Online payments company Eckoh (ECK) managed to maintain normal trading in March and April and even sees growth opportunities in the post-Covid-19 world.
Operations like call centres need to take payments and with staff working from home, Eckoh sees a window into selling its technology to boost the safety of these arrangements. The confidence is not total, however. The company has held off on a final dividend for the 12 months ending 31 March, and has not yet issued guidance for the current year.
Its 2019 results showed improvements almost across the board: in the UK, where two-thirds of its revenue comes from, and in the US, where sales jumped a third. The only drop was in the support division, which the company has flagged as a shrinking business in the past.
As a contract-based proposition, Eckoh’s recurring revenue is a key point for investors. This came down last year, in both its US and UK divisions, to 61 per cent and 88 per cent respectively. The UK drop was minor (2 percentage points) but in the US it fell 7 percentage points because of high startup costs for a new contract.
Eckoh said this figure would stabilise at 86-88 per cent.
Canaccord Genuity forecasts improved earnings for 2021, at 1.38p per share.
| ECKOH (ECK) | ||||
| ORD PRICE: | 62p | MARKET VALUE: | £ 156m | |
| TOUCH: | 60-62p | 12-MONTH HIGH: | 67p | LOW: 40p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 51 | |
| NET ASSET VALUE: | 7.5p* | NET CASH: | £11.6m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 23 | 2.4 | 0.9 | 0.45 |
| 2017 | 29 | 1.6 | 0.6 | 0.48 |
| 2018 | 30 | 2.4 | 1.1 | 0.55 |
| 2019 | 29 | 1.2 | 0.4 | 0.66 |
| 2020 | 33 | 3.3 | 1.2 | nil |
| % change | +16 | +175 | +230 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £7.3m, or 2.8p per share | ||||
