10th Jun 2014 10:20
LONDON (Alliance News) - Financial services company Eckoh PLC swung into a pretax loss for the year to end-March despite seeing revenues rise, hit by costs relating to its acquisition of Veritape in June 2013.
The company also announced Tuesday that it had been granted a patent for the transaction security method and system underpinning its CallGuard payment product.
The company posted a pretax loss of GBP1.4 million, swung from a profit of GBP1.2 million, as revenue rose to GBP14.0 million from GBP11.0 million, but this was offset by higher administrative expenses and by exceptional costs relating to its acquisition of Veritape.
Eckoh posted a GBP990,000 charge relating to the amortisation of acquired intangible assets, and acquisition costs of GBP175,000.
Veritape contributed GBP1.3 million to revenues during the year.
Eckoh said that revenue growth had been driven by its partnership with Capita Customer Management, which won a five-year contract with parcel delivery company Yodel, and a ten-year contract with Telefonica UK (O2) worth GBP1.2 billion. Eckoh will received a minimum of GBP11 million over the ten years from the Telefonica contract.
In April, the company won three payments contracts with FTSE 250 companies, delivering an aggregated value of over GBP17 million.
Eckoh continued to invest in research and development during the year, including hiring three employees, and expanding its mobile team.
After the acquisition of Veritape the company began to focus on the US market, highlighting it as a "significant sales opportunity" for its secure payments services, citing a large data breach at retailer Target Corp. The breach in February meant that over 40 million credit and debt card were compromised.
Eckoh has opted to focus on its secure payment portfolio and has launched a US website. On Monday the company announced that it had won a contract with a US partner which will deliver minimum revenues of USD24 million to Eckoh over five years.
The company said that many of the contracts it secured in the second half contributed little or no revenue to the recent year. They will be fully implemented in the first half of the current year, and will lead to revenue and margin growth during the year.
"We enter the new financial year with every expectation that we will be able to execute on the high volume of pipeline opportunities that currently exist," Eckoh said in a statement.
The company also announced Tuesday it had been granted a patent for the transaction security method and system underpinning its CallGuard payment product.
Shares in Eckoh were trading up 3.6% at 46.64 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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