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CloudCall repeats backing for Xplorer Capital offer as FY loss predicted to be less than forecast

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CloudCall Group PLC (AIM:CALL, OTCQX:CLLLF) said it continued to recommend a 81.5p a share cash offer from Xplorer Capital and forecast underlying losses for 2021 will be slightly below its previous forecast due to reduced costs.

Trading for 2021 was in line with management expectations and total revenues met its revised guidance, the cloud-based software business said in a statement.

Total revenues increased 15%, or 18% at constant currencies, to £13.6mln. Recurring revenues grew by 15% to £11.9mln compared with 2020, driven by a rebound in the staffing and recruitment sector, which represents over 50% of the CloudCall’s revenues.

Annualised run-rate revenues (ARR) grew from £12.2mln exiting 2020 to £15.3mln at the end of last year, an overall increase of 25%, or 27% on a constant currency basis, on the back of strong new business sales, robust Software as a Service (SaaS) metrics and a net customer retention rate of 101%. 

Total customer numbers grew by 12% to 1,658 last year. The group had net cash of £2.7mln at the end 2021.

READ: CloudCall agrees takeover by Xplorer Capital

CloudCall chief executive Simon Cleaver said 2021 marked a return to growth for the company following the impact of the coronavirus (COVID-19) pandemic in 2020.

“I was delighted to see strong performances from new business sales, existing business upsell, and customer retention combine to drive our annualised revenue growth back over 25% as we enter 2022,” he said.

But Cleaver noted the company is operating in a market where many key competitors are larger and better capitalised than CloudCall. 

If it were to remain a listed company, CloudCall would need to raise “significant” further capital to achieve its target of monthly EBITDA breakeven in 2023, which could be difficult. 

“I remain passionate about CloudCall and our team, but, given the conflicting sentiment between shareholders that prefer growth vs those that prefer us to push for break-even, I believe a future capital raise from the public markets may be challenging. In addition to this, the quantum of any fundraise will not go far to redress this imbalance between us and certain of our competition,” Cleaver said.

Against this background, the board of CloudCall believes the offer from Xplorer Capital “is in the best interests of CloudCall shareholders and staff”.

Story by ProactiveInvestors


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