Eckoh slumps as sales slowdown sees guidance lowered
Published: 05:54 01 Nov 2023 EDT
Eckoh PLC (AIM:ECK, OTC:EKTPF), the call centre payments and software company, slumped close to 6% on Wednesday after warning revenues would be marginally lower for the 2024 financial year.
Sales processes have slowed down at the Hemel Hempstead-based group, and it is taking longer for new clients to sign contracts, Eckoh revealed in its half-year trading update.
Several “enterprise deals”, which were expected to be completed in the first half to September 2023, have now been pushed back to the second half.
Revenues for the first six months are expected to come in at around £18.8 million, down from £19.6 million in 2022, because of the slowdown, with the loss of a large UK-based client and the one-off costs relating to the ongoing transition to cloud-based solutions.
Although the switch to cloud solutions has dampened trading in the short term, it has allowed recurring revenues to increase by four percentage points, accounting for 83% of sales.
Operating margins for recurring sales are at 21%, allowing total operating profits to lift to £4.1 million from £3.5 million.
Newly contracted business and renewals were at a record level of £24.6 million in the first half, up 40% from £17.6 million in the prior year.
Full-year profits are expected to remain in line with guidance, despite the slowdown of revenues, the contact centre solutions group added.
Shares in Eckoh are down more than 2% in 2023, having opened trading on Wednesday at around 41p.
