This company has really grown up during the past three years or so. Eckoh (ECK:AIM) may have started out from the humble beginnings of auto booking cinema tickets thanks to its clever voice recognition software algorithms but it today straddles far greater markets, running the automated bits of vast contact centres (what used to be called call centres) of some very large organisations to payments processing via web and SMS, for example, perhaps to pay your water bill or a fixed penalty fine for speeding say.

Today the company reports a five-year contract extension with major client Ideal Shopping Direct, the multi-channel home shopping business. No financials details are made available so it's difficult to know its significance to revenues and profits for Eckoh, probably not huge in isolation, judging by today's modest 1.7% share price rise to 45.25p. Yet this remains a strong example of how Eckoh has successfully grown an account.


Having first signed a contract for Eckoh's hosted Interactive Voice Response (IVR) system in 2005, Ideal Shopping now takes a comprehensive suite of customer contact services as well as Eckoh's secure payments offering. Eckoh also manages the distribution of calls into Ideal Shopping's global network of contact centre operations based in the UK, India and the Philippines.

In 2014, the Eckoh service was extended to include the newly established Ideal Shopping business in the US, and this new extension will see Eckoh's capability go deeper still, delivering a multi-channel solution across web, phone, email, social media and webchat channels. Delivery of the new solutions has already commenced and will be rolled out on a phased basis during the course of 2016.Secure-payments-keyboardHat's off to CEO Nik Philpot, he has grown the company cleverly and successfully and investors have come to appreciate its value, Eckoh's market cap having tripled from circa £30 in about three years.

But that success to date creates a valuation problem for potential investors. Where the price to earnings (PE) multiple once stood in the mid-teens, buying the stock today will cost you roughly 27-times the 1.7p of EPS anticipated for the year to March 2017. That rather full-looking ratio implies near-perfect business execution. But Philpot's exciting US ambitions do equally suggest that current market forecasts may be on the light side. Certainly one to watch.

Issue Date: 08 Mar 2016