CloudCoCo’s FY2025 reset: debt cleared, profit booked, growth engine primed
CloudCoCo’s FY2025 numbers are the first look at the new, slimmed-down business after selling its legacy managed services units in October 2024. The result is a cleaner model focused on e-commerce and IT procurement through MoreCoCo and Systems Assurance – and a much tidier balance sheet.
Yes, headline revenue fell because of the disposal, but the reshaped Group ended the year with net cash, sharply lower central costs and a total comprehensive profit of £2.6 million driven by the gain on sale. Trading in the continuing business improved through the year, exiting with an annualised revenue run-rate approaching £10 million.
Key figures retail investors should know
| Metric (year to 30 Sep 2025) | FY2025 | FY2024 | Notes |
|---|---|---|---|
| Group revenue | £9.6 million | £27.5 million | Reflects disposal of legacy units |
| Continuing revenue | £8.0 million | £8.7 million | MoreCoCo + Systems Assurance |
| Trading Group EBITDA (continuing) | £0.08 million | £0.06 million | Small, but improving |
| Operating loss (continuing) | £0.40 million | £0.54 million | After plc costs and non-cash charges |
| Total comprehensive profit | £2.6 million | £3.1 million loss | Boosted by gain on disposal |
| Profit from sale (discontinued) | £3.1 million | n/a | One-off gain |
| Gross margin (continuing, after fees) | ~6.5% | ~5.7% | ~14.5% before seller fees |
| Plc costs (continuing) | £354,000 | £472,000 | Directors also cut pay from April 2025 |
| Cash at year end | £0.64 million | £1.04 million | Net cash position c.£0.53 million |
| Net assets | £0.5 million | £2.1 million net liabilities | Debt cleared post sale |
| EPS (basic) | 0.37p | (0.45)p | Reflects the disposal gain |
What actually changed: a simpler, scalable model
The big move was selling CloudCoCo Limited and CloudCoCo Connect Limited for total cash proceeds of £7.9 million (reduced by £0.385 million after completion accounts). That cash cleared £6.2 million of MXC loan notes and accrued interest, avoiding a £550,000 extension fee and removing long-term debt.
CloudCoCo now runs on two engines: MoreCoCo (e-commerce) and Systems Assurance (B2B procurement). More than half of e-commerce orders are fully automated, handling over 7,000 orders per month with a lean 13-person team. That’s the scale story – automation first, headcount second.
Margins, channels and the Amazon effect
CloudCoCo’s model is high volume, low touch. Gross margin before marketplace fees is around 15%, dropping to about 6.5% after seller fees. Third-party marketplaces, mainly Amazon, delivered roughly 91% of e-commerce revenue in the year, at an average net margin of c.4%.
Direct web sales typically earn closer to c.12% net margins. Management’s plan is straightforward: hold the marketplace volume for reach and pricing leverage, but steadily push more sales into higher-margin direct channels and lower-fee alternatives. That shift, plus better supplier terms and automation, lifted net margin from 5.7% to 6.5% year-on-year.
Trading momentum improved quarter by quarter
There were some speed bumps early on – supplier data-feed disruption and the complexity of the pre-disposal structure hit Q1. But revenue built from £1.4 million in Q1 to £2.4 million in Q4, taking the annualised run-rate close to £10 million by year end. That is the key health signal after the reset.
Costs under control and balance sheet repaired
Administrative expenses in continuing operations fell to £0.91 million. Plc costs dropped to £354,000, with Directors taking around £90,000 of annualised salary reductions from April 2025. Operating cash outflow of £0.6 million reflected sub-scale trading and working capital, but the disposal proceeds more than offset this, leaving year-end cash of £0.64 million and net assets of £0.5 million.
Project Brightstar: new capital to chase B2B growth
Post year end, shareholders approved a capital reorganisation and a subscription raising £275,000 (gross) at 0.12 pence per share, issuing 229,166,666 new shares. Net proceeds of about £260,000 will fund an experienced enterprise sales push and further development of the Group’s digital commerce and procurement capabilities.
Brightstar’s aim is to blend CloudCoCo’s e-commerce infrastructure with higher-value enterprise procurement, lifting margin quality and scaling revenue faster. Systems Assurance has been reoriented towards hardware, licensing and software brokerage, with roughly 60 branded WebStore customers already on the platform featuring credit terms, approvals and consolidated billing.
Why this matters for shareholders
This was not growth for growth’s sake – it was surgery. CloudCoCo has swapped a complex, capital-hungry stack for a capital-light, automated e-commerce and procurement engine. The disposal gain won’t repeat, but the strategic logic is clear: lean costs, no long-term debt, and a pathway to sustainable EBITDA as revenue scales.
There are risks. Reliance on marketplaces concentrates margin pressure and platform risk, and the business still needs to grow to fully absorb plc costs. Inventory and obsolescence must be tightly managed, and cyber security remains a permanent to-do in a digital model. But the quarterly trajectory, vendor expansion, cost discipline and a sharper B2B proposition are all pointing the right way.
What to watch in FY2026
- Revenue run-rate: does it move decisively through the initial £10 million target?
- Channel mix: is the share of direct web sales rising versus marketplaces?
- Net gross margin after fees: can it nudge up from ~6.5% toward 7%+?
- Trading Group EBITDA vs plc costs: progress toward consistent positive monthly cash flow.
- Cash balance and working capital discipline as volumes scale.
- Enterprise traction: hires under Project Brightstar and new B2B wins.
- WebStore footprint: growth from c.60 business customers and recurring purchasing behaviour.
Josh’s take: a credible reset with execution upside
CloudCoCo has done the hard part – remove the debt anchor, simplify, and prove the engine turns. The model is built for scale; the margins say “mix matters”. If management can keep shifting sales toward direct channels, deepen supplier terms and convert Brightstar into enterprise wins, the blend of higher-quality margin and operating leverage should start to show through.
Short version: a cleaner balance sheet, improving unit economics and a clear playbook. The onus now is on execution – pushing beyond the £10 million run-rate, lifting net margins and turning Trading EBITDA into durable, plc-cost-covering profitability.
