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CloudCall – H1 trading update emphasises board's confidence, but sufficient to make the shares a buy?

By Steve Moore | Wednesday 12 July 2017


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Shares in cloud-based software business integrating communications into CRM platforms, CloudCall (CALL) are currently accelerating beyond 100p on the back of a first half of 2017 trading update…

This emphasises “revenue up 40% vs H1 2016 with recurring revenue up 61%”, “available cash of £2.8 million” and sees CEO Simon Cleaver commenting “this revenue growth, combined with the strengthening relationship with Bullhorn, means that we are well placed to deliver substantial operational and financial progress in the current financial year”.

However, the share price sees the market cap now well above £20 million – with “revenues for the period are expected to be £3.2 million” and the £2.8 million “available cash” including a new revolving credit facility of up to £1.85 million (with interest set at 7.45% above 3 month LIBOR rate for funds drawn) – comparing to £2.3 million net cash at the end of 2016.

I also noted on those results that “continue towards its objective of reaching break-even” and “believes… sufficiently funded to deliver on the current growth plans leading to EBITDA break even” are far from definitive statements – reminding that prior new equity followed the company arguing just a matter of months before that its projection “clearly shows us having enough cash to deliver this company to break-even without the need to raise further funds”.

We now have “the pathway to EBITDA breakeven remains clearly within our sights”. Hmmm. There is appealing sales growth momentum here, but I’ll review the results announcement and look for further financial progress before reconsidering my stance of on the watchlist.


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