The chief executive of Eckoh PLC (LON:ECK), Nik Philpot, has sounded a confident note for the company as it adapts to the new reality of the coronavirus pandemic, saying the company has adjusted “remarkably well” and its business in “a very good position” going forward.
Speaking to Proactive on Wednesday, the CEO of the secure payments specialist said its US business had seen “little impact” from the worldwide switch to remote working, having been mostly operated in that fashion from the outset, adding that across the whole business a “very high proportion” of the company’s revenue, around 80%, is recurring and will “largely continue to come in no matter what happens”.
“We’re very fortunate that our services, by and large, still need to be used by companies and are something that people are not able to do without”.
Philpot’s assessment that the firm’s technology is essential seems to have been borne out in the company’s latest full year, with a trading update for the 12 months ended 31 March last week reporting record order levels with 10% growth to £35.9mln.
READ: Eckoh rises as it reports "another record year"
Eckoh was also bullish on its prospects, saying its business model and market position meant it is “well placed to manage the impact of [coronavirus] on our clients' businesses, with high levels of recurring revenue…a record order book, blue-chip enterprise clients and a strong balance sheet”.
Over the period, the company said its US business had continued to benefit from its position as “the preferred supplier for large enterprises to secure payment data in their contact centre operations”, adding that its sale pipeline remained “extremely strong” despite the coronavirus outbreak delaying the conclusion of some “significant deals” beyond March 31.
The firm’s position as a market leader in the US for secure payments means it is now doubling down on that business area to fully exploit what Philpot says is a “large” opportunity for the group in the American market.
This shift takes the company away from more traditional support contracts, which rely on on-site work and thus are less lucrative during the current period of social distancing.
Meanwhile, Eckoh said its UK business had seen significantly higher order levels in the second half of the year as several larger contracts renewed earlier than scheduled.
The company also has a large contract with outsourcing firm Capita PLC (LON:CPI), the revenues from which the CEO says are starting to flow.
Philpot is also upbeat in regards to the company’s finances as it looks to weather the next few months of disruption.
“We’re in a very good position. We won’t be needing to raise cash because we have net cash of £11.5mln…we’re in a good place…I think the service we provide is important to help companies operate effectively and communicate with their customers, and they’re going to need to do that more than ever over the coming months”, he said.
While Eckoh has had to withdraw its guidance for the coming year due to the uncertainty caused by the pandemic, Philpot said the company is still maintaining “an open mind” around the company’s dividend ahead of its full-year results in June.
“Our shareholders might take different views, some may want the dividend to continue, others may want us to maximise our cash in the bank”, he added.
Shares in Eckoh were 1.1% higher at 48p in mid-afternoon trading on Thursday.