Escher Group sees pre-tax profits soar on contract wins

Dublin-headquartered software company Escher Group has reported a 202 per cent rise in first-half pre-tax profits and said it remains confident about future growth prospects.

The company, which is a provider of outsourced, point-of-sale software to the postal industry, said profit before tax rose to $1.26 million for the six months ended June 30th, up from €420,000 for the same period a year earlier.

Revenue was up 7 per cent to $11.85 million as against €11.08 million last year while adjusted earnings before interest, taxes, depreciation, and amortisation (ebitda) increased 66 per cent to $2.68 million from $1.61 million in the first six months of 2014.

Escher Group was founded in 1989 in Boston and moved its headquarters to Ireland in 2007 following a management buyout.

During the six months under review the company secured contracts with a number of companies including Permanent TSB, the Isle of Man Post Office and the UK's North East Local Enterprise Partnership (NELEP).

"We have had a solid first half. The rollout of our software to two major customers in Malaysia and North America is a significant milestone for us, providing a steady increase in future recurring revenue. This, along with the supply of our Self-Service Kiosk solution to a top tier postal operator endorse our position as a key supplier of digital transaction management software," said Escher chief executive Liam Church.

“Our expanded software range, is opening up opportunities across a wider range of growing digital transaction management markets, as has been demonstrated by a number of recent contract wins including with ptsb. Given the quality of our pipeline, the growth of our recurring revenue base and the strength of our technology set, we remain confident about our growth prospects,” he added.

Davy said the results showed an encouraging mix of contract wins but said full-year figures were dependent on further customer acquisitions.

"While the first-half numbers were steady as expected, the main highlight year-to-date is the encouraging mix of new contracts, particularly in the company's small digital and interactive services segments. These new wins should help to balance Escher's revenue stream and indicate potential new verticals," said Davy analyst Ross Harvey.

“Full-year numbers remain dependent on the acquisition of additional customers, and given the risks of not completing certain contracts on time, we will likely trim our full-year forecasts by a low-to-mid single-digit percentage,” he added.