Eckoh plc

("Eckoh" or the "Group")

Unaudited interim results for the six months ended 30 September 2022

- Trading in line with market expectations; on track to deliver material growth in FY23
- Group and North America ARR and total orders growing strongly
- Syntec integration progressing to plan
- New security solutions portfolio and expanded addressable market enhancing future growth opportunity

Eckoh plc (AIM: ECK) the global provider of Customer Engagement Security Solutions, is pleased to announce unaudited results for the six months to 30 September 2022.

£m (unless otherwise stated)

H1 FY23

H1 FY22

Change

Revenue

19.6

14.7

+33%

Gross profit

15.5

11.9

+31%

Group ARR1

27.8

18.3

+52%

North America Security Solutions ARR1 ($m)

13.8

8.1

+71%

Adjusted EBITDA3

5.0

3.5

+44%

Adjusted operating profit4

4.2

2.8

+52%

Profit before taxation

2.9

2.4

+23%

Adjusted diluted earnings (pence per share)5

1.06

0.80

+32%

Total contracted business6

17.6

11.5

+54%

Strategic highlights

  • Results on track to deliver material growth in FY23, in-line with market expectations7
  • Continued strong ARR1 growth, driven predominantly by the North American market
  • Integration of transformational Syntec acquisition and new product development progressing well and on plan
  • Encouraging initial levels of cross selling from the new portfolio, which is extending the total addressable market
  • Security Solutions sales activity continues to be driven by cloud deals and international mandates
    • Two large cloud deals signed in the half with a leading global hotel group and a large US retailer, both taking multiple products including voice security, digital payments and advanced speech
  • Fundamental industry shift to remote working and ongoing migration to cloud supporting growth opportunity

Financial highlights

  • Strong performance, as previously announced in Trading Update on 1 November 2022
  • Group revenue grew by 33% to £19.6m from the addition of Syntec, and underlying, organic growth
  • Group ARR1 up 52%, reflecting the market opportunity, ongoing shift to cloud and successful renewals
  • Recurring revenue2 increased by 43% to £15.5m, representing 79% of total revenues (H1 FY22: £10.9m; 74%), reflecting the successful renewals in the North America territory in the period
  • Adjusted operating profit4 up 52% to £4.2m (H1 FY22: £2.8m) driven by continued revenue growth, the ongoing impact of prior year cost savings and benefit from FX movements
  • Total contracted business6 was £17.6m (H1 FY22 £11.5m), a strong recovery, increasing by 54%, with new business growing by 67% to £8.2m
  • North America territory performed strongly:
    • ARR1 of $13.8m, up 71% (H1 FY22: $8.1m) and 16% growth since end of March 2022 (which reflects like-for-like growth following the completion of Syntec)
    • Revenue of $10.6m, up 33%, (H1 FY22: $7.9m)
    • Recurring revenue up 9% to 73%, driven by successful renewals and continuing cloud adoptions
  • UK, Ireland and ROW revenues returned to growth with single digit growth expected going forward
    • Revenue up 22%, to £10.9 m (H1 FY22: £9.0 m)
    • ARR1 of £16.4m, up 32% from last year (H1 FY22: £12.4 m)
    • Excellent levels of successful renewals including the two largest this financial year
  • Balance sheet remains strong following the £31m acquisition of Syntec in December 2021, with net cash of £4.4m at 30 September 2022 (H1 FY22: £12.7m)

Outlook

  • Eckoh is trading in-line with market expectations7; on track to deliver material growth in FY23, without yet benefiting markedly from the new security solutions product set
  • With an increasingly relevant product portfolio, resilient business model, high recurring revenues, and a robust balance sheet, Eckoh is well placed to continue the strong progress in the coming years

Nik Philpot, Chief Executive Officer, said: "These are a great set of results, showing the anticipated strong progress in key areas. I am particularly pleased with the increasing organic and overall levels of ARR and contracted orders. They reflect our organic growth, the successful integration of Syntec, strong growth in the key North American market, and the ongoing momentum from cloud deployments.

The customer engagement industry is already facing new security challenges from the permanent shift towards greater remote working, and a deteriorating global economic environment is likely to only exacerbate the number of security threats. Organisations who ignore these risks do so at their potential reputational and financial peril. We believe our enhanced set of security solutions will not only help companies to address these issues but also drive significantly better performance from their customer engagement and increase customer satisfaction.

Our addressable market, which was already significant, has been expanded further by our new solution set, and the global opportunity supported by our enhanced cloud platforms will help drive our ongoing growth and the future exciting prospects for Eckoh."

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Disclaimer

Eckoh plc published this content on 23 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 December 2022 11:11:15 UTC.