Andy Hollingworth, CEO of Toople discusses their Trading Statement

Andy Hollingworth, CEO of Toople discusses their Trading Statement which will see them achieving £1.6 million of Annualised Savings.

Trading and cost savings

Following the acquisition of DMSL earlier this year the management team undertook a review of the entire business and implemented a plan to restructure and reorganise the Group into four main brands: www.toople.com; www.dmsluk.co.uk; broadbandandphones.co.uk; and www.checkthatcompany.co.uk.  As part of this review, a number of initiatives were put in place to deliver cost savings and synergies to deliver in excess of £600,000 per annum.  The Board subsequently updated shareholders that cost savings and synergies would deliver over £960,000 per annum.  These have now been achieved.

 
The Company is pleased to confirm the integration and review of the combined group is now complete and the outcome of this activity has delivered an upgraded £1.6m of annualised synergies and savings, expected to be delivered from 1 October 2020.

This is expected to transform the company's cash position over time as DMSL in particular has a history of being cash generative, considerably accelerating the Company's anticipated timeline to achieve profitability and positive cash generation.  In the short term, investors should expect a decline in headline revenues as the Company moves to focus on margin enhancing customers and seeks to transform its cash position over the course of the coming twelve months.  The Group looks forward to updating shareholders in greater detail on these achievements in its Final Results for the year ended September 2020, expected to be announced during December 2020.  

Overall, the wider trading environment remains somewhat subdued for the moment, as it does for most businesses dealing with the economic effects of Covid-19.  The Board continues to monitor developments and will respond accordingly, as the Government introduces new measures relating to Covid-19.  Despite this, the Group and its various brands continue to perform satisfactorily and trading in August 2020 returned to more normal conditions in the B2B market as more businesses emerged from lockdown and reviewed critical expenditure such as for IT and telecoms.  Trading within the DMSL business demonstrated a 14% growth on orders on a like for like basis against August 2019 and September has also seen growth in order volumes compared with September 2019.

The macro drivers which are expected to precipitate substantial growth for the Group also remain in place, namely: HM Government's commitment to the rolling out of fibre telecommunication infrastructure to replace copper and the necessary and ultimately unavoidable upgrade of the country's network from 4G to 5G. The Board remains optimistic about the Company's future prospects.

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