TIDMCLCO
RNS Number : 5633S
Cloudcoco Group PLC
07 November 2023
The information contained within this announcement is deemed by
CloudCoCo to constitute inside information pursuant to Article 7 of
EU Regulation 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 as amended.
7 November 2023
CloudCoCo Group plc
("CloudCoCo", the "Company" or the "Group")
Year End Trading Update
Performance in line with market expectations
CloudCoCo (AIM: CLCO), a leading UK provider of Managed IT
services and communications solutions to private and public sector
organisations, is pleased to provide an update on its trading for
the year ended 30 September 2023 ("FY23").
Highlights:
-- Revenue expected to be no less than GBP26.0m (FY22: GBP24.2m)
-- Trading Group EBITDA(1) expected to be in the region of
GBP1.9m (FY22: GBP1.6m)
-- Signed 42 new logo customers in the year (FY22: 39)
-- 110% increase in MoreCoCo ecommerce sales to GBP4.2m following
growth initiatives
-- Identified significant monthly cost savings and efficiencies
in acquired businesses
(1) earnings before net finance costs, tax, depreciation,
amortisation, plc costs, exceptional costs and share-based
payments.
The Group delivered a solid performance in line with market
expectations against a backdrop of a challenging macroeconomic
environment, with revenue expected to have increased to at least
GBP26.0 million (unaudited), growth of 7% over FY22. Trading Group
EBITDA(1) is expected to have increased by at least 18% to GBP1.9m
(unaudited). The trading performance has been supported by an
increase in MoreCoCo ecommerce sales and further cost savings and
efficiencies.
With a number of the Group's business customers closing their
operating locations, consolidating operations and reducing their
employee headcount, the Group has exceeded its expectations in the
number of customer contract renewals signed in the year, alongside
further growth in new customers. The success of MoreCoCo, the
Group's ecommerce website, is a particular highlight, with the
initiatives to increases visitors and conversions leading to a 110%
increase in sales to GBP4.2m (FY22: GBP2.0m) reflecting the global
trend towards a next-day ecommerce sales experience for technology
goods.
Despite the global economic and political challenges, the Group
continued to make significant operational progress in preparation
for an acceleration of growth when conditions permit. The Group's
sales and support functions have been reorganised and optimised,
enabling greater focus and collaboration across the different parts
of the business.
In line with long-term market trends, a key focus in the year
has been on strengthening the Group's Cybersecurity and Multi-cloud
practices through the addition of new talent and partners. The
Board believes these to be particularly attractive near-term growth
opportunities and is investing the Group's resources in order to
capitalise on them. Underlining our confidence in the opportunity
ahead, independent sources estimate the UK's cybersecurity market
to reach a value of $23.4bn by 2028, registering a CAGR of over
10%(2) . Similarly, the UK's multi-cloud computing market is cited
as the fastest growing in Europe, with the worldwide market set to
be worth $76.3bn by 2023, registering a CAGR of 28.3%(3) .
The Group's previously announced strategic partnership with
Ingram Micro has progressed well and is now contributing to the
Group's pipeline of multi-cloud opportunities.
Management continued to be proactive in reducing costs and
improving efficiency across the Group in the year. The newly formed
commercial team has reviewed all supplier relationships and
successfully reduced the number of suppliers from 450 to 220 while
identifying over GBP50k of ongoing monthly savings which will
further enhance our profitability in FY24.
Outlook
While the current economic climate will continue to present
near-term challenges, the work that has been completed to
streamline and focus the Group positions it well for continued
progress in FY24, particularly in the areas of Cybersecurity and
Multi-cloud.
In addition to strengthening our organic sales capabilities, the
Group continues to appraise opportunities to accelerate growth
through acquisition. The Directors are currently in discussion with
several parties regarding potential options to refinance or repay
its loan notes, which currently sit at GBP5.5m, ahead of the
October 2024 repayment date.
Mark Halpin, CEO of CloudCoCo, commented:
"It's been a challenging year as anyone in the industry will
tell you, so we're pleased to have delivered a performance in line
with market expectations while continuing to lay the groundwork for
our long-term success.
"We recognised the changing IT landscape was creating huge
opportunities in Cybersecurity and Multi-cloud and have responded
by bolstering our capability in these core pillars. Pipelines are
growing at a healthy rate as a result and we're confident in our
ability to gain further traction in FY24.
"I would like to reassure investors that refinancing the debt is
a key priority for the Board allowing CloudCoCo to continue to make
progress both organically and through acquisition towards its
ambition of becoming a GBP100m revenue company."
References
(2)
https://www.mordorintelligence.com/industry-reports/uk-cybersecurity-market/market-size
(3)
https://www.marketresearchfuture.com/reports/multi-cloud-computing-market-12222
Note: the figures for FY23 provided above are unaudited. The
Group expects to announce full audited results for FY23 in February
2024.
Contacts:
CloudCoCo Group plc Via Alma
Mark Halpin (CEO)
Darron Giddens (CFO)
Allenby Capital Limited - (Nominated Adviser & Broker) Tel: +44 (0)20 3328 5656
Jeremy Porter/Daniel Dearden-Williams (Corporate Finance)
Tony Quirke/Amrit Nahal (Equity Sales)
Alma - (Financial PR) Tel: +44 (0)20 3405 0205
David Ison cloudcoco@almastrategic.com
Kieran Breheny
About CloudCoCo
Supported by a team of industry experts and harnessing a diverse
ecosystem of partnerships with blue-chip technology vendors,
CloudCoCo makes it easy for private and public sector organisations
to work smarter, faster and more securely by providing a single
point of purchase for their Connectivity, Multi-Cloud,
Collaboration, Cyber Security, IT Hardware, Licencing, Support and
Professional Services.
CloudCoCo has headquarters in Leeds and regional offices in
Warrington, Sheffield and Bournemouth.
www.cloudcoco.co.uk
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END
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November 07, 2023 02:00 ET (07:00 GMT)
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