Relentless cyber attacks and data thefts have piled pressure on businesses to store customers' information safely. Growing numbers have turned to Eckoh (ECK), whose technology secures payments and call-centre transactions. The upshot was a 44 per cent rise in adjusted operating profit to £1.5m in the six months to 30 September.
Eckoh's main UK business signed eight new customers, including the Co-operative Group and ComAir. It also renewed all 13 contracts that expired in the period, including one with long-term partner Vue Cinemas encompassing inbound calls, emails, ticket bookings and gift cards. And a framework agreement with Capita helped it secure £15m in multi-year agreements with O2, Yodel and Transport for London.
Strong demand for established secure payments product CallGuard meant gross margins widened by 10 percentage points to 82 per cent. Nonetheless, Eckoh is expanding its product range: it has inked a three-year contract with a global retailer for its Haloh solution, which replaces credit card details with representative tokens on IT and call-centre systems. And it recently acquired peer Product Support Solutions to accelerate its overseas expansion.
Broker N+1 Singer raised its forecasts and now expects adjusted pre-tax profit of £4m, giving EPS of 1.3p, rising to £5.3m and 1.7p in the year to March 2017 (from £3.6m and 1.4p in FY2015).
| ECKOH (ECK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 48p | MARKET VALUE: | £107m | |
| TOUCH: | 47.5-48.5p | 12-MONTH HIGH: | 49p | LOW: 37p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 55 | |
| NET ASSET VALUE: | 9p* | NET CASH: | £1.3m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£000) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 7.8 | 109 | 0.05 | nil |
| 2015 | 8.6 | 74 | -0.03 | nil |
| % change | +10 | -32 | - | - |
*Includes intangible assets of £7.8m, or 3.5p a share | ||||
