Toople sees record new customer numbers as it focuses on SMEs

Business telecoms provider Toople reported “tremendous progress” in recent months, it said on Friday, with shareholders being told that recent strong growth proved its strategy was working.

The London-listed firm, which was holding its annual general meeting, said that it has continued to grow its customer base every month, as as a result its revenues were also growing across a number of its business segments.

Non-executive chairman Richard Horsman said gross profit had continued to improve “substantially”, and EBITDA remained largely similar to last year, as the company continued to invest in its direct marketing and sales operations to “lay the foundations” for future sustainability and growth.

Toople’s cash position remained in line with management expectations.

“December is typically a month where SMEs do not change their service providers, however we experienced a strong month in December 2018 with a large number of new customer sign ups in excess of 300% when compared to December 2017,” Horsman told investors.

He said 2019 had started in a similar fashion, with net customer contracts won in January setting a record at 242% of the prior year’s level, and February seeing 243% of the figure last year, showing “significant progress” in Toople’s key metrics when compared to last year.

“Our success is being driven by our digital marketing strategy and the investments we have made in this area are clearly paying off,” Horsman said.

“We continue to offer premium quality customer service and our customer satisfaction scores are outstanding compared to other well-known UK providers.

“The increase in costs from our investment in bringing the sales team in-house and in digital marketing are largely being offset by an increase in lead conversion and sales.”

The majority of those new clients were on two-year fixed contracts, giving the company “clear visibility” of earnings, Richard Horsman explained.

He said another growth driver for the firm was its partnership agreements.

“We have evaluated this area of our business including an assessment of all our legacy contracts as historically, this area of our business has delivered low gross margins.

“Our strategy is to only sign new partnership agreements that deliver gross margin improvements.

“Furthermore, as old contracts come to an end we are either renegotiating or terminating those agreements.”

During the year, the company had continued to sign new partners across a variety of sectors, Horsman claimed, and it expected to see overall gross margins in that area improve over time.

“I am pleased to report that the £3.5m contract win announced on 29 August has now integrated the Toople Merlin billing and provisioning platform into its business, and the first batch of customers have successfully completed billing.

“The second batch of customers is expected to complete provisioning and billing during April.”

Finally, Richard Horsman told shareholder that, as Brexit loomed, the company would continue to focus on its core UK small-to-medium enterprise customer base.

“Whilst Brexit may have an impact on many businesses one thing remains the same - SMEs will all continue to need, maybe more than ever, a simple and easy bespoke fixed price product that gives them exactly what they need, backed by top quality customer service.

“Our fixed price telecom services, which allow our customers to budget with cost visibility and our unrivalled customer service is increasingly attractive to the market and is becoming business critical as SMEs face so much wider uncertainty.

“We are proud they can rely upon Toople.”