TIDMECK
RNS Number : 9332R
Eckoh PLC
01 November 2023
1 November 2023
Eckoh plc
("Eckoh", the "Group", or the "Company")
Half Year Trading Update
- Trading for the half in line with Board expectations
- Record level of contracted business and record North American pipeline
- Positive traction in cross-selling & upselling across our new solution set
Eckoh plc (AIM: ECK), the global provider of Customer Engagement
Data Security Solutions, today announces an update on trading for
the six months ended 30 September 2023 (the "Period").
Trading update
Trading was in line with the Board's expectations for the
Period. Newly contracted business and renewals ('Total Contract
Value') was at a record level of GBP24.6m, up 40% on the prior year
(GBP17.6m H1 2023), driven by strong multi-year renewals and
successful cross-selling and up-selling of our new products.
The strong level of both cross-sell and up-sell initiatives to
existing clients has been achieved through our enhanced Secure
Engagement Suite, the ongoing shift to cloud and our new commercial
strategy. Recent new product additions such as Secure Call
Recording and our updated Secure Digital Payments platform have
been extremely well received and we expect several clients to be
live with these and other additional products from our Suite in the
second half.
Overall, the Group is expecting to report revenues of c.GBP18.8m
(H1 2023: GBP19.6m), reflecting the loss of a large (non-security)
UK client, disclosed in our FY23 final results, and the ongoing
transition to cloud-based delivery of our solutions. This
transition increases the visibility and quality of our earnings as
the proportion of one-off revenues in any period (from hardware and
implementation) decrease.
Whilst this shift to cloud is tempering revenue growth in the
short term, it has a positive impact on our recurring revenue,
which has increased to 83% (H1 2023: 79%) and operating margins,
which were strong at 21%. Adjusted operating profit (ex-forex) is
expected to be c.GBP4.1m * , compared to GBP3.5m in H1 2023.
Eckoh has a record pipeline of new business opportunities in the
North American market, validating the strategic decision at the
beginning of the year to move to a single global commercial team
and focus them on this market, where the scale of opportunity for
Eckoh's solutions is most compelling. The Company is, like others,
experiencing a lengthening of sales cycles with new clients,
especially in the contracting phase. Consequently, the completion
of contracts is taking longer, and several sizeable enterprise
deals where Eckoh is the chosen supplier, which were expected to
close in the Period, will now shift to the second half. Despite
this, Data Security Solutions annual recurring revenue ('ARR') for
the key North American market still strongly increased year-on-year
by 22% to $16.8m.
Outlook and financial position
Eckoh's balance sheet remains robust. Strong cash generation
continued during the Period with net cash of GBP7.3m at the end of
the half year, up by GBP1.6m from GBP5.7m at year end (H1 2023:
GBP4.4m) and no debt.
The Board is very encouraged by the record level of business
contracted in the Period, the successful implementation of the new
commercial strategy and the sales pipeline; most notably the large
deals which are in a progressed position. The sales pipeline gives
us confidence that the strong positive trend of growth in Total
Contract Value will continue in the second half. Whilst the longer
than expected sales cycles will marginally impact revenue, the
Board is confident that the Company is on track to meet profit
expectations for the full year.
Notification of Interim Results
Eckoh will provide further detail at the time of its results for
the six months ended 30 September 2023 on Tuesday 21 November
2023.
*In H123, the Company's operating performance benefitted from a
GBP0.7m currency tailwind versus an GBP0.1m headwind in H1
2024.
For more information, please contact:
Eckoh plc Tel: 01442 458 300
Nik Philpot, Chief Executive Officer
Chrissie Herbert, Chief Financial Officer
www.eckoh.com
FTI Consulting LLP Tel: 020 3727 1017
Ed Bridges / Emma Hall / Valerija Cymbal
/ Emily Bowen
eckoh@fticonsulting.com
Singer Capital Markets (Nomad & Joint
Broker) Tel: 020 7496 3000
Shaun Dobson / Tom Salvesen / Alex Bond
www.singercm.com
Investec Bank plc (Joint Broker) Tel: 020 7597 5970
Patrick Robb / Nick Prowting / Shalin
Bhamra
www.investec.com
About Eckoh plc
As a global provider of Customer Engagement Data Security
Solutions, Eckoh is all about making the world of data more
secure.
Our vision is that everyone should be able to trust every brand
and engage without risk to their personal information. We're on a
mission to set the standard for secure interactions between
consumers and the world's leading brands, and our innovative
products build trust and deliver value though exceptional
experiences.
We're trusted by many of the world's leading brands to help them
manage the personal data from customer enquiries and transactions
safely. Our solutions enable payment transactions to be performed
securely and help protect sensitive personal data across any
customer engagement channel and device the customer chooses.
Protected by multiple patents, our solutions remove sensitive
personal and payment data from contact centres and IT environments,
as the best way to secure data is not to collect it. This allows
organisations to be not just compliant but secure, increase
efficiency, lower operational costs, and provide an excellent
customer experience. This is our specialism.
Our sol utions are delivered globally through multiple cloud
platforms or can be deployed on the client's site. They offer
merchants a simple and effective way to reduce the risk of fraud,
secure sensitive data and become compliant with the Payment Card
Industry Data Security Standards ("PCI DSS") and wider data
security regulations. Eckoh has been a PCI DSS Level One Accredited
Service Provider since 2010, and our extensive portfolio of
typically large enterprise clients spans a broad range of vertical
markets including government departments, telecoms providers,
retailers, utility providers and financial services
organisations.
For more information go to www.eckoh.com or email MediaResponseUK@eckoh.com .
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END
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