Interim Results for the six months ended 30 June 2019

cloudBuy plc (AIM: CBUY), the global provider of cloud-based ecommerce marketplaces and B2B buyer and supplier solutions, today announces its unaudited interim results for the six months ended 30 June 2019.

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Key Points

Operational

• We have seen an increase in the number of CCG’s joining PHBChoices over the first half and this has accelerated in July and August with a related increase in the numbers of PHB holders now using the system
• We have developed a pipeline of additional eprocurement and digital prospects assisted by our presence on G-Cloud 11
• The Company Formations business was successfully sold resulting in cash receipts of £279K. This transaction continues our strategy of simplification, allowing us to focus on our growth sectors.

Financial

• Commentary is based on the Continuing Business which excludes the results of the Company Formations business for all periods.
• Revenue of £538K was an improvement of 11% (2018: £485K), as a result of an increase in revenue from PHBChoices.
• Our existing ecommerce and eprocurement customers continue to produce revenue and provide opportunities for growth, this is partially offset by the continuing reduction in revenue from legacy customers.

• Administrative expenses, excluding share based payments, decreased by 15% to £1,174K (2018: £1,374K), as a result of continuing tight control of costs in the business
• Operating loss, excluding share based payments was reduced by 28% to £652,000 (2018: £924K). Including share based payments, operating loss was reduced by 30%.
•  Net cash outflow from continuing operations including capital expenditure was reduced to £675Km (2018, net cash outflow: £874K), a reduction of 23%.
• New investment of £500,000 from Roberto Sella in March 2019 (2018 £nil).
• Cash and cash equivalents reduced to £1,031K at 30 June 2019 (30 June 2018: £1,605K, 31 December 2018 £791K)

Ronald Duncan, Executive Chairman and CIO of cloudBuy, commented,

“We have made progress in the first half of the year, with an increase in core revenue and a continuing focus on cash management and cost reduction. PHBChoices has contributed to the revenue increase and revenue from this area is growing.  There is evidence that CCG’s are under pressure to deliver more PHB’s and increasingly they are reaching out to PHBChoices for a solution.

Our existing customer base continues to provide consistent revenue and we have a number of opportunities for additional revenue growth from this group.  In Canada the success of York District School Board’s roll out of the eprocurement system has resulted in a second school board taking up the solution, as well as interest from other boards. There are 70 boards in Ontario that can use the solution under the terms of the procurement, and we are engaging with a Canadian reseller to pursue these opportunities.

Following the publication of G-Cloud 11 we have generated a number of enquiries about our solutions from a range of different UK public sector prospects, this has produced an early stage pipeline of opportunities. The opportunities cover eprocurement as well as digital citizen engagement specifically for Local Government organisations.

We received further investment from Roberto Sella in March 2019, and we appreciate his continuing commitment to the business.”

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About cloudBuy plc

cloudBuy, (AIM: CBUY), provides cloud solutions for buyers and sellers – and brings them together to trade securely and ethically via an increasing number of public e-marketplaces and private purchasing portals around the world, powered by cloudBuy ecommerce technology.

cloudBuy solutions for buyers help B2B purchasers understand and control their spend, to reduce costs and increase value. Our cloudSell solutions enable sellers of all sizes, from start-ups to corporates, reach new customers and grow their business.

cloudBuy’s technology platform powers web sites, public marketplaces and private purchasing portals that enable all types of online interactions and relationships including, citizen and business to government; consumer to business; and business to business.

For more information visit: www.cloudbuy.com 

CHAIRMAN'S STATEMENT

Revenue

We continue to focus on our key projects.

PHBChoices

This remains the main growth driver in the business. During the first half of 2019, there has been a demonstrable increase in interest from CCG’s as the requirement for personalisation in care has been driven by NHS England.  The NHS Long Term Plan was published in January and this strengthened the commitment to personalisation, Personal Health Budgets are a key method of increasing personalisation through patient choice.

The PHBChoices product has continued to be enhanced. To date, we are not aware of a competing product which shows the same benefits as PHBChoices including cost savings, greater visibility of spend, financial control and patient data security.

United Overseas Bank in Singapore

This project in Singapore continues to generate SaaS licence fees and revenue from paid enhancements to the system. A Chinese language version is due to be completed in the second half of 2019.

Ontario School Boards

Our project with the York Region District School Board in Ontario is live and producing ongoing SaaS licence revenue. Revenue from transaction fees is small but growing. The project with Waterloo Catholic District School Board has commenced and is expected to go live in early 2020.  There is the prospect for further school Boards through our new sales partner.

HealthShare New South Wales

This project in Australia has successfully completed its 3 year contract period. The contract has not been renewed so the second half will include lower revenue with no revenue in 2020.

University of Exeter

The system is live with ongoing SaaS licence fees and paid enhancements.

Other ecommerce customers

Our long term ecommerce customers continue to invest in cloudBuy products with our largest customer generating increased revenue in the first 7 months of the year.

Non-Strategic Legacy Contracts

Continuing the medium term trend, a number of our legacy UK public sector clients chose not to renew their contracts in H1 2019.

Financial Results

Commentary is based on the Continuing Business which excludes the results of the Company Formations business for all periods.

Revenue showed an increase of 11% with the reduction in legacy contract revenue being more than offset by an increase from PHBChoices.

As a result of the increase in revenue and a reduction in administrative expenses, operating loss, excluding share based payments was reduced by 28%.

Our operating cash outflow showed an improvement of 23%. Operating cash outflow was broadly in line with the operating loss.

Outlook

We expect revenue from PHBChoices to continue to grow in the second half and in 2020. Although at an early stage in the sales cycle, we are also seeing increasing interest in our product suite from UK public sector bodies where we can show demonstrable benefits based on existing and past customer projects.

It is expected that operating losses and cash outflows will continue to reduce during the remainder of 2019.

Ronald Duncan

Executive Chairman and CIO

20 August 2019