Eckoh’s (ECK) statutory numbers for the half-year to September might not elate investors at first glance – but these must be seen through the lens of new accounting rules. Indeed, the implementation of IFRS 15 – relating to revenue recognition – constricted the top line, in turn contributing to a small pre-tax loss. However, longer term, IFRS 15 should have a beneficial effect – strengthening recurring revenues (which constituted 87 per cent of the top line), while providing a clearer accounting picture for investors through increased deferred revenues. Moreover, the secure payments group saw a whopping 63 per cent rise in “new business contracted” to £14.2m which, together with the uptick in repeating sales, brings better revenue visibility for future reporting periods.
By geography, the UK saw an encouraging return to growth, with a 5 per cent rise in revenues stemming from the restructuring of the sales team. Meanwhile, revenues for the US secure payments business soared 67 per cent, while the order book here grew 78 per cent to $21.7m (£16.9m). But the broader US region endured a 14 per cent fall in revenues, tempered by short-term declines in its support, Coral and other sales lines.
House broker N+1 Singer forecasts adjusted pre-tax profits of £2.6m and EPS of 0.9p for the year to March 2019 (from £3.8m and 1.7p in FY2018).
| ECKOH (ECK) | ||||
| ORD PRICE: | 37.5p | MARKET VALUE: | £94.8m | |
| TOUCH: | 37-38p | 12-MONTH HIGH: | 52p | LOW: 33p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | na | |
| NET ASSET VALUE: | 7p* | NET CASH: | £3.4m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017** | 13.4 | 0.82 | 0.32 | nil |
| 2018 | 13.1 | -0.20 | -0.07 | nil |
| % change | -2 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
*Includes intangible assets of £7.4m, or 3p a share **2017 numbers restated | ||||
