Escher Group back in profit as revenues rise 4%

Dublin-headquartered software firm Escher Group bounced back into profit last year as it announced revenue rose 4 per cent to $22 million from $21.1 million in 2014.

Escher, a provider of outsourced, point-of-sale software to the postal industry, reported a pretax profit of $1.1 million as against a $500,000 loss the preceding year.

Full-year adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) was up 94 per cent to $4 million from $2.1 million a year earlier with the company announcing basic earnings per share of 2.3 cents.

Escher issued a profit warning late last year, indicating a shortfall in licence revenues after having previously estimated full-year revenues of $24.2 million.

The group said the main driver behind the increase in profitability last year was the transition to maintenance of two major customers in North America and Malaysia and the initiation of a major subscription based contract in Germany. It said these developments allowed it to begin its transition towards having more predictable revenue streams.

Escher, which was founded in 1989 in Boston and which moved its headquarters to Ireland in 2007 following a management buyout, said maintenance revenue, which accounts for 34 per cent of total revenue, grew 32 per cent last year to $7.6 million from $5.7 million a year earlier.

Software licences revenues, which accounts for 19 per cent of overall turnover, was down 21 per cent from $5.2 million to $4.1 million. Software development and consulting services, which contributes 36 per cent of turnover was flat at $7.8 million.

Riposte platform

The group said on Monday it continues to see strong retention within its existing customer base while renewals of maintenance and support contracts are in line with previous years. It also said take-up of its digital and interactive services via its Riposte platform were increasing.

Escher said it it was considering the formation of joint ventures, partnerships and investments in start-ups to look at opportunities outside its traditional postal point of sale market, in areas such as retail branch banking, government licensing, emoney service provision and secure digital messaging.

"The current financial year has started in line with the board's expectations. Given the quality of our pipeline, current technology set and contracted for revenue, we remain confident about the prospects for 2016 and beyond," said chief executive Liam Church.