Toople Plc (LSE: TOOP)
London Stock Exchange-listed Toople Plc is a Telecommunications Equipment provider. The group is headquartered in Burnham, United Kingdom. The group provides a range of telecoms services mainly to the UK SME market. Its range of services includes business broadband, fibre, EFM and Ethernet data services, business mobile phones, and cloud PBX. As on May 10, 2016, shares of the group were admitted to the main market of the London Stock Exchange for trading. The company’s outstanding market capitalisation stood at £3.32m with 1.14bn shares in issue.
Recently (on September 17, 2019), the telecommunications equipment provider, reported its trading update. It reported that the group has achieved solid growth in July-August period and added 1300 and 1000 new customer orders respectively in these months. The board of the management expects these new customer orders to deliver additional revenues over and above the £500,000 incremental revenues coming from contracts completed in May 2019.
Also, it announced that a new sales facility established in Durban, South Africa went functional in July 2019, and this is proving a significant achievement for the company.
Interim Results: H1 FY 19
During the six months under consideration, the group’s revenue surged by 57% to £1.08m in a year-ago period, driven by 169% revenue growth coming from directly contracted SME business, broadband revenue reported a growth of 159%, cloud telephony revenue surged by 82%, mobile revenue rose by 124%, however, the group's wholesale revenue reduced by 7%.
On a YoY basis, Toople’s gross profit recorded a growth of 150%, whereas the group reported gross profit growth of 72% against H2FY18. Also, the gross margin of the group surged by 7% against a year-ago period. Marketing expenditure surged by 80% on YoY basis and 102% on a quarter-on-quarter basis, which reflects an increased level of spending to support the growth of the business. During the period under review, the group won new orders and partnership continued, which was broadly in line with the management expectations.
At the end of the H1 FY19, the group’s cash position stood at £1.15m which was in line with the management expectations and adequate to support the business to continue with the plan outlined at the time of placing completed in September 2018.
Shares of the TOOP have delivered a price return of approximately 9.5% in the past five trading session and bagged gain of approximately 8% in a month time, while writing (before the market close, at 10:39 AM GMT), shares of TOOP were trading at GBX 0.285 and gave up 1.72% against the previous closing level. In the year-ago period, its shares have registered a 52w high of GBX 0.598 (as on May 08, 2019) and a 52w low of GBX 0.227 (as on November 01, 2018) respectively. At the current trading level, the stock was trading approximately 52.5% below its 52w high price level and 25% above the 52w low trading level respectively.
In the past three months, shares of the TOOP ended 19 times up, 20 times down and remained unchanged for 26 times, which reflects a moderate trend in the stock and also shows that liquidity in the stock is low.
Also, at the current trading level, the stock was quoting higher against its short-term support level of 30-day and 60-day simple moving average (SMA) prices but quoting below the long-term crucial support level of 200-day SMA.
From the volume standpoint, the 5-day average volume traded on the London Stock Exchange was substantially above the 30-day and 90-day average traded volume, and the price increase the stock has recorded in the last five trading sessions reflects that buying interest in the stock has increased.
Velocys Plc (VLS)
Alternative Investment Market-listed Velocys Plc is a renewable energy equipment manufacturer. The group is headquartered in Harwell, United Kingdom. As on November 20, 2008, shares of the Velocys PLC were admitted to the alternative investment market of the London Stock Exchange, and it is a constituent of the FTSE All AIM index and FTSE AIM All-Share- oil & gas. The outstanding market capitalisation of the company stood at £15.13m with 643.76 shares in issue.
The group recently in an exchange filing reported that it had bagged a purchase order and technical service order worth £0.4m to supply company’s Fischer-Tropsch (FT) technology, equipment, and reagent for a biomass-to-jet fuel demonstration unit of Toyo.
Interim Results: H1 FY19
As on September 18, 2019, the group reported its six months results for the period ended as on June 30, 2019. During the period under consideration, the group has achieved good progress in delivering the sustainable fuels strategy; the company recognised revenue of £22,000 vs £392,000 in H1 FY18. The revenue was primarily from the provision of engineering services and Catalyst lease revenue related to the ENVIA agreement. On 1 January 2018, the Company adopted IFRS 15. In accordance with the guidance in IFRS 15, most of the revenues of RRB will be recognised in future periods.
Operating losses during the period under review reduced to £5.2m (before exceptional items of credit £0.6m) against the operating loss of £11.0m (before an exceptional item of £14.3m) recorded in the H1 FY18.
The group’s net assets at the end of H1 FY19 stood at £628,000 against the net asset of £5.4m recorded at the end of the H2FY18, driven by cash spent on the development of the Immingham UK waste-to-sustainable-fuels project.
On a YoY basis, shares of the VLS have delivered a negative price return of 58.3%, down 51.5% on a YTD basis, declined 40% in the past three months and gave up another 6% in the previous five trading sessions. While writing as on September 27, 2019 (before the market close, at 11:41 AM GMT), shares of the of VLS were quoting at GBX 2.3135 and gave up approximately 1.55% against the previous day’s last traded level. In the year-ago period, the share of the VLS has registered a 52w high of GBX 6.65 as on October 16, 2018, and a 52w low of GBX 2.31 as on September 26, 2019, respectively. At the current trading level, its shares were quoting approximately 65% below the 52w high price level.
At the current trading level, shares of VLS were quoting substantially below its short-term as well as the long-term support level, which indicated a steep sell-off in the stock. Also, the 5-day average traded volume in the script was substantially above the 30-day, and 60-day average daily volume traded in the stock and prices are down.
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