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Eckoh PLC

Eckoh making strong progress in the US after two "cracking" contract wins

"We are delighted to be announcing these two major US contracts simultaneously," said CEO Nik Philpot. The group has also extended its US distribution arrangement with West.

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Secure payments specialist Eckoh PLC (LON:ECK) has updated its US distribution agreement with West Corporation, and has announced two contract wins.

Eckoh first entered into a sales agreement with West in mid-2014, and on Thursday it revealed it had entered into a three-year distributor agreement.

The new arrangement will see West continue to focus on delivering additional enterprise deals over the next three years on a non-exclusive basis, enabling Eckoh to extend its presence and partnerships in the US mid-market where the group has witnessed the majority of its direct sales success.

The company said the partnership will be focused on promoting the tokenisation (substituting sensitive data with a non-sensitive equivalent) variant of CallGuard.

It will eradicate the potential for card data theft by ensuring that employees are not exposed to card data, as well as completely removing the agents, call recordings, telephony, systems and processes from the audit scope of the Payment Card Industry Data Security Standards, Eckoh said.

Eckoh chief executive Nik Philpot said the updated contract underlined the progress the partnership had made thus far.

“This success is perfectly illustrated by a new and sizeable contract that we have also announced today, where we will be deploying from our Haloh product suite our tokenisation secure payments solution, which is an extremely compelling solution for large organisations with complex IT environments,” Philpot said.

Talking of which … the company announced two contracts, worth an estimated US$7mln in aggregate over their three year terms.

The one alluded to by Philpot is with a Fortune 500 global insurance company, and will see Eckoh provide its patented CallGuard tokenisation solution across 5,000 US-based contact centre agents employed by the corporation.

Worth at least US$2mln, it is the largest secure payments deal won in the US since Eckoh entered the market two years ago. It is further indication that momentum is not only building in terms of contract wins but also in value.

The other contract, which Eckoh won directly, is a three-year agreement to provide a variety of contact centre infrastructure support services to a major US telecommunications company, commencing from July 2016. The contract will generate a minimum of US$3mln in revenue over the three-year term but with anticipated revenue in excess of US$5m.

Philpot said the contract wins demonstrate the “excellent progress” the company is making in the US since the acquisition of Product Support Solutions Inc (PSS) in November of last year.

“We are now trading as a unified entity in the US, which is comprised of the business lines Secure Payments and Customer Contact Solutions mirroring that in the UK, and it is satisfying to see such substantial deals being won from both sides of the operation,” said Philpot.

“The integration of PSS is nearing completion and these sizeable contracts demonstrate that the business rationale for being part of Eckoh is yielding returns at every level. We expect the substantial progress and growth achieved by the group since the acquisition to continue throughout the remainder of the current financial year and beyond," he added.

Eckoh's nominated adviser and house broker, N+1 Singer, said the two contract wins were “cracking” and that the company's momentum in the US is “clearly strong”.

“At this early stage to the year no change to numbers with FY [full year] numbers to be announced on 14th June,” the broker said, describing the shares as a “core small cap tech stock holding”.

Shares in Eckoh were up 8.1% at 52.44p in late morning trading.

---UPDATES SHARE PRICE AND ADDS BROKER COMMENT---

Quick facts: Eckoh PLC

Price: £0.49

Market: AIM
Market Cap: £123.19 m
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