Unaudited interim results for the six months ended 30 September 2021

2 Dec 2021

Growing global Secure Payments opportunity and UK recovery underpin expectations for FY22 and FY23

Eckoh plc (AIM: ECK) (“Eckoh” or the “Group”), the global provider of secure payment products and customer contact solutions, is pleased to announce unaudited results for the six months to 30 September 2021.

£m unless otherwise stated H1 FY22 H1 FY21 Change
Revenue 14.4 13.9 +3%
Adjusted operating profit1 2.5 2.2 +18%
Recurring Revenue2 10.5 9.8 +7%
Total contracted business3 11.2 12.7 (12%)
US Secure Payments ARR ($m)4 8.9 6.9 +29%
£m (IFRS unless otherwise stated)
Revenue 14.7 15.7 (6%)
Gross profit 11.9 12.8 (8%)
Adjusted operating profit1 2.8 3.4 (19%)
Profit after taxation 1.9 2.0 (6%)
Diluted earnings pence per share 0.73 77p (5%)
Net cash 12.7 12.9 (0.2m)

Financial highlights

  • Results in line with Board expectations
  • Resilient UK performance with September exit run-rate comparable with pre-pandemic volumes
  • Continued good progress in US Secure Payments which now represents 89% of US revenues
  • Future significant cost savings achieved (more than £1m per annum from FY23) from the move to a global Network Operations Centre (NOC), the planned and completed exit from third-party Support and natural staff attrition
  • Cloud deals continue to drive most Secure Payments sales activity and we won our largest global cloud contract to date post period, with a minimum value of $1.5m
  • CallGuard Express, the new SaaS product designed to be resold through channel partners and typically targeting smaller customers launched post period, expanding the Group’s target market
  • Eckoh’s patent portfolio strengthened with two further grants, meaning a portfolio of 17 international patents now backs Eckoh's strong IP and product proposition

Financial highlights (excluding exited third-party Support)

  • Profit improved by 18% to £2.5m (H1 FY21: £2.2m)
  • Revenue increased year on year by 3% to £14.4m (H1 FY21: £13.9m)
  • Recurring revenue2 increased by 7% to £10.5m, 73% of total revenues (H1 FY21: £9.8m; 71%), reflecting a transition towards higher growth US Secure Payments
  • US Secure Payments progress continues:
  • New KPI of annualised recurring revenue4 (ARR) introduced, increasing by 29% to $8.9m in the period 2
  • Revenue increased to $6.8m (H1 FY21: $6.5m); including two successful renewals and our largest contract, where hardware and implementation fees do not reoccur
  • Recurring revenue grew 26%, with new contracted business of $3.3m (H1 FY21: $5.9m)
  • UK revenue moved back to growth, increasing 6% to £9.0m (H1 FY21: £8.5m)
  • Total contracted business3 was £11.2m (H1 FY21 £12.7m), reflecting fewer significant UK renewals in the period and ongoing challenging conditions for new business due to the pandemic
  • Robust balance sheet with net cash of £12.7m (H1 FY21: £12.9m)

Outlook

  • With a highly relevant product portfolio, resilient business model, high recurring revenues and a robust balance sheet, Eckoh is well placed to continue strong progress in the coming years
  • The evidenced recovery of the UK business in the first half, allied to the continuing growth of the US Secure Payments activity and increasing global opportunity, coupled with the £1m of annualised cost savings, gives the Board significant confidence for the current financial year with double digit revenue and profit growth expected to return in FY23, subject to no new COVID developments

Nik Philpot, Chief Executive Officer, said: “The last 18 months have highlighted the resilience of our business and we have used this period as an opportunity to make structural and strategic changes to our operations that will give us an even stronger platform for future, profitable growth. We have successfully concluded the planned exit from our third-party Support activity, meaningfully reduced direct costs by further optimising our operations, and continued to progress in enhancing our Secure Payments offering and extending the reach of our SaaS cloud proposition. With clear signs that our UK business is now very much in recovery, set alongside the exciting US Secure Payments market opportunity that is now expanding via the cloud into a truly global proposition, the future looks bright for Eckoh to return to stronger growth next year and beyond, notwithstanding any further COVID developments.”

1. Adjusted operating profit is the profit before tax adjusted for finance income, finance expense expenses relating to share option schemes, acquired intangibles amortisation and restructuring costs.

2. Recurring revenue is defined as on-going revenue on a transactional basis, rather than revenue derived from the set-up and delivery of a new service or hardware.

3. Total contracted business includes new business from new clients, new business from existing clients as well as renewals with existing clients.

4. Annualised Recurring Revenue of all signed contracts, whether live or still to be deployed.

DOWNLOAD AS A PDF
DOWNLOAD THE RESULTS PRESENTATION

For more information, please contact:

Eckoh PLC
Nik Philpot, Chief Executive Officer
Chrissie Herbert, Chief Financial Officer
Tel: +44 (0) 1442 458 300
www.eckoh.com

FTI Consulting LLP
Ed Bridges / Jamie Ricketts / Tom Blundell
Tel: +44 (0) 203 727 1017
eckoh@fticonsulting.com

Singer Capital Markets (Nomad & Joint Broker)
Shaun Dobson / Tom Salvesen / Alex Bond / Kailey Aliyar
Tel: +44 (0) 20 7496 3000
www.singercm.com

Canaccord Genuity Limited (Joint Broker)
Simon Bridges, Andrew Potts
Tel: +44(0) 20 7523 8000
www.canaccordgenuity.com