware-as-a-ser­vice, re­cur­ring na­ture, the com­pany has a firm grip on fu­ture rev­enues. It also means that the LoopUp busi­ness model is nat­u­rally cash gen­er­a­tive. More than 70% of earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA), ad­justed for one-offs, are con­verted into op­er­at­ing cash flow. We would ex­pect that per­cent­age to im­prove fur­ther in time.

The stock has pre­vi­ously hit highs of 500p, af­ter join­ing the mar­ket at 100p in Au­gust 2016, but an­a­lysts pre­dict even bet­ter to come. The two bro­kers that cover the stock (Pan­mure Gor­don and Nu­mis) see the share price hit­ting 590p or 600p over the next 12 months or so, im­ply­ing more than 50% up­side. (SF)

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