News blog
Eckoh
- BY: Andrew Hore |
- POSTED: 21/06/2009 |
Speech recognition and broadcast phone-in technology services provider Eckoh is focusing increasingly on its speech solutions division, which provides it with a strong base from which to grow.
Speech solutions revenues grew while broadcast phone-in revenues were lower due to the scandals concerning TV and radio phone-ins and competitions. A loss of £1.63m was turned into a profit of £180,000 in the year to March 2009, but that excludes the costs of the settlement with Channel 4. Revenues declined from £25.6m to £19.1m, which was all down to the drop in phone-in business.
New business has been won by the speech recognition business and this will contribute during the current year. Long-term contracts make that business reasonably predictable.
House broker Seymour Pierce forecasts an improvement in profits to £730,000 this year. That would still leave the shares on 17 times earnings. Profits of £1.81m are forecast for 2010-11 - which would reduce the multiple to less than seven.
Eckoh had net cash of £5.2m at the end of March 2009 plus £3.2m to come from the sale of Symphony to telecoms services provider Redstone. Although Redstone is doing poorly at the moment Eckoh is confident that it will be able to pay the deferred consideration. Eckoh will be investing more cash in its new technology this year.
The main focus of any acquisitions will be speech solutions. Eckoh wants to be European market leader so acquisitions outside of the UK are likely.
At 6.125p a share, Eckoh is valued at £12.2m.
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