Trading Statement

The People's Operator plc 

("TPO", the "Company" or the "Group") 

Trading Update 

The People's Operator (AIM: TPOP), the cause-based commercial mobile virtual network operator, provides the following update on its trading and operations for the 12 months ended 31 December 2017 ("FY2017").

The Company confirms that revenues for FY2017 will be approximately £3.55m, in line with management forecasts. 

Trading Update 

-     FY2017 average revenue per user ("ARPU") in the UK of £11.02 (FY2016: £13.22) for PAYG customers and £9.78 (FY2016: £12.50) for PAYM customers

-     FY2017 average revenue per user in the US of $20.15 (FY2016: $22.09)

-     Average customer acquisition costs remain low at £7.76 in the UK (FY2016: £5.70) and $21.71 (FY2016: $22.00) in the US

-     Overall Airtime margin for 2017 is more than five times that of 2016, reflecting ongoing reductions in wholesale rates

-     Year-on-year churn has more than halved in the UK and has declined by over 50% in the US

-     ARPUs in the UK were affected, particularly in H2 2017, through discounting via affiliate platforms. As confirmed below, such unprofitable discounting has now been discontinued

Work with 360i 

As previously announced, the Company is working closely with digital marketing agency 360i to redesign its customer acquisition strategies. In order to drive sustainable growth, the Company has focused on improving three core areas of its business.    

1.   Product and Experience improvements

The Company has focused on improving both its product offering and its site experience, to ensure its plans are profitable and that customers experience a frictionless user journey. This required a departure from unprofitable plans and marketing which denigrated the value of the TPO brand.

Areas of Focus: 

-     Removed Plans which did not earn profit 

-     Stopped all discounting through affiliate platforms which did not bring in a profitable customer base 

-     Optimised User Experience and Conversion Journey across both UK and US sites 

2.   Responsible Media Mix to drive traffic and sales efficiently 

Historically the Company had over-prioritised media channels which relied on unprofitable discounting to drive traffic. The Company has now diversified media investments and improved its targeting to ensure that any media spend is as efficient and effective as possible. Audience segmentation and site tagging now allow the Company to reach an in-market audience and retarget to increase conversion. Activity to date has been considered a soft launch. Now that both the UK and US site experience has been improved, we will be increasing our media spend considerably during February and March 2018.       

Top line Results (October 2017 to January 2018) 

UK site

-     The quality of traffic to the UK website has improved. In this time Bounce Rate (the number of visitors navigating away from the site after a single click) has improved by 30%, and people visiting the site are spending more time and visiting more pages. This has resulted in an 88% improvement in Conversion Rate. 

US site

-     The US site saw a similar increase in quality and conversion. The majority of media support in December was put on hold until the new site went live on 6 February 2018.  Now that the improved site is live, media support will be resumed and the Company anticipates major improvements to both traffic and conversion metrics by the end of February 2018.   

3.   Strategic Partnerships to fuel long term growth 

Staying true to the Company's strong belief that its customers will always be its best advocates, we are investing in strategic partnerships with Charitable Organisations and Platforms. This will introduce TPO to new audiences which are receptive to its unique market proposition. These partnerships will become a major part of TPO Mobile's marketing plan moving forward.

Current Partnership discussions Include: 

-     Charitable Partnership with one of the world's largest and most respected registered charities to increase donations and complement the organisation's efforts across the US and UK

-     Product Innovation in Partnership with a major Social Network to involve members of the online community in a tailor-made product offering

-     Influencer Marketing, using influential people to help spread our message in an authentic way

Financial Position 

At a General Meeting on 22 December 2017, the Company's shareholders approved a placing of new ordinary shares at £0.001 per ordinary share. The Company had originally sought funding of £2m and succeeded in raising total gross proceeds of £2.82m. The Company also issued a half warrant attached to each ordinary share, exercisable subject to share price performance and expiring on 28 May 2018. 

Whilst there is no guarantee that the necessary share price target will be attained, should the warrants be wholly exercised then the Company will be in receipt of gross proceeds of a further £2.82m.

The Company will provide a detailed update on performance during Q1 2018 on the release of its 2017 final results.

For further information 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.