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Eckoh striving for repeat business

The secure payment specialist is growing strongly in the lucrative US market
June 13, 2017

Eckoh (ECK) is making good progress with its shift to a recurring revenue model. The secure payment specialist is building repeat business on concerns that the spread of digitalisation has left consumers vulnerable to fraudulent activity. Products such as Eckoh's CallGuard eliminate the need to provide sensitive personal and payment data to call-centre personnel or other third parties, thereby removing a weak link in the transaction process.

IC TIP: Buy at 48p

This time last year we highlighted "two strategically important deals in the US", which we thought provided a pointer to future growth channels - and that's certainly playing out. The group's US operations have grown 145 per cent to £9.7m and now account for a third of revenues. Overall, the group increased gross profits by a fifth to £20.3m. Recurring revenues moved up 6 percentage points to 76 per cent as client retention builds across the pond, a process aided by a broadening of the group's operational capabilities - thereby facilitating a full-service offering.

Berenberg gives adjusted operating profits of £5m for the year to March 2018, leading to EPS of 1.6p, against £4m and 1.6p in FY2017.

ECKOH (ECK)
ORD PRICE:48pMARKET VALUE:£117m
TOUCH:47-49p12-MONTH HIGH:55pLOW: 31p
DIVIDEND YIELD:1.0%PE RATIO:80
NET ASSET VALUE:8p*NET CASH:£0.2m

Year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201311.01.20.90.25
201414.0-1.40.10.31
201517.2-0.9-0.40.38
201622.52.40.90.45
201729.11.60.60.48
% change+30-33-30+7

Ex-div: 28 Sep

Payment: 27 Oct

*Includes intangible assets of £9.99m, or 4p a share