LoopUp has provided an update on trading to coincide with today’s AGM…in essence, the group continues to see activity “materially” above pre-COVID levels, and is confident of exceeding expectations for 2020. We choose to leave our forecasts (that we believe to be roughly in line with consensus estimates) unchanged for now, in advance of further detail likely with a fuller H1 update in early July.
Outperformance continues Today’s update does not contain any specific financial detail – other than to say that management now expects to exceed consensus estimates, based on trading which continues “materially” above pre-COVID-19 levels.
Forecasts and estimates Our estimates are reasonably in line with what we understand to be the consensus range, so it is likely that the company will outperform the forecasts below, although the exact quantum of the outperformance is not yet clear. We provided some mathematical analysis of the H1 performance in our previous note “Focus and execution” (11 May 2020) which suggested that revenue for March and April could have been around £6-7m per month, in order to meet the “at least 40% higher than the same period last year”. Clearly such levels of sales are unlikely to have persisted, but the group could still comfortably exceed our FY20 revenue forecasts even with a much lower (£4-5m per month) run-rate across H2. This would still bode extremely well for 2021 and beyond, as the group continues its focus towards professional services opportunities.
Reasons we are not surprised As described in our May note, we see a number of reasons that LoopUp’s offering is attractive to customers across a range of sectors. The key aspects relate to security, reliability and ease of use – important to all market segments, but especially paramount to Professional Services clients.
Too early to sensibly alter numbers Despite today’s upbeat message, we do not feel it would be wise to upgrade numbers in advance of the greater detail likely to accompany the July trading update – any change to forecasts at this time might risk implying a spurious degree of accuracy or confidence, and the July update is only around three weeks away.