AGM Statement

27 Sep 2007 10:00

Eckoh PLC27 September 2007 27 September 2007 Eckoh PLC AGM Statement Peter Reynolds, the Chairman of Eckoh PLC ("Eckoh"), commented at the AGM today:"During the financial year ended 31 March 2007, the Board took steps torestructure and reorganise the Group in order that our efforts could be focusedon the high margin, high growth speech solutions market. The excellent financialresults are a testament to the success of this reorganisation. As we previously announced at the time of preliminary results on 18 June 2007,turnover from continuing operations increased by 34% to £86.8m, and pre-taxprofits from continuing operations increased by £1.9m to £1.5m before intangibleasset amortisation and exceptional items; cash and short-term investmentsamounted to £9.6m. The Group is continuing to take steps to simplify itself and focus efforts onthe high growth speech solutions activity. Strategic options for the ConnectionMakers business are being actively considered. Within the Speech Solutions area a number of exciting new long-term contractswere secured as well as a series of significant contract renewals from existingclients, which led to a 19% increase in revenues in 2006/07 compared to theprevious year. We remain confident that this year Eckoh will consolidate itsposition as the clear market leader in the UK for hosted speech recognitionsolutions and the strong sales pipeline reflects the growing maturity andopportunity in this sector. The Speech Solutions business continues to be thelong-term focus of the Group and where the Board believes the best value forshareholders will be realised, and we remain committed to extending ourfootprint into other European territories. The issues in the interactive television market earlier this year have had asignificant impact on response levels generally, which still remain much lowerthroughout the premium rate sector. Whilst these issues have reduced therevenues in our Client IVR division, the very low margin nature of theserevenues means that this will have a much reduced impact on gross profits. Theinvestment Eckoh has made to become a "best practice" supplier of IVR serviceshas provided a clear opportunity to win new contracts on more beneficial termsgoing forward, as media owners place greatest importance on compliance, qualityand service. Eckoh has also made clear its intention to renegotiate its existingclient contracts in this area to either improve on the low margin that itcurrently obtains or to discontinue those contracts on which this cannot beachieved. ITV have already announced their intention to discontinue the ITV Play activitywhich was responsible for much of the growth in Client IVR revenues last year,however, this will not impact on market's profit expectations for this currentyear. Nevertheless with activity levels likely to be reduced for the foreseeablefuture in this area the Group will be looking to review its cost base across thewhole business with a view to making a significant reduction in direct expensesbefore the end of the financial year. I would like to take this opportunity to thank Eckoh's staff for their loyalty,commitment and dedication over the past twelve months, as we all look forward toan exciting year ahead." For further enquiries, please contact: Eckoh plc Nik Philpot, Chief Executive Officer Tel: 08701 100 700Adam Moloney, Group Finance DirectorJim Hennigan, Executive Director Corfin Communications Tel: 020 7977 0020Harry Chathli, Neil Thapar, Ben Hunt Seymour Pierce Limited Tel: 020 7107 8000Jonathan Wright /Parimal Kumar This information is provided by RNS The company news service from the London Stock Exchange