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Eckoh first half profit down, on-track to meet full-year expectations

21st Nov 2023 15:52

(Alliance News) - Eckoh PLC on Tuesday said profit was down in the first half, tracking falling revenue and rising expenses, although it maintained it was still on track to meet expectations for the full-year

In the six months that ended September 30, the Abingdon, England-based supplier of technology and services to the education sector said pretax profit fell 47% to GBP1.5 million from GBP2.9 million a year earlier.

This tracked revenue falling 4.1% to GBP18.8 million from GBP19.6 million, while administrative expenses rose 11% to GBP14.0 million from GBP12.6 million.

"We have made excellent progress with our strategic goals in the first half of the year with continued improvement in the proportion of revenue coming from cloud, increased levels of cross-selling and upselling from our client base and higher operating margins," said Chief Executive Officer Nik Philpot.

"Our cloud and [software-as-a-service] transition journey, which is progressing well, will continue to increase revenue visibility, improve margin and quality of earnings, as well as giving clients easy access to our full secure engagement suite of products.

"While the shift to cloud inevitably tempers revenue growth in the short-term, it brings longer-term benefits, which we can already see with recurring revenues up 360 basis points to 83% and underlying operating profit margin up 410 basis points to 21.8%. It has also been a driver behind the increase in [annual recurring revenue] of 7% to GBP30.6 million."

Looking ahead, Eckoh said that while the longer-than-expected expected sales cycles has delayed revenue progression in the year to date, the board is confident that Eckoh is on track to meet expectations for the full year.

Consensus market expectations for financial 2024 revenue is GBP39 million, essentially flat from GBP38.8 million a year earlier.

Shares in Eckoh were down 1.6% to 37.40 pence each in London on Tuesday afternoon.

By Greg Rosenvinge, Alliance News senior reporter

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