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Friday, November 22, 2019
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Netcall is a fallen Angel

Netcall plc (AIM: NET) is a leading provider of Low-code and customer engagement software, primarily a bespoke omnichannel solution that claims to transform contact centre performance and the provision of MATS low-code development platform that lets you develop your digital services and applications using fewer resources.

Looking at the website, you can see why they have lost their way, its a prime example of corporate speak clouding the product offering, what does this mean?

Flexibly manage contact centre resources using workforce optimisation

And this paragraph from their "low code" page:

Time to start thinking outside-in

In an era when newly-empowered customers rule supreme, process professionals find themselves struggling against a tide of new challenges. Shaving a few seconds off back-office processes now pales into insignificance compared to the urgent need to give customers what they want. Not next year – right now.

What are they thinking? Anyway, the website aside, the recent trading update gives cause for optimism although any business that has the NHS as a major client is going to be up against it in this political climate.

Trading Statement May 29 2019

Cloud bookings continue their strong performance with year over year growth of 160% to £6.5m, reflecting strong Low-code cross sales to customers and the signing of new names. As a result, Low-code ACV has continued its growth and is up 36% year over year to £4.4m. ACV from Support Contracts has also continued to grow, and as a result, total ACV is up 10% year over year to £15.6m.

Product sales, while improved over the first half of the year, have been impacted by purchasing delays within the NHS coupled with public sector customers ordering the Group’s newly launched Low-code cloud offerings. As a result, Product revenues for the year will be lower than expected.

As a consequence, adjusted EBITDA(3) for the year is now expected to be approximately £3.4m. Cash generation has been strong, and at 30 April 2019, the Group’s cash position was £6.5m offsetting the existing debt of £6.6m.

The Board remains very optimistic about the prospects for Netcall, as evidenced by the strong growth in Cloud bookings and ACV. The Group continues its transition from a traditional software business to a digital cloud operation, and the Board looks forward to giving a further update at the time of its final results to be published in September 2019.

Today's share price is £39.50, so it is trading well below the 2014 flotation price of £60.00. The lack of Twitter engagement and awful corporate doublespeak indicate that this is a company that could do with some fresh thinking in its customer approach. 

Netcall is one to watch, but it doesn't currently scream "dynamic", and until then even at this bargain basement price, I'm not tempted.

And if anyone from Netcall reads this - let your IT department know that Google+ no longer exists.

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