Toople (TOOP ) has told investors that it is ‘generating momentum’ as more of the UK’s ‘well-known brands and businesses’ look to partner with the telecom service provider.
The Company has now secured a further five new contract wins with some ‘leading UK businesses across a variety of sectors,’ with the most substantial of the five selecting Toople to provide a range of services to a large building merchant with locations across England.
The unnamed merchant is ‘a well-established family run business with an illustrious history, and their locations include showrooms, trade outlets, tool hire and a large array of specialist building materials in various divisions including roofing, electrical, plumbing and heating.’
It said the merchant had approached its DMSL brand to replace its outdated telephone system and that its specialist team worked alongside the merchant, ‘in order to understand the business and to deliver the best and most appropriate communications solution.’
DMSL has now ensured that each of the merchant’s sites is now connected to cloud-based infrastructure, with multiple telephony in every site as well as high speed, high bandwidth data connectivity. The Company said its design will offer both flexibility and scalability.
Disaster recovery infrastructure has also been rolled out. The Company told investors, ‘With 75% of their business originating from telephone and online orders, the merchant could not afford the risk of continuing to rely on their existing unreliable and outdated technology.’
The Group highlighted that the new cloud-based telephony system covers the merchant's entire estate while the 4G backup solution extends to each of its internet connections. As a result, its business-critical services ‘are now always available to their customers’, it said.
In addition, Toople said it has won a five-year contract to deliver services to a business dealing in specialist and sports motor cars, ‘a trusted and well-known business which boasts a nearly 100 year history and provides a range of services to car enthusiasts around the UK.’
Toople said it has also been selected to provide cloud based VoIP services to a Yorkshire-based publisher of books chronicling Britain's industrial heritage; a ‘leading’ provider of hair and beauty treatments in the South of England; as well as a long-established computer service provider to the local community, businesses and industry located in North Yorkshire.
Commenting on the news, Andy Hollingworth, CEO at Toople, highlighted that these new contracts wins were “further evidence” of the momentum that the Company is generating.
"We are seeing a pattern develop where well-established and well-known UK based brands and businesses, who are also market leaders and/or specialists in their own sectors, are turning their backs on their old communications providers, and looking to partner with Toople.
The Toople brand is clearly strengthening among blue chip organisations with strong credit profiles as they recognise the strength of our service offering, good name and reputation and appreciate our ability to produce robust and competitively priced solutions,” he added.
Today’s news marks the third round of contract wins since the start of 2021 as the Company continues to add more commercial customers with increasing pace. Toople’s long-term outlook is expected to be largely underpinned by the UK Government’s commitment to roll out fibre telecommunication infrastructure to replace copper and upgrade the country’s network to 5G. Shares in the Company have increased by over 10% in the past week, with shares trading 5.88% higher at 0.09p this morning following the announcement.
Reasons to Follow TOOP
The company completed its “transformational” acquisition of DMS Holdings (DMSL), a firm which provides unified communication services in the UK, back in February 2020. Toople believes DMSL will accelerate its own positive cash generation and drive profitability.
The macro drivers for TOOPLE indicate structural growth opportunities across the SME Telecom markets. Its contract wins, and renewals point towards several compelling value propositions from the Company across broadband, mobile, and fixed line services.
Market Opportunity
In a recent trading update, Toople told investors that the macro drivers expected to precipitate substantial growth for the Group remain in place, particularly the UK government’s commitment to rolling out fibre telecommunication infrastructure to replace copper.
The macro drivers expected to precipitate substantial growth for the Group are said to remain in place, namely HM Government's commitment to the rolling out of fibre telecommunication infrastructure to replace the legacy copper infrastructure by 2025 and ‘the necessary and ultimately unavoidable upgrade’ of the UK’s network from 4G to 5G.
This forms part of the country’s efforts to upgrade its telecoms system to full fibre lines to deliver “gigabit speeds” following concerns that the UK has fallen behind other countries. The UK government aims for full-fibre networks to cover the entire country by 2033.
Openreach, which controls the UK’s telecoms infrastructure, is building full-fibre to over 4.5 million premises by the end of March 2021 and more than 20 million in the late 2020's.
Andy Hollingworth, CEO of Toople said this goal coupled with the impact of COVID-19 is driving the need for better remote connectivity and unified communications solutions.
“As full-fibre availability in the UK grows exponentially, our suite of services supports the transition to a full-fibre future and as the availability of fibre increases, so too will the number of new and expanded contracts for Toople,” he commented.
He highlighted the significance of this accessibility in a “new reality where employees can work from anywhere but must remain seamlessly connected to their colleagues and clients.” And said, “In light of societal changes to working practices, and technical upgrades to the UK's communications infrastructure, the long-term outlook for Toople is bright."
Strong Balance Sheet
Toople’s balance sheet is expected to provide it with greater flexibility to target additional organic growth opportunities across their target markets, which should lead to a positive outturn for FY20 and accelerate its path to profitability and positive cash flow in FY21.
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