Eckoh (ECK:AIM) 48p

Gain to date: 23.1%

Original entry point: Buy at 39p, 15 September 2016

Results for the year to 31 March 2017 show the effects of cost over-runs from its now closed professional services arm and more rapid software-as-a-service (SaaS) take-up in the US.

The contact centre automation and secure payment solutions supplier has impressively bounced back, beating lowered expectations.

Growth will be aided by large emerging opportunities in the US, which surprisingly lags the UK and Europe when it comes on over-the-phone payments and call centre automation.

We expect the need for a PCI DSS (Payment Card Industry Data Security Standard) ratified solution among US businesses to play very strongly for Eckoh (ECK:AIM) and with limited need for further acquisitions, management can fully focus on business execution.

Interestingly, the average value of contracts won in the company’s US payment business has risen five-fold since last year and analysts at Berenberg put its US target market at around $1.5bn. More SaaS contracts mean a slower pace of growth, although the recurring nature makes such revenues more sticky and predictable.

We remain fans. (SF)

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