Toople completes "transformational" acquisition of DMS Holdings
DMS is the holding company for Bishop Stortford-based DMSL, a firm which provides unified communication services in the UK. In the year to 30 April 2019, DMSL’s turnover was £3.1m, with a pre-tax profit of £331,282.
Toople believe that the cash generative position of DMSL will accelerate its own positive cash generation whilst also driving profitability for the company.
Upon its completion, the combined parties will be of larger scale which Toople believes will open up operational opportunities whilst eliminating the “historical reliance” on the market to provide funds for working capital.
Shares in Toople were trading 11.43% higher at 0.0975p during Wednesday trading.
“We believe that the combined business will now accelerate to EBITDA profitability and cash self-sufficiency, reducing the historic reliance on the market to provide funds for working capital,” said Andy Hollingworth, CEO of Toople.
DMSL, which acts as a BT Premier reseller and has worked with network providers including EE, O2 and TalkTalk Business, has multiple revenue streams with upfront cash and recurring revenue from its BT activities, the statement said.
Specifically, DMSL is responsible for over 250,000 BT customers and over 400,000 revenue generating units.
Toople announced the proposed acquisition of DMSL on 31 January 2020, the same day it unveiled final results which reported revenue growth of over 80% to £2.5m compared to £1.36m in the previous financial year.
“As well as bringing immediate cash inflow on a monthly basis, the acquisition should substantially de-risk the entire business model and can help accelerate cash conversion from customers,” said Hollingworth of the proposed acquisiton in January.
He added this morning, "We now look forward to integrating the businesses and capitalising on the strong operational and market synergies. We look forward to keeping the market updated on financial and operational progress in both businesses and the combined Group ahead of our interim results."
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