Eckoh plc (AIM: ECK) share price was flat today after the global provider of Customer Engagement Data Security Solutions, has announced its unaudited interim results for the six months ended 30 September 2024.
Financial Highlights
- Revenue: £16.8m, down 10% YoY, reflecting a transition to cloud-based services.
- Gross Profit: £14.5m (H1 FY24: £15.5m), with a margin increase to 86% (H1 FY24: 83%).
- Adjusted Operating Profit: £3.6m, a marginal decline of 10% YoY.
- Recurring Revenue: Increased to 91% (H1 FY24: 83%) due to the cloud shift.
- Net Cash: £10.4m, up from £7.3m in H1 FY24, with no debt.
- Basic EPS: 0.09p (H1 FY24: 0.43p).
- Contracted Business: £14.9m, a 39% decrease due to fewer large renewals in the period.
Strategic and Operational Highlights
- Cloud Transition:
- 100% of new client contracts signed during the period were cloud-based.
- North America now generates 68% of its revenue from cloud deployments.
- Geographical Revenue Shift:
- North America contributed 51% of group revenue for the first time, driven by strong demand for data security solutions.
- North America ARR increased 10% to $18.5m.
- Regulatory Tailwinds:
- Increased complexity under PCI DSS v4.0 is driving demand for outsourced secure solutions.
- Eckoh remains well-positioned as a market leader in this space.
- Legal Settlement:
- £2.25m secured post-period from a patent dispute settlement.
Outlook and Acquisition Update
Eckoh anticipates stronger performance in H2, supported by robust pipelines in North America and expanding opportunities in cloud security solutions.
In October 2024, Eckoh agreed to a recommended cash acquisition by Eagle UK Bidco Limited (a Bridgepoint Advisers II Limited subsidiary). The acquisition is pending shareholder and court approvals, with completion targeted for early 2025.
CEO Statement
Nik Philpot highlighted the strategic focus on cloud-based SaaS solutions and the growing North American market as key drivers of the company’s evolution, emphasizing improvements in recurring revenue, margin growth, and the pipeline for new products and opportunities.
This update underscores Eckoh’s transformation into a SaaS-focused, North America-led business while benefiting from regulatory-driven demand for data security solutions.
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