Full-year results from the Human Screen

Eckoh has been listed since the dot.com days, a survivor but with a marginal record of profitability. Because of the time it’s taken to establish itself, the Human Screen originally thought Eckoh must have changed technologies.

Highlights

• Operating profits up 77%
• Net profit of ''2.6m compares to net cash flow of ''1.5m (''1m after capital expenditure)
• Net cash: ''5m

The Human Screen comments:

But no, a journey back as far as the 2002 annual report confirms Eckoh is still in the same business, supplying voice technology to companies, and while it’s record of profitability is not impressive, what happened to turnover certainly is.

In 2002, Eckoh’s turnover was ''54m. In 2006 it was ''127m. Today it’s ''10m, and it’s been growing slowly since 2009.

A boom and subsequent crash in its main market at the time, supplying premium rate telephone services to TV shows was responsible. After a backlash against the programmes due to errors which effectively defrauded viewers, TV companies scaled back the use of premium rate lines, and Eckoh disposed of what had previously been its biggest division.

Now the company is focused on processing transactions by voice, without human involvement, claiming to be the the largest provider in the UK with many blue-chip clients.

The Human Screen is impressed by the company’s resilience, and thinks it may make an interesting speculation, but at over two times tangible book value it’s not obviously cheap, and it would have to be given its history.