Secure payments group Eckoh PLC's (LON:ECK) confidence about its chances in the US is seemingly being borne out.
Revenues climbed by 57% to £13.5mln in the six months to 30 September, with the US operation chipping in £4mln from almost nothing.
Nik Philpot, chief executive, added growth in the US is such that it will soon become a larger sales generator than the UK.
“It is in the US where the exciting opportunity for exceptional growth exists, as the market for contact centre operations is more than seven times larger than the UK and competition for secure payments is very limited. “
He was also upbeat for the remainder of the year.
“Taking into account the contracts we have already won so far this year, the excellent near-term sales pipeline and the closure of the loss-making division of PSS, we are anticipating a strong second half”.
Watch: US growth 'transforming the business'
New US deals
The company, which also boasts a contact centre software arm, recently picked up three contracts worth over US$2.5mln in the US over the next three years.
Two of them are based on the software as a service (SaaS) pricing model and are expected to go live by spring next year.
The first is a two-year deal for the group's secure payments solution with one of the largest manufacturers and suppliers of nutritional supplements in the US, while the second is a three-year deal with a Fortune 500 corporation in financial services.
The third is a three-year agreement with one of the largest US telecoms groups, where Eckoh will provides its browser-based agent desktop 'Coral' to more than 3,000 contact centre agents in a new facility opening at the end of 2016.
Momentum building
Notably, the Fortune 500 group was a long-standing customer of Product Support Solutions (PSS), a contact centre services provider, which Eckoh acquired for U$7.6mln in November last year, and which has a number of blue chip clients on the books.
This is the first success in cross-selling Eckoh's secure payments solutions into the extensive PSS customer base.
To increase recurring revenues in the US and to bring it in-line with the model in the group's UK business, Eckoh is moving its secure payments customers to a software as a service (SaaS) pricing model and away from upfront client payments.
Strong second half expected
Eckoh had flagged already that costs of integrating the two US acquisitions last year would mean flat interim profits.
Gross profit rose to £8.8mln but there was a £0.6mln loss from a discontinued part of PSS.
Costs of switching to a SaaS (pay as you use rather than a licence) model, also hit the bottom line, with underlying profits flat at £2mln and a £170,000 pre-tax loss (£74,000 profit).
Eckoh, though, traditionally makes more money in the second half due to seasonal factors with higher second half volumes in travel, retail and logistics.
What the broker says
House broker N+1 Singer added that UK growth was 11% while the US, reflecting a full period for PSS now accounts for 30% of sales.
N+1 kept its forecasts for revenues and underlying earnings for the year to March unchanged at £28.2mln and £5.8mln respectively.
“Eckoh has exceptional growth opportunities, particularly in the US, and we believe it can convert this to strong shareholder value,” it added.
Shares rose 4% to 40.3p.