Full year results 2021

Strong revenue and order momentum in US Secure Payments; resilient performance in the UK

Trading in-line with market expectations - material growth in FY23, after FY22 comparable to current year due to the pandemic

Strategic highlights

• US Secure Payments revenue grew strongly by 57% and now represents 79% of total US revenues
  - New Secure Payments contracted business of $11.6m exceeded (FY20: $10.7m
  - cloud contracts accounted for over half the contract value and more than 80% of the number of contracts, compared to 20% in the prior year
  - Record number of contracts won in a year since Eckoh entered the US market
• Total contracted business³ £30.7m (FY20 £35.9m), excluding Coral contract down 9% (FY20: £32.9m)
• New contracted business⁴ £15.7m (FY20: £18.6m), excluding Coral contract down 4% (FY20: £16.3m)
• UK total business, £18.9m (FY20: £20.1m) with 59% of new business coming from existing clients
  - Strong renewals including TfL, Tenpin, Yodel, 1st Central, Welsh Water and Ministry of Justice
• Major CallGuard release in January 2021, consolidating market leading position

Financial highlights

• Results in-line with market expectations
• Revenue down 8% overall due to the pandemic, 7% at constant currency⁵
• Adjusted operating profit in-line with prior year at £4.7m despite the pandemic, the planned exit from US Support and currency headwinds, and 13% higher excluding the FY20 Coral contract
• Profit before taxation increased by 6% to £3.5m (FY20 £3.3m)
• US Secure Payments' revenue increased significantly by 57% to $12.8m (FY20: $8.1m)
• UK revenue down 12%, with multiple lockdowns impacting some repeatable transactional revenues
• Recurring revenue⁶ 71% (FY20: 75%), impacted by the decline in UK transactional revenue
• Proposed final Dividend is maintained at 0.61p per share (FY20: 0.61p)
• Continued strong cash position and robust balance sheet: net cash £11.7m (FY20: £11.6m)

Outlook

• Shift to remote working driving opportunities and demand for Eckoh's products and model
• The Board expects revenue and profit for FY22 to be comparable to FY21, and material year-on-year revenue and profit growth in FY23. These expectations are subject to no further lockdowns in the UK or US, and ongoing uncertainty in the macro-economic climate because of the COVID-19 pandemic.

Nik Philpot, Chief Executive Officer, said:

"In a challenging year, we are pleased that our highly relevant products and resilient business model have enabled us to deliver results in-line with expectations and profits comparable to the previous year. Whilst new business was impacted across the Group, especially in the first half, new strategic opportunities have been created as many organizations seek a more permanent shift to remote working, which plays to Eckoh's strengths.

The momentum in the US Secure Payments business returned strongly in the second half, buoyed by the switch to the cloud, a trend that has been accelerated by current market conditions, and we look forward to overall growth returning as the pandemic restrictions are lifted. Our Secure Payments business continues to benefit from ever increasing regulation and the need to mitigate the financial risk of data breaches and fraud, as organizations look for ways to secure themselves more comprehensively, beyond just the needs of compliance.

I'd like to thank my Eckoh colleagues for working so hard and effectively throughout the past year, without their efforts we could not have delivered such a resilient outcome."

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For more information, please contact:

Nik Philpot, Chief Executive Officer

Chrissie Herbert, Chief Financial Officer

1. _{Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) is the profit before tax adjusted for depreciation of owned assets and leased assets, amortization of acquired intangible assets and expenses relating to share option schemes.}
2. _{Adjusted operating profit is the profit before tax adjusted for amortization of acquired intangible assets and expenses relating to share option schemes.}
3. _{Total contracted business includes new business from new clients, new business from existing clients as well as renewals with existing clients.}
4. _{New contracted business excluding renewals with existing customers.}
5. _{Constant currency (using last year exchange rates).}
6. _{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.}