RE: Investors Chronicle - BUY12 Jul 2019 13:28
THE REMAINING IC ARTICLE...POSTED BELOW
The US business is smaller than the UK, but is growing fast. Here, Eckoh focuses on three areas where it faces the least competition: secure payments, support and Coral – its contact centre agent desktop product. New secure payments business climbed by nearly half to $13.7m (£10.9m) – Eckoh’s strongest period since entering the country in 2015.
ECKOH (ECK)
ORD PRICE: 48.0p MARKET VALUE: £121m
TOUCH: 48-48.1p 12-MONTH HIGH: 49.0p LOW: 32.5p
FORWARD DIVIDEND YIELD: 1.5% FORWARD PE RATIO: 25
NET ASSET VALUE: 6.8p* NET CASH: £8.3m
Year to 31 Mar Turnover (£m) Pre-tax profit (£m)** Earnings per share (p)** Dividend per share (p)
2018 27.2 3.8 1.2 0.54
2019 28.7 3.0 0.9 0.66
2020** 33.5 4.6 1.4 0.73
2021** 37.5 6.1 1.9 0.73
% change +12 +33 +36
Normal market size: 10,000
Beta: 0.18
*Includes intangible assets of £7.5m, or 2.95p a share
**Panmure Gordon forecasts, adjusted EPS and PTP figures
IC View
The shares recently hit a 52-week high, after Eckoh announced a three-year, $3.8m contract win for Coral with a Fortune 100 company. The news was particularly welcome given historically slow growth from the product. True, the pressure is on for the group to execute on its stateside opportunity. Still, given the growth prospects and regulatory tailwind, a price of 25 times forecast earnings looks good to us. Speculative buy.
Last IC view: Buy, 45p, 12 Jun 2019