Full year trading update

RNS Number : 6801L

Eckoh PLC

17 May 2022

 

17 May 2022

Eckoh plc

("Eckoh", the "Group", or the "Company")

Full year trading update

- Revenue in line with market expectations, profit ahead

- Strong ARR growth in US Secure Payments; resilient performance in the UK

- Expectation of material growth in FY23

Eckoh plc (AIM:ECK), the global provider of customer engagement security solutions, is pleased to announce a trading update for the year ended 31 March 2022.

The Board confirms that revenue for the year was in line with consensus market expectations*. Operating profit grew strongly, some 5% ahead of consensus market expectations. This is an excellent outcome given the ongoing challenges presented by the pandemic and the now planned completed exit from US and UK Support, which had contributed £2m to the previous year's profit figure.

Our strong performance reflects ongoing progress in our US Secure Payments operation, which now accounts for nearly 90% of total US revenues. There was more than 20% organic growth in US ARR. Including Syntec, US ARR ended the period at $12.7m, nearly 60% higher than last year. 

The UK business returned to growth, and transactional volumes have largely returned to pre-pandemic levels with just a few exceptions. Since period end our largest contract renewal scheduled for this financial year, a contract through Capita for a large public service organisation, was successfully renewed for £2.1m over the term.

Our recently announced implementation of a new Microsoft Azure cloud platform with a Fortune 100 US retailer is now live, making Eckoh the only provider in our industry to offer alternative cloud providers. This supports our stated strategy to continue investing in broadening our cloud proposition geographically, and with multiple suppliers and product offerings.

Syntec's contribution to revenue and profits in the final quarter of the year was consistent with our expectations at the time of the transaction, and the integration of the businesses is proceeding on plan. Unification of the technology and product offering is making excellent progress and we expect to deliver a unified and enhanced go-to-market proposition in the second half.  

Outlook and financial position

The balance sheet remains strong with net cash of £2.8m (FY21: £11.7m), well ahead of expectations.  The change reflects the acquisition of Syntec in December 2021, which was part funded by cash.

The Board expects revenue and profit for FY23 to be significantly higher than FY22.  FY23 guidance for material growth reflects the successful integration of Syntec to derive synergistic benefits, an anticipated return to normal UK trading activity, ongoing momentum in US Secure Payments supported by long-term structural growth drivers, Cloud adoption, coupled with the benefits of new products and operational gearing.  These expectations are subject to ongoing uncertainty in the macro-economic climate.

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

* Eckoh believes that consensus market expectations for the year ending 31 March 2022 is revenue of £32.15 million, Adjusted Operating profit of £4.90 million and Net cash of £1.1m.

- Ends -

For further information please contact:

Eckoh plc Nik Philpot, Chief Executive Officer Chrissie Herbert, Chief Financial Officer www.eckoh.com	Tel: [phone]
FTI Consulting LLP Ed Bridges / Jamie Ricketts / Tom Blundell [e-mail]	Tel: [phone]
Singer Capital Markets (Nomad & Joint Broker) Shaun Dobson / Tom Salvesen / Alex Bond / Kailey Aliyar www.singercm.com	Tel: [phone]
Canaccord Genuity Limited (Joint Broker) Simon Bridges / Andrew Potts www.canaccordgenuity.com	Tel: [phone]

About Eckoh plc

Eckoh is a global provider of customer engagement security solutions , supporting an international client base from its offices in the UK and US.

Our secure payments products help our clients take payments securely from their customers through multiple channels. The products, which include the patented CallGuard, can be hosted in the Cloud or deployed on the client's site and remove sensitive personal and payment data from contact centres and IT environments. They offer merchants a simple and effective way to reduce the risk of fraud, secure sensitive data and become compliant with the Payment Card Industry Data Security Standards ("PCI DSS") and wider data security regulations. Eckoh has been a PCI DSS Level One Accredited Service Provider since 2010, securing over £5bn in payments annually.

Eckoh's customer engagement solutions enable enquiries and transactions to be performed on whatever device the customer chooses, allowing organisations to increase efficiency, lower operational costs and provide a true Omnichannel experience. We also assist organisations in transforming the way that they engage with their customers by providing support and transition services as they implement our innovative customer contact solutions.

Our large portfolio of clients come from a broad range of vertical markets and includes government departments, telecoms providers, retailers, utility providers and financial services organisations.

For more information go to www.eckoh.com

 

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