Eckoh Technologies (LSE:ECK) is a FTSE growth stock that I believe presents a good opportunity. Eckoh is an award-winning customer engagement, contact centre, and secure payment solutions provider. Organisations are always looking to optimise customer experience as well increase contact centre efficiency and reduce operational costs. ECK’s customer base includes Transport for London, BMW, Boots, Capita, Ministry of Justice, and MetLife, to name a few.
ECK has enjoyed substantial success in the past few years. In the last three years, it has seen revenue increase year on year. In addition, the company has seen gross profit increase year on year too over the last four years.
When the FTSE crashed in March, ECK lost nearly 40% of its share price value. At the height of the crash, shares could be purchased at just 41p per share. As I write this, shares are now trading at close to 70p per share, which is a good recovery in my opinion.
For the full year ended 31 March 2020, ECK revenue increased 16% to £33.2m. The revenue increase mostly came from ECK’s US segment, which increased by 36% of £12.7m. Its UK segment increased by 6% to £20.5m. Net income also increased from £945K to £3.1m.
A more recent trading update released today covered the six months to 30 September. Eckoh has showed excellent resilience in the face of an economic downturn. As expected, the first quarter was a challenging one for new business for many FTSE incumbents including ECK as deals were put on hold. Total revenue was slightly lower, driven mainly by a decline in US support services ($2.8m to $1.1m) and the impact on the UK business from the pandemic.
In the UK, new and total business were higher than last year. Total contracted business increased 8% to £8.6m. ECK saw excellent levels of business coming from existing clients. In August 2020, it secured a six-year renewal of its contract with Capita for the provision of services for the Congestion Charge to Transport for London, at a total contract value of £4m. A number of other sizeable renewals are expected to close in the second half of the financial year which is encouraging.
Growth to continue
Overall I feel Eckoh presents a unique opportunity to invest in a growing and thriving business. I believe its solutions will be key as the world changes due to the Covid-19 pandemic. The way in which businesses take payments has been under scrutiny in recent years to ensure companies are compliant with with the Payment Card Industry Data Security Standard (PCI DSS)”.
ECK has shown it has the tools to win and renew key contracts, and caters to some of the biggest public and private sector names out there. Across the FTSE there are many growth stocks, but this one is high on my list right now. At its current price, I feel it is a bargain and I can only see its price increasing.
Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.