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LoopUp enjoys stellar first half as new acquisition dials in

New acquisition MeetingZone is settling in better than expected, while the underlying LoopUp business is also performing well
remote meeting
LoopUp snapped up MeetingZone for £61.4mln in June

Remote meetings firm LoopUp Group PLC (LON:LOOP) is on track to meet market expectations this year following the acquisition of MeetingZone which is settling in better than had been expected.

The £61mln deal, completed in June, has been hailed as “transformational” for the AIM-quoted company, having brought a “material increase in scale” to the group.

READ: LoopUp’s price target whacked up to 600p

That was reflected in the unaudited first-half performance, with LoopUp generating sales of £12.0mln (H1 2017: £8.7mln), including almost a full month from MeetingZone.

Organic revenue, which strips out the impact of the acquisition, also jumped by 22% in the opening six months of 2018, largely thanks to a strong performance in the UK and US. Organic margins were slightly ahead as well at 77.2% (H1 2017: 76.8%).

Going back to MeetingZone, LoopUp’s management had initially expected the new purchase to generate cost savings of approximately £0.5mln this year and at least £2.8mln in 2019.

“The board is now pleased to report that it expects to deliver cost savings greater than previously stated and on a quicker timescale,” read a statement this morning.

The company is now forecasting savings of £1.3mln and £3.2mln in 2018 and 2019 respectively. The one-off cost associated with implementing these cost savings remains at around £1mln.

Underlying business performing well, too

“This has been a transformational period for the group,” said co-chief executives Steve Flavell and Michael Hughes.

“The reorganisation of the combined group has progressed ahead of schedule. This has freed up additional cash to reinvest in the business to drive organic growth through the expansion of LoopUp pods and our marketing activity, in both existing and new geographic markets.”

“Looking ahead, we continue to see excellent demand for the LoopUp product and we remain confident in our ability to deliver strong future growth and meet market expectations.”

Helping to underpin those expectations is the firm’s Australian unit. The sales teams there have been un “pipeline-build mode” over the past six months, but 20 new accounts have now been closed and are ready for rollout in the second half of the year.

At the end of June, the group held £5.8mln in cash and had net debt of £11.2mln. The full set of interim results are due to be published on September 26 2018.

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