Sign up
Tech Capital
Why invest in ECK?

Data breaches play into hands of secure payments group Eckoh

The group is already seeing good progress at its US contact centre business
credit cards
BigPicture
Contact centre sales are growing in the US

Another major data breach, this time at electrical retailer Dixons Carphone Plc (LON:DC.), underlines why Secure Payments specialist Eckoh PLC (LON:ECK) is upbeat about its future.

“With regulation tightening and the financial impact of data breaches and fraud growing, organisations around the world are increasingly looking for ways to secure themselves and we see that trend only continuing,” Nik Philpot, chief executive, said in his annual review.

Information security budgets and remit is broadening, and this can only benefit Eckoh with our payments proposition, he added.

US momentum

The group is already seeing good progress at its US contact centre business.

“Our momentum in US Payments is particularly pleasing, where we are the market leader in contact centre security,” said Philpot.

WATCH: Eckoh PLC upbeat about its future and keen to build on progress in the US

US sales jumped by 32% in dollar terms in the year to March 2018, though the recent recovery by the pound cut this growth to 16%.

Secure payments revenues in the US were especially strong, rising 179% to US$6.7mln with US9.7mln of unrecognised payments already lined up for the current year.

Solid numbers

In the UK, Eckoh has undertaken a root and branch overhaul of its sales activity and switched focus to larger accounts.

Group sales for the year to March rose 3% to £30mln, which reflected the UK restructuring and sales here dropped 2%.

Pre-tax profits jumped 61% to £2.4mln over the year with a 13% rise on an underlying basis.

Net cash climbed to £3.6mln while the dividend for the year goes up 15% to 0.55p.

“After a year of transition, the UK operation has made good progress and is expected to return to growth this year.”

UK contract wins improved significantly on the first half even though nothing came through the channel with outsourcer Capita for the first time in five years.

Current activity levels suggest a pick-up in work through Capita this year, Eckoh added.

The advent of GDPR should also help business as the data protection rule demands best-in-class data protection and a focus on greater levels of compliance with security regulation.

Patent protection

“In US Payments, given the size of the market opportunity, the quality of our patented products and the limited competition, we expect to see strong US growth over the coming years," added Philpot. 

Its products, including CallGuard, are compliant with the Payment Card Industry Data Security Standards.

A layer of patents protect the CallGuard platform, the software underpinning its growth in the US.

This includes the tokenisation process, which is used to encrypt card data or personal information such as social security numbers.

Eckoh also has voice biometrics now on top of the initial patent granted in 2015.

As a result the company says all current US payments revenue and future contracted payments revenue are protected by at least one patent.

“The US has been a real engine of growth for the group following on from the success of securing its largest every payment contract in March,” said City broker N+1 Singer.

At 39.5p, Eckoh is valued at £100mln.

PhilW.jpg


Register here to be notified of future ECK Company articles
View full ECK profile View Profile
View All

Related Articles

© tech Capital 2018

Tech Capital, a subsidiary of Proactive Investors, acts as the vanguard for listed tech companies to interact with institutional and highly capitalised investors.
Headquartered in London, Tech Capital is led by a team of Europe's leading analysts and journalists, publishing daily content, covering all key movements in the Technology market.