Half year trading update

Half year trading update

- Trading in line with market expectations

- Strong double-digit revenue, profit, and order growth

- New security solutions proposition will broaden target market and increase client value

Eckoh plc (AIM:ECK), the global provider of Customer Engagement Security Solutions, announces a trading update for the six months ended 30 September 2022. All commentary relates to this period, unless otherwise stated.

Trading update

The Group performed strongly in the first half of the year, in line with the Board’s expectations. A highlight was the growth in revenue, which improved by 33% to £19.6m. The progress in revenue growth was also reflected in significantly higher levels of operating profit, which grew by more than 50%, including some benefit from positive currency movement.

Following the acquisition of Syntec and the expected increase in activity coming from a global market, we will now be reporting on UK, US and Rest of World revenues. All these markets grew, but particularly good progress was made in the US market, which increased from $7.9m to $10.6m, up 34%, and accounted for a 44% share of total revenue, up from 39%.

As reported in the order update on 6 October, following a challenging period last year, total order levels recovered strongly, increasing by more than 50% to £17.6m. This supports the expectations of future growth and underpins the increasing levels of ARR 1 which had grown by 52% to £27.8m at the end of the period.

Overall, the first half performance reflects the continued progress of Eckoh's strategy to pursue major opportunities for large blue-chip organisations, cross-sell from a broader product suite and continue the trend towards cloud adoption and more international mandates. Eckoh is increasingly focusing on attractive sectors which are suited to its model, technology, and product suite.

Product and market update

As showcased at last month’s Capital Markets Day, Eckoh is developing a suite of new security solutions that will help organisations deal with the challenges that are arising from a rapidly changing customer engagement environment. Research shows that the industry shift to remote working over the pandemic is becoming a permanent feature, with 77% of US contact centres still having more than half their agents working remotely 2. This creates a security challenge for organisations that Eckoh can help solve, and alongside the core voice security products CallGuard and CardEasy, the new product offering already includes Secure Chat and Digital Payments.

With further complementary products set to launch in the coming months the ability for Eckoh to attract new clients, grow client value and aid retention will be further enhanced, and there have been early successes in cross selling multiple products into target accounts.

Outlook and financial position

There was strong cash generation during the period and Eckoh's balance sheet remains robust with net cash of £4.4m at half year end up from £2.8m at year end.

Despite the ongoing macro-economic uncertainty, the Board expect revenue and profit for FY23 to be significantly higher than FY22. The Group is trading in line with consensus market expectations 3, supported by long-term structural growth drivers, increasing cloud adoption and Eckoh’s strengthening product offering.

Notice of interim results date

The Group will report its results for the six months ended 30 September 2022 on 23 November 2022.

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.