Growing awareness of government surveillance and a spree of high-profile data robberies at banks and retailers have made consumers wary of sharing their payment details. Eckoh (ECK) sells software that eliminates card numbers from IT systems, helping companies regain consumers' trust. Mounting security concerns resulted in a 41 per cent increase in first-half adjusted operating profit to £1m.
Eckoh's CallGuard software combats payment fraud by barring call-centre agents from viewing customers' card data. The group also automates applications and transactions, cutting clients' costs and freeing up staff to deal with more complex issues. Those services are in demand - Eckoh signed up eight new customers and extended deals with Barclays (BARC) and Royal Mail (RMG). The group's recently established US arm also won its first three clients, and inked a five-year reseller agreement with customer engagement titan West Corporation.
Eckoh's progress may accelerate with the launch of OneProx, which prevents data theft by encrypting credit card numbers before they enter merchants' IT systems. The group plans to roll out the technology online, in mobile apps and eventually point-of-sale devices in shops. But management concede they may need a larger partner to compete with Google Wallet, Apple Pay and other mobile payment options.
Broker N+1 Singer expects pre-tax profit growth of 30 per cent a year over the next three years. It forecasts EPS of 1.2p for the current financial year.
| ECKOH (ECK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 43p | MARKET VALUE: | £96m | |
| TOUCH: | 42-44p | 12-MONTH HIGH: | 48p | LOW: 27p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 83 | |
| NET ASSET VALUE: | 8p* | NET CASH: | £4.1m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 6.3 | -1.4 | -0.3 | nil |
| 2014 | 7.8 | 0.1 | 0.1 | nil |
| % change | +24 | - | - | - |
*Includes intangible assets of £9m, or 4p a share | ||||
