Toople PLC (LON:TOOP) Chief Executive Officer Andy Hollingworth caught up with DirectorsTalk for an exclusive interview to discuss what the company does, the launch of their new cloud business telephony service and why this product is good for their business from an investor point
Q1: Now Andy, for those investors that may not have heard of Toople yet, could you give us a quick overview of what the company does and how it differs from others?
A1: Yes, Toople.com came to standard list May 10th 2016, a very telco-specific business set up for small to medium enterprise businesses. So very very much looking at the gap in the market where there are 5.5 million small businesses with less than 50 employees and really looking at the biggest market share owner for in that small businesses in the incumbent which is BT which is approaching 50% market share. Those small businesses really get looked after really from, what we call, a prosumer point of view so it’s the big 6 players out there sort of giving consumer wrapped packages and dress them up as small business offerings which is not really apt enough for a small business where they want a number of different things, they want UK customer service, they want fixed transparency in pricing that they can budget and they want an ‘it just works’ philosophy.
Toople PLC is built on the basis of a Merlin Software platform which is a highly agile platform that sits behind our website. It allows small businesses to build packages online, to get quotes online and buy online and allows Toople to be a really highly scalable business and gives it a great appeal in terms of its transparency, its honest approach to pricing and its great customer experience to that small business market.
Q2: You announced today the launch of a new cloud business telephony service, can you explain what that does and how companies can benefit from it?
A2: Since launch, our first disruptive product into the small business was business broadband, both from a standard business broadband and a superfast fibre product, then we added an overlaid on top of that, some great mobile offerings using EE, o2 and Vodafone. This is really the last solution in the proposition from Toople which is using a broadsoft and a broadcloud platform, a hosted PBX, so that a small business can basically put a brand new phone system in that is using the cloud but obviously with great connectivity from Toople and mobile, they can then take the business telephone with them from a truly mobile perspective.
So, first and foremost they can get a brand new office phone system completely free of charge, they just pay a seat licence there’s no cost for the handset, and then secondly, if they choose to they can take an app on their phone, which is IOS or Android on their phones, and they can take their business functionality of their phone system with them when they’re mobile. That very simply means that the geographic numbers in the office will ring on their mobiles with the same functionalities that they’ve got in the office so it is a complete unified comms platform that gives them true mobility and doesn’t tie them to geographical locations.
Q3: From an investor point of view, why is this product good for Toople PLC?
A3: It’s good for the business because it’s a high margin product so gross margins are north of 40%, typically customers are contracting for minimum 36 months and it’s a great cash-generative product for the business as well. Whilst it’s an absolutely disruptive and valuable proposition for the small business in terms of no cost upfront, outlay in the seat price customers can take the phone or take the application without the phone or indeed take the phone, the application and all-inclusive calls package.
From a Toople perspective it is a very very gross-margin rich product, as I say, upwardly from 40% upwards but you’re providing them a complete solution which means the tenure customer, those customers are likely to stay with you for a long period of time rather than just selling them one proposition and one solution you just sell them connectivity. In 24 months’ time, they’ll look for the next best deal but if they’re taking connectivity, if they’re mobile and if they’re taking cloud-based hosted telephony, which we’ve launched today, you’re really delivering a solution for a small business, that means our customer attention rates and recontract rates will be some of the best in the market.