Eckoh PLC (AIM:ECK, OTC:EKTPF), the provider of secure payment products and customer contact solutions, is on course to meet the market’s full-year expectations.
In its half-year trading update, covering the six months to the end of September, the group said it had seen growth in recurring revenues with a recovery in the UK adding to revenue visibility.
In the US secure payments business, it has seen strong progress in improving annualised recurring revenues (ARR).
On an underlying basis (at constant currency, excluding discontinued third-party support activity), the group’s revenue was slightly higher year-on-year; recurring revenues increased by 7% (representing 73% of total revenues) and operating profit grew by 18%.
Total revenue was slightly lower on a constant currency basis than in the same period of 2020, largely driven by the planned exit from US and UK third-party support that is now almost complete; third party support contributed just £0.3mln this time around compared to £1.8mln in the prior year.
In the US, Secure Payments now account for 89% of total US revenues. The group’s largest US client to date, with a service that went live in 2019, renewed its contract in the reporting period.
ARR in the US increased by 29% year-on-year to US$8.9mln, with almost 40% of ARR coming from Cloud services, which is more than double the amount seen as recently as April 2020.
In the UK, the recovery from the impact of the pandemic on both transactional activity and new business has been gradual, but momentum built in the second quarter, reflecting a return to more normalised levels of activity from large clients such as Transport for London and Premier Inn, Eckoh said. By September 2021, overall activity was in line with pre-pandemic levels.
“Eckoh's growing base of recurring revenues is improving the group's earnings visibility, which allied to a robust order book for enterprise clients, increased transactional activity and prudent cost control, supports our confidence that full-year performance will be in line with current market expectations,” the group said in its outlook statement.
Net cash at the end of September stood at £12.7mln, little changed from £12.9mln a year earlier.
Shares in Eckoh were up 1.9% at 52.5p in early deals.