CloudCoCo has signalled the business is continuing to look for further stabilisation after delivering its first-half numbers.
The firm reported an 11% increase in revenues to £14.3m, from £12.9m, with 62% of that total coming from managed services. Gross profit was flat at £4.3m, while e-commerce revenues from MoreCoCo increased by 125% to £3.6m.
The six months to 31 March also showed a continued focus on saving costs, with administrative expenses cut by 4% to £4.9m.
The first half of the fiscal year saw the business add 24 new customers, signing multiyear deals with a range of brands, including Support Warehouse, Allied Services and High Availability Hosting.
The business has also seen cyber security revenues increase, thanks to its ability to offer real-time threat reporting and management support. Its partnerships with Ingram Micro and Solace Global Cyber have also helped uncover more growth opportunities.
The tone struck by Ian Smith, consultant to the board and interim CEO of the group’s trading entities, indicated that it had made progress but the work on stabilising the business would continue.
“These interim results do not reflect the period of my tenure, but they do highlight a number of the challenges the business faces, which we will work on resolving to ensure the company can meet its liabilities and is able to look to the future with confidence,” he said.
Smith got involved with the business in April, after the first half period, when Mark Halpin stepped down from the board and CEO role. At that point, CloudCoCo reached an agreement with its existing loan note holder, MXC, to extend the redemption date of the loan notes to 31 August 2026.
In his comments accompanying the half-year results, Simon Duckworth, chairman of CloudCoCo, gave some insight into the current focus of the business.
“Ian’s initial remit is to carry out a full strategic review of the group, and to advise the board on where the value sits within the business and how that value can be maximised to improve the group’s trading performance and financial position. MXC remains supportive both as a shareholder and loan note provider,” he stated.
Despite the challenging economic environment we continue to operate in, we had some pleasing new business wins during the period and continue to build a solid pipeline
Simon Duckworth, CloudCoCo
“However, it is clear that the loan notes will not be able to be repaid within the required period via operating cash flows so we continue to work with MXC to find the best solution for the repayment of the loan notes,” he added.
The business operates across four main areas: managed services, infrastructure services, telecoms and product. Current efforts will include establishing which are core and non-core, and which will provide maximum value to the group.
“Going forward, we hope to be able to provide further reporting in each of these units. This work is ongoing and we will update shareholders as we progress. We understand this has been a prolonged period of uncertainty and want to reassure investors we are committed to navigating it with determination and transparency,” said Duckworth.
“In our daily activities, we are continuing with a business-as-usual approach, focusing on sales and pipeline generation across all of the group’s revenue streams. Despite the challenging economic environment we continue to operate in, which is impacting the purchasing decisions of certain customers, we had some pleasing new business wins during the period and continue to build a solid pipeline,” he added.
