For over a decade, Eckoh (ECK) has operated in the highly competitive market for providing speech recognition and card payment software to call centres. But over the past few years, the company has developed something of a niche, supplying more secure software that doesn't allow call centre agents to see credit card numbers while they're taking payments over the phone or online, thereby reducing the risk of data theft.
The key differentiator between Eckoh's software suite and competing products is that Eckoh is heavily accredited with major credit card companies. Until its peers catch up on this point, Eckoh is intent on winning market share.
Turnover increased 28 per cent in the year ended 31 March, over half of which was organic growth. That drove a 48 per cent uplift in adjusted operating profit to £2.2m, although expenses relating to share option schemes and acquisitions caused reported figures to fall sharply. Growth looks set to ramp up from here, too, as many contracts Eckoh signed in the second half of last year only started contributing to sales in the current year. Broker N+1 Singer expects adjusted pre-tax profits of £3.2m, giving adjusted EPS of 1p. That increases to £3.8m and 1.2p in fiscal 2016 (from £1m and 0.4p last year).
ECKOH (ECK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 46p | MARKET VALUE: | £96m | |
| TOUCH: | 45-47p | 12-MONTH HIGH: | 48p | LOW: 15p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 329 | |
| NET ASSET VALUE: | 7p* | NET CASH: | £7.3m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 7.9 | -0.2 | -0.1 | nil |
| 2011 | 9.0 | -0.6 | -0.1 | 0.1 |
| 2012 | 10.4 | 1.3 | 1.3 | 0.2 |
| 2013 | 11.0 | 1.2 | 0.9 | 0.25 |
| 2014 | 14.0 | -1.4 | 0.1 | 0.3125 |
| % change | +27 | - | -85 | +25 |
Ex-div: tba Payment: tba *Includes intangible assets of £9.6m, or 5p a share | ||||
