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Eckoh puts in robust first-half performance with momentum returning in the second quarter

The coronavirus pandemic this year and the award of a big one-off contract in 2019 meant it was difficult for Eckoh to improve on last year's half-year showing but momentum has started to return

Eckoh PLC -

Eckoh PLC (LON:ECK) said it traded in line with expectations in the first half of its financial year, with the second quarter seeing a return of momentum.

The customer contact and secure payments specialist said the April-June quarter was “unsurprisingly challenging for new business” as countries went into lockdown mode to combat the coronavirus (COVID-19) pandemic but things started to pick up in the July-September quarter, particularly for US secure payments contracts delivered in the Cloud.

Eckoh said these sorts of projects are easier to execute and deliver in the current environment and illustrate ongoing demand for its innovative technology and solutions that are designed to safeguard its clients' migration to digital, remote working.

The value of new secure payment contracts in the US in the six months to the end of September 2020, eased to US$5.9mln from US$7.3mln in the corresponding period of last year but with a larger number of contracts won in the period.

Total revenue was slightly lower than last year, even after excluding the large one-off Coral contract from last year, mainly because of the expected decline in the US Support business, which faded to US$1.1mln from US$2.8mln, and the initial revenue impact on the UK business from the pandemic.

The US Secure Payments arm enjoyed significant revenue growth of 80%, reflecting demand driven by the long-term structural drivers of tightening regulation, and the risk of data breaches and fraud.

In the UK, both new and total business revenues were higher than last year, with total contracted business increasing by 8% to £8.6mln.

Eckoh said it is seeing “excellent levels of business” coming from existing clients, and there are a number of other sizeable renewals expected to close in the second half of its financial year.

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US total business contracted was lower than last year, reflecting the one-off benefit last year of the large contract win with Coral and the group’s managed transition away from its hardware-based support business.

The group ended September with net cash of £12.9mln, up from £10.9mln a year earlier.

In summary, Eckoh described its performance as “robust”.

“High levels of recurring revenue, a solid order book, enterprise clients and a strong balance sheet, combined with prudent cost control, have enabled Eckoh to manage the impact of the global pandemic effectively,” it added in the results statement.

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