CloudCall issues results and is “well placed to weather” the COVID-19 pandemic
CloudCall, the Leicester cloud-based software business, announced its results, with total revenues jumping 30% to £11.4m from £8.8m in 2018. In the US meanwhile revenues increased 56% year-on-year.
The results were for the year ended 31 December 2019, and the firm’s CEO says the business is “well placed to weather” the COVID-19 pandemic.
CloudCall also cut its losses from £2.5m in 2018 to £2.2m.
Simon Cleaver, CEO of CloudCall said: “During the first two months of 2020, trading was in-line with expectations, but with the escalation of the Coronavirus crisis in March and particularly since countries have been going into lockdown, we’ve started to see some new sales opportunities postponing decisions. This has been partially offset by a flurry of orders from existing customers preparing for their staff to work from home, but we expect this to be relatively short lived.
“Our products and services are extremely relevant in the current climate, particularly as they allow customers’ staff to work remotely with full access to systems that they would use in their normal place of work.
“Furthermore, as a SaaS company, a significant proportion our revenue is contracted, recurring or repeatable in nature, thereby providing us with strong forward revenue visibility. SaaS businesses incur the cost of development and acquisition upfront, but income is spread over the customers’ lifetime. There is therefore a balance between investing for further customer acquisition, investment in the product, and managing cash generation or burn.
“So, whilst income is relatively predictable, costs, are more flexible. Investment for growth can be slowed or accelerated relatively quickly as market conditions dictate. This can serve to reduce cash burn as needed and could be used to push a company to break-even ahead of forecasts. All options, of course, would have impact on future growth rates.
“In the current medical crisis and with our strong balance sheet, the Board is keen to stand by our excellent staff as much as possible, however we have already taken numerous decisive measures to significantly reduce current operating cash burn down to around £250k per month by May 2020 based on current activity levels and will continue to keep our operating costs under close review in the coming months.
“CloudCall is well capitalised and has the ability to reduce its cash burn relatively quickly. As the length of the current crisis is unknown, it’s impossible to accurately predict what the impact on our 2020 and 2021 revenues will be, but the Board is confident that CloudCall has sufficient cash to enable it to trade its way through this period of global uncertainty.”