Annual Report 2022
2
2
Strategic Report | Contents
3
3
Contents
01
Strategic
Report
Highlights of the Year 05
Chairman’s Statement 08
Chief Executive’s Review 10
Principal Risks & Uncertainties
20
Financial Review 24
Sustainability Report
Board of Directors
28
34
02
Corporate
Governance
Chairman’s Statement on Corporate Governance 36
Audit Committee Report 42
Remuneration Committee Report 46
Director’s Report 53
Independent Auditors’ Report 56
03
Financial
Statements
Consolidated Statement of Total Comprehensive Income 64
Consolidated Statement of Financial Position 65
Company Statement of Financial Position 66
Consolidated Statement of Changes in Equity 67
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
68
69
Notes to the Financial Statements 70
Shareholder Information
102
4
04
Strategic Report | Eckoh Annual Report 2022
5
05
Strategic Report
Eckoh plc (AIM:ECK), the global provider of Customer
Engagement Security Solutions, is pleased to announce
results for the 12 months to 31 March 2022.
Highlights of the Year
REVENUE
£31.8m
£18.6m
UK REVENUE
Up 4% from FY21
Up 3% from FY21
UK 61%
US 39%
US REVENUE
$13.8m
Up 8.1% from FY21
TOTAL
CONTRACTED
BUSINESS
NET
CASH
£22.5m
£2.8m
GROUP
ANNUAL
RECURRING
REVENUE
Up 48%
£25.2m
US SECURE PAYMENT
ANNUAL RECURRING REVENUE
$11.9mUp 82%
£5.2m
ADJUSTED
OPERATING
PROFIT
10%
Up from FY21
ADJUSTED
EARNINGS
PER SHARE
pence
1.57
per
share
5%
Up from FY21
6
08
Strategic Report | Highlights of the Year
7
09
Highlights of the Year
Revenue
Gross profit
US Secure Payments ARR ($m)1
Total ARR1
Adjusted EBITDA2
Adjusted operating profit3
Profit before taxation
Adjusted earnings pence per share4
Adjusted diluted earnings pence per share4
FY22
31.8
25.4
11.9
25.2
6.8
5.2
2.3
1.57
1.34
FY21
30.5
24.2
6.5
17.0
6.4
4.7
3.5
1.49
1.45
Change
+4%
+5%
+82%
+48%
+7%
+10%
(34%)
+5%
(8%)
1 ARR is the annual recurring revenue of all contracts billing at the end of the period Included within Group ARR is all revenue that is contractually committed and an element of UK revenue that
has proven to be repeatable, but not contractually committed
2 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is the profit from operating activities adjusted for depreciation of owned and leased assets, amortisation,
expenses relating to share option schemes, restructuring costs and transactional costs
3 Adjusted operating profit is the profit from operating activities adjusted for amortisation of acquired intangible assets, expenses relating to share option schemes, restructuring and
transactional costs
4 Adjusted earnings pence per share – the Group issued 36 2m new Ordinary Shares during the year in connection with the acquisition of Syntec which results in an increase in the weighted
average shares in issue across the period
Strategic highlights
Financial highlights
• Strong ARR1 growth, especially in the US market, driven primarily
• Strong performance, as previously announced in Trading
by our clients’ need to protect data and comply with increasing
Update on 17 May 2022
regulation without compromising customer experience
• UK business returned to growth with strong second half
shift to cloud
revenues as most client activity recovered
– Adjusted operating profit3 up 10% with successful pivot
• Group ARR1 up 48%, reflecting market opportunity and ongoing
• Transformational Syntec acquisition performing in line with our
expectations with integration on track
– Unification and enhancement of product offering on track
to higher quality earnings following the completed exit
from US and UK Support, which contributed £2m to FY21
adjusted operating profit3
for go-to-market launch in 2022
• US Secure Payments performed strongly:
• As part of our long-term strategic direction, multi-platform
– Revenue up 8%, underlying growth stronger
– US ARR1 increased 82% to $11 9m (FY21 $6 5m), up 38%
cloud-enablement of our offering is driving:
on an organic basis
– Market leadership and competitive advantage
– Scalability into larger client opportunities on an
• UK revenues returned to growth with transactional volumes
international basis, characterised by recent contracts
largely returned to pre-pandemic levels
– Significant cross-sell opportunities and faster deployments
will drive increased client value
– Revenue up 9%, excluding third-party Support or 3% total
– UK ARR1 of £16 5m, up 8% on an organic basis and up 36%
• Realignment of sales capability and go-to-market proposition
including Syntec
to drive top-line growth, and restructuring of cost base to
• Profit before taxation includes £1.0m of transactional costs (in
create greater operational efficiency
connection with the acquisition of Syntec) and £0 9m of one-
off restructuring costs
• Balance sheet remains strong following the Syntec acquisition
with net cash of £2 8m (FY21: £11 7m)
• Increased final proposed Dividend at 0.67p per share (FY21:
0.61p), demonstrating increasing confidence in the ongoing
growth opportunity
Current trading and Outlook
• Current order levels already substantially exceed FY22’s
• First client deployed and live on our new Azure Cloud
first quarter outcome
platform signed new 3-year contract worth $1 5m and a
further contract worth $0 6m to secure live chat agents
• Significant strengthening of Eckoh’s new business pipeline
with digital payments
in the first quarter, including major opportunities for large
blue-chip organisations
• As previously indicated, the Board expects FY23 revenue
– Progress reflects success with our strategy to
pursue larger, higher quality opportunities through
and profit to be significantly higher than FY22, driven by
benefits of the Syntec integration, strong organic ARR1
management action to improve sales function and
growth, operational efficiencies and synergistic benefits
– Renewals post-period end includes our largest
of the Syntec integration
contract scheduled for FY23, worth £2 1m
• The Board is confident of further progress in the year
ahead, supported by an encouraging pipeline, a model
with high recurring revenues and a robust balance sheet
8
08
Strategic Report | Chairman’s Statement
9
Chairman’s Statement
The economic backdrop over the last few years has proven
Eckoh has a resilient business model. In the first half of the year,
the business was still impacted by the COVID-19 pandemic, but
as we exited from the first half, we saw both new business and
the UK volumes returning to normal levels pre the pandemic.
In the last quarter of the year the uncertain macro-economic
conditions have impacted the new business contracted, but
I am pleased to report that since the end of the financial year
business contracted has been encouraging.
During the year the planned exit from the third-party Support
business in the UK and US has been completed. This allows
the team to focus on the Customer Engagement Security
portfolio, which is of a higher quality of earnings and
which will drive the growth expectations both in the
UK and US. The majority of the enhanced products
and services are available globally and we have
the capability to offer our clients a choice of cloud
platform, allowing us to better service global
contracts.
he business acquired Syntec Holdings limited in
December and since acquisition it has performed as
expected and with our strong organic growth, it will
further strengthen our market-leading position
The Board expects revenue and profit for FY23 to be significantly
higher than FY22. This will be driven by synergistic benefits of the
T
Dividend
The Board has increased the proposed dividend by 10% to 0 67
pence per share (FY21: 0 61 pence per share)
Board
Syntec integration, ongoing momentum in the US market, and
expected normal trading activity in the UK; supported by long-
term structural growth drivers and cloud adoption
In the financial year ended 31 March 2022, there were no
significant changes to the Board. Full details of the current
Directors are on pages 34 to 35
Results
Total revenue for the year was £31 8 million, an increase year
on year of 4% (FY21: £30 5 million) or 6% adjusting for constant
exchange rates Excluding the third-party Support business in
FY22 and FY21, revenue was £31 2 million, an increase of 11%
A year ago, I committed to introducing an ARR1 metric for the
entire Group which we have delivered, initially with the US Secure
Payments ARR1 in November results and in this set of results for
the Group Group ARR1 was £25 2 million as at 31 March 2022,
a 48% increase year on year (FY21: £17 0 million), a very strong
outcome demonstrating the high level of visibility we have in
our business model
The Eckoh US Secure Payments ARR1 is $9 0m, an increase of
38% from the same time last year, demonstrating the strong
underlying growth in the business and the strong visibility of
revenues When the Syntec US activity is included, the combined
ARR1 is $11 9 million, an increase year on year of 82%
Corporate Governance
As a Board of Directors, we feel the Quoted Companies Alliance
Corporate Governance Code (QCA Code) is the most appropriate
code for Eckoh plc to apply, given the Group’s size, risk, complexity
and stage of maturity In the Governance section of this report
on page 36, we outline the Company’s approach to Corporate
Governance and how we have complied with the QCA code
The Board considers that it does not depart from any principles
of the QCA code
Our Sustainability Report on pages 28 to 31 provides an update on
our approach to Eckoh’s Environmental, Social and Governance
strategy (ESG) This is an evolving process and we aim to
further develop and evolve our strategy, refine our targets and
deliverables and enhance our reporting in FY23 Full details of the
Company’s Principal Risks and Uncertainties are on pages 20 to 23
People
The prudent cost control the management achieved in FY21
continued into FY22. Adjusted operating profit3 was £5 2 million,
The Board and I would like to welcome the employees from
Syntec to the Group We would also like to thank all employees
an increase of 10% year on year (FY21: £4 7 million)
for their continued commitment and resilience through what has
been a challenging and busy year The collaboration across the
The Group continues to have a strong balance sheet with a year-
team in both the UK, US and Syntec has been exceptional and
end net cash balance of £2 8 million (FY21: £11 7m) The change
has resulted in the significant strides being made in the product
reflects the acquisition of Syntec in December 2021, which was
enhancements and the multi-cloud capability
part-funded by cash In addition, to fund the acquisition, we also
raised funds from Shareholders, and entered into new banking
The whole Board plan to attend the AGM on 26 September 2022
arrangements of £10 million
and we look forward to the opportunity to meet with as many
Shareholders as possible on the day
Going Concern
The Board has carried out a going concern review and concluded
Christopher Humphrey
that the Group has adequate cash to continue in operational
Chairman
existence for the foreseeable future The Directors have prepared
15 June 2022
cash flow forecasts for a period in excess of 12 months from the
date of approving the financial statements. In all scenarios
tested, the Directors were able to conclude that the Group has
adequate cash to continue in operational existence for the
foreseeable future Further information is included in the Directors
Report on page 53
10
Strategic Report | Chief Executive Review
11
09
Chief Executive Review
Eckoh has made significant progress in the last 12 months.
We have shown the resilience of our business model, with
growth in revenue and operating profit and improved quality of
earnings with the completed exit from our Support activity. Our
momentum is underpinned by fast-growing recurring revenues,
with an excellent performance in our US business and a return to
growth in the UK.
We successfully completed the transformational acquisition
of Syntec, which enhanced our position as the largest provider
in our industry. The integration is progressing well and our
unified product suite will extend our market-leading position
in Customer Engagement Security Solutions. Our new multi-
platform, cloud delivery has created differentiation
within our industry by offering greater customer choice,
enabling us to deliver our services efficiently and at scale,
and address significantly larger and global mandates.
We have started the year strongly, and looking ahead
the Board expects FY23 revenue and profits to be
significantly higher than FY22, reflecting our ongoing
organic growth, continued momentum in the US
market, a sustained recovery in UK trading,
and the integration of Syntec. In addition,
we expect our progress to be supported
by long-term structural growth drivers
and increasing cloud adoption, coupled
with the benefits of new products and
operational gearing.
ckoh has had a successful year consolidating our
Gross profit was £25.4 million, an increase year on year of 5%
position as leaders in the growing Customer Engagement
Security market Our new metric of Group ARR1 shows
extremely strong progress and we delivered a robust
level of adjusted operating profit, £5.2 million, an increase of 10%
year on year (FY21: £4 7 million) and ahead of consensus market
E
expectations
(FY21 £24.2 million), with gross profit margin 80%, (FY21: 79%). US
gross profit was £8.5 million (FY21: £8.9 million), with gross profit
margin increasing as expected to 74% (FY21: 71%) The growth in
gross profit margin in the US is aligned with our expectations as
US clients successfully renew their contracts, most new client
deployments are on the cloud platform and there is continued
growth in the Secure Payments activity. UK gross profit was £15.6
We acquired Syntec Holdings Limited in December 2021 and
million (FY21: £15.3 million), an increase of 2% with gross profit
are pleased with our current performance The acquisition,
margin decreasing by 1% to 84%. Syntec gross profit was £1.4
alongside our organic business growth, will further strengthen
million, with an 80% gross profit margin, in line with the Group’s
our market-leading position
gross profit margin.
In our trading and product update in April, we announced the
The prudent cost control we achieved in FY21 has continued
significant enhancements to our Customer Engagement Security
into FY22 We made structural changes to the US Sales team
portfolio, the majority of which are available globally
in the second half and increased our focus on ‘vertical selling’
Our performance shows the resilience of our model and the
our model) We have introduced a global Network Operations
merit of our long-term strategy, given the remaining challenges
Centre (NOC) and also streamlined the US operational team,
presented by the pandemic, the uncertain macro-economic
following the planned and completed exit from the third-party
(targeting sectors such as healthcare, which are well suited to
climate and the planned and completed exit from US and UK
Support business
Support, which had contributed £2 million to the previous year’s
profit. As a result, the Board has increased the proposed dividend
Adjusted operating profit3 was £5 2 million (FY21: £4 7 million),
by 10% to 0 67 pence per share (FY21: 0 61 pence per share)
an increase of 10% year on year After adjusting for the planned
exit from third-party Support, FY22 adjusted operating profit was
Our strong performance reflects ongoing progress in our US
£4 8 million, a year on year improvement of 81% (FY21: adjusted
Secure Payments operation, which now accounts for nearly 90%
operating profit excluding third party Support £2.7 million).
of total US revenues (FY21: 80% of total US revenues) and with the
enhanced global product offerings provides the platform for
Total contracted business for the financial year at the Group level
continued growth and additional cross-selling into our existing
was £22.5 million (FY21: £30.7 million). The first half of the year was
clients, a significant part of our strategy. During the year the UK
challenging for new business and particularly large enterprise
division has continued to recover and the momentum we saw at
contracts with the ongoing impact of the pandemic at the time
the end of the first half has continued into the second half, with
We started to see improvements as the second half started, but
revenue up 9% year on year in the second half, demonstrating
the usual strong final quarter of the year was then impacted
the resilience of our business model
unexpectedly with the global macro-economic challenges
arising from the ongoing conflict in Ukraine. New business won
A year ago, we said we would introduce an ARR1 metric, which we
in the year was £10 8 million (FY21: £15 7 million), an unsatisfactory
did for the US Secure Payments business in our interim results
outcome, but with the continued pandemic challenges in the first
in November At that time, we also committed to include an
ARR1 metric for the entire Group with our full year results, and
half and the macro-economic challenges in the last quarter it
was an understandable result We are, however, very encouraged
we are pleased to have been able to fulfil that commitment.
by trading in the first quarter of the new year, with order levels
Given the transactional nature of some UK revenues, we have
slightly updated our definition of ARR1 since our trading update
in May Group ARR 1 was £25 2 million as at 31 March 2022, a
already significantly higher than last year, and with a much
stronger pipeline
48% increase year on year (FY21: £17 0 million), a very strong
Our balance sheet remains robust with a strong net cash position
outcome demonstrating the high level of visibility we have in
of £2.8 million (FY21: £11.7 million). In the first half of the financial
our business model
year, we repaid the final instalment of the term loan with Barclays
Bank and in December we utilised some of our cash reserves to
Total revenue for the year was £31 8 million, an increase year
part-fund the acquisition of Syntec In addition, and as a result
on year of 4% (FY21: £30 5 million) or 6% adjusting for constant
of the acquisition of Syntec, the Group entered into new banking
exchange rates Excluding the third-party Support business
arrangements with Barclays Bank for a £5 0 million Revolving
in FY22 and FY21, revenue was £31 2 million, an increase of 11%
Credit Facility (RCF) and a £5 0 million overdraft facility As at
Included within these results are three months of revenue
31 March there was no debt drawn under either facility The RCF
from Syntec, which is performing in line with our expectations
is secured against the Group’s UK head office which is an asset
at acquisition
we own outright
12
Strategic Report | Chief Executive Review
13
A clear growth strategy
Our strategic objectives reflect our primary goal to become the global leader in our areas of expertise, and in particular, Customer
Engagement data and payment security
Being the market leader for
Customer Engagement data
and payment security
Maximise client value and
retention through cross-selling
to generate higher levels of
recurring income
Capitalise on the fast-growing
global market for technology
solutions that help protect
customer data
Our strategic
objectives
include:
Evaluate acquisition
Make cloud our primary platform
opportunities that can support
and use cloud technologies
our growth strategy in Customer
to develop and enhance our
Engagement security
proprietary solutions
Highly complementary products and attractive proposition
Historically Eckoh’s go-to-market proposition encompassed two highly complementary areas:
Secure Payment products and Customer Engagement solutions
The overlap between these two areas has always been significant
hardware costs associated with larger customer premise
and has led us to update and unify our proposition into a new
deployments will be reducing, leading over time to an increase
go-to-market vision of Customer Engagement Security Solutions
in operating margin
Going forward all of our customer engagement offerings will be
underpinned with security features and capabilities to assist our
clients to address security concerns and increasing regulation,
New growth drivers in a broadening
but to do so in a way that doesn’t compromise the quality of
their customer’s experience An example of this is our live chat
global market
offering which incorporates our patented and unique ChatGuard
Our target market both in the UK and US for our Secure Payments
capability, that enables payment or personal information to be
proposition has, up to now, been any sizeable enterprise or
entered by a customer in a live chat session without any of that
organisation that either transacts or engages with its customers
information traversing our client’s environment or being shared
at scale and at volume This activity will usually be supported
with an advisor
either by an in-house or outsourced contact centre provider
The greater the volume of payment transactions or customer
In the past our UK operations sold our entire product portfolio,
engagement activity that the organisation has, the more
but in the US - a territory that Eckoh entered six years ago - the
attractive they are to Eckoh, and the larger the contact centre
focus has been on Secure Payments, where we had the greatest
operation supporting the organisation is likely to be
differentiation and the least competition Going forward this
distinction will no longer be the case, with our new product
However, with the advent of a unified go-to-market proposition of
proposition being available to any client in any territory Our
Customer Engagement Security Solutions, enhanced by the new
solutions, which will enable our clients to ‘Engage, Secure
products and delivered through our expanding cloud platforms,
and Protect’ their customers, will all be delivered through our
not only will this naturally extend our reach geographically but
multi-vendor and global cloud platforms, allowing us to better
it will also increase the opportunity within every client account
service international contracts The procurement of security and
With regulation tightening and the financial impact of data
payment solutions to be deployed across multiple territories
breaches and fraud growing, organisations are increasingly
is certainly increasing, and we will continue to invest in and
looking for ways to move beyond the requirement of merely
extend our cloud platforms to support this growth This trend
being compliant to secure themselves more comprehensively,
will broaden our market further and inevitably lead to us having
leading to broadening information security budgets and remits
a blurring of our geo-graphical target markets with Rest of World
(‘ROW’) becoming a more important component of our future
The contact centre industry in both the UK and US is extremely
revenue streams
large, representing around 4% of the entire workforce in both
markets However, the pandemic and the current economic
The growing proportion of cloud deployments we have already
climate is fundamentally changing the way that the contact
seen occur in the US market, alongside the acquisition of Syntec,
centre industry operates and the pressures it has to deal with
means our ability to sell and deliver additional services to clients
is very much enhanced With our product roadmap extending
• The pandemic has forced contact centres to adopt hybrid
our security remit beyond payments and into a broader data
working, increasing security concerns
security proposition we expect to be able to increase the lifetime
• Recruitment and churn are huge problems, making it very
value of our clients and continue to have very low levels of churn
challenging to properly service clients’ needs
• The cost-of-living crisis will accelerate levels of fraud and
As part of the integration of Syntec we have formed a cross-
increase collection issues
company technical group who are working on the unification of
the security product proposition, a project that we have named
In the aftermath of the pandemic there is now a much greater
Syntegration This will lead us to have the ability to deliver all
reliance on contact centre agents working remotely, usually
our Customer Engagement Security Solutions from a combined
from their homes, and that is only going to accentuate security
cloud native code base and have the flexibility of seamlessly
concerns and requirements The trend of remote working
adding new functionality or additional services as desired
for managing customer engagement is almost certainly
• The Group’s patented Secure Payment products help
• The Group’s Customer Engagement Solutions help organisations
by the client, reducing the time to revenue considerably The
a permanent feature, and this can only benefit Eckoh as our
organisations to reduce the risk of fraud; secure sensitive
transform the way they engage with their customers Eckoh’s
first instantiation of this new unified offering is expected to be
security proposition enables companies to effectively further
data; comply with the Payment Card Industry Data Security
proposition enables enquiries and transactions to be performed
available in this calendar year
reduce or remove the risk of data breaches arising from one of
Standard (PCI DSS) and wider security regulations such as the
on whatever device the customer chooses, through any inbound
the most challenging parts of their businesses
General Data Protection Regulation (GDPR) or the US Consumer
communication channel and allows customers to self-serve or to
Client contracts are typically multi-year in length and have a
Privacy Acts Eckoh prevents sensitive personal and payment
engage with a customer service advisor It enables our clients to
high proportion of recurring revenues, usually underpinned by
Furthermore, the contact centre industry is now battling
data from entering IT and contact centre environments when
increase efficiency, lower operational costs and increase customer
minimum commitments With a greater proportion of contracts
with a huge problem of churn and recruitment challenges
customers make payments for goods and services
satisfaction by providing a true Omnichannel experience
being delivered through the cloud the initial set up fees and
as a consequence of the realignment of employees’ career
14
Chief Executive Review
15
aspirations coming out of the pandemic This is unlikely to be
The revenue growth has been tempered in this period by the three
solved easily or quickly and organisations will be looking even
secure payment contracts that successfully renewed for the
more acutely at the utilisation of their human agents and turning
first time during the year, one of which was our largest contract
increasingly to technology to maximise first contact resolution
to date, a $7 4 million 2-year contract that went live in 2019 At
levels and the average handling time for each contact Eckoh’s
the point of renewal, the hardware fees and implementation
new product portfolio will ensure that customers can be dealt
fees are fully recognised and as we see more clients go through
with swiftly and effectively, without compromising their customer
their first renewal, we will see the overall percentage of recurring
experience or the security of their data
revenue continue to increase This is illustrated by the progress in
Lastly, the cost-of-living crisis will inevitably lead to an increase
of 13%, demonstrating both the successful renewals achieved in
in fraud, both from internal employees and external organised
the year and the increased number of clients who deploy on our
recurring revenue, which was 65% (FY21: 52%), an improvement
The ability to offer our clients a choice of cloud platform
External factors, such as the impending change to version 4 of
strengthens our position in the market and the expansion
the Payment Card Industry Data Security Standard (PCI DSS), the
globally of our cloud platforms and capabilities remains one of
implementation of new data laws such as US Consumer Privacy
our key strategic goals One of the big advantages this brings
Acts and significant fines levied on US organisations through
is the speed and ease with which multiple parts of our secure
the GDPR legislation, are undoubtedly helping raise awareness
engagement portfolio can be deployed The client who is now live
of the risks of not protecting sensitive data properly This will
on our Azure platform has entered into two separate contracts
assist us in continuing to build our pipeline which is substantial
with us. The first worth $1.4m over three years is for securing
and growing Our focus on these larger contracts means that in
We continue to see, as expected, the general
acceleration towards cloud deployments and with
our recently announced implementation of a new
Microsoft Azure Cloud platform with a Fortune 100 US
retailer now live, this makes Eckoh the only provider
in our industry to offer alternative cloud providers.
future periods the timing of contract wins
continues to be hard to predict given the
typically longer sales cycle
In the year Coral and Support had a
combined revenue of $1 8 million (FY21:
$3 5 million) and accounted for 12% of
the revenues (FY21:22%) A proportion of
the restructuring costs incurred in the US
in the first half relate to the third-party
Support area of the business and the last
criminals Contact centres are a relatively low paid sector and it
global cloud platform We expect the level of cloud deployments
their voice agents, the second worth $0 6m is to allow them
stage of the restructuring took place in October as we merged
is this tier of employees who arguably will be most badly hit by
to continue at the current level, which will continue to improve the
to securely take digital payments across other engagement
the UK and US Customer Support desks to a global Network
the economic pressures, which may lead to a greater propensity
recurring revenue and the gross profit of the business.
channels, notably live chat This is a good illustration of how
Operations Centre (NOC)
for them to commit criminal acts, whether independently or on
we expect new and existing clients to take multiple parts of our
behalf of organised crime The same economic challenges will
The planned transition to Secure Payments and ultimate exit
portfolio and extend the reach of their overall solution over time
Coral is a browser-based agent desktop that increases efficiency
also lead to greater numbers of consumers becoming either
from the Support activity is now completed, with only $0 5m of
by bringing all the contact centre agent’s communication tools
unwilling or unable to pay off charges for services Managing
revenue in this financial year coming from Support. Over the last
While cloud deployment remains a key goal and advantage,
into a single screen It also enables organisations, particularly
those customers and trying to successfully and sensitively collect
five years Secure Payments has grown at a compound annual
we still expect that many of the largest enterprises will take many
those who have grown by acquisition, to standardise their contact
their payments will require more innovative and effective use of
growth rate of 30% and the quality of earnings going forward
years to achieve that objective, so retaining the capability to
centre facilities, as Coral can be implemented in environments
technology, and Eckoh’s security proposition has proven success
will be enhanced by the exit from the shorter-term Support
deploy as required in a client’s own data centres and environment
that operate on entirely different underlying technology In the
and a demonstrable return on investment in this area
Operational review
US Division (39% of group revenues)
The US business, including the Syntec US activity, represented
39% of Group revenues in 2022 (FY21: 41%) In the US, the Group’s
focus has remained on the US Secure Payments opportunity,
where we deliver a patented solution through the Eckoh
CallGuard brand or Syntec CardEasy brand The product enables
enterprises to take card payments securely within their contact
centre operations and the growth opportunity is underpinned by
long-term structural drivers of tightening regulation, the need to
mitigate the risk of data breaches (and fraud) within our clients’
IT and Contact centre operations and the migration to a greater
level of remote working
As the more extensive Customer Engagement Security offering
delivered through our global cloud platforms is introduced to
the US this year, there is a huge opportunity to cross-sell to
our existing enterprise clients, many of which are the largest
brands in the US market This approach has proven to be highly
successful with our UK clients and will drive continued growth
In the US, Secure Payment revenue was $13 8 million an increase
of 8 1% (FY21 $12 8 million) and 88% of total US revenue (FY21: 78%)
contracts The growth of the US business is further demonstrated
in the new ARR1 metric The Eckoh US Secure payments ARR1 is
$9 0m, an increase of 38% from the same time last year When the
Syntec US activity is included, the combined ARR1 is $11 9 million,
continues to give us a tactical advantage over our competitors
prior period, we secured additional licences and functionality of
The launch of CallGuard Express in the second half, which is
fees, however as we have indicated previously, the timing of Coral
deliberately designed for smaller customers, will see smaller
orders remains hard to forecast and they will be lumpy in nature
$1 0 million in the year In FY22, there were no incremental licence
an increase year on year of 82%
contracts being targeted and won for the first time. This product is
extremely quick to deploy, with very limited operational overhead
This will be the last time that the US is reviewed in the context
Total contracted business was $10 6 million a decrease of 35%
associated with it, so the conversion of a sale into revenue will
of Secure Payments only. With the shift to a unified Customer
(FY21 $15 5 million) The level of new contracts was lower in the
be much faster than on our larger contracts, and margin higher
Engagement Security Solutions proposition we will be
second half than expected, reflecting an unusually quiet fourth
We expect most of these deals to be won through partners and
commenting on our progress across this broader offering and
quarter due to macro-economic conditions and ramifications
more broadly our sales channels continue to strengthen, so
will be able to assess progress in our ability to cross-sell new
of the Ukraine situation The Company remains focused on large
the share of pipeline and revenue from partners is expected to
services into existing clients as well as on boarding new clients
enterprise contracts, and whilst deals were slow to close at the
increase over time Partner sales opportunities now represent
end of the year, the pipeline is stronger than a year ago and
30% of our total pipeline
UK Division, including Syntec UK and Rest of World
encouragingly we have seen much higher levels of activity and
(61% of group revenues)
value of deals closing in Q1 of the new year compared to last
The average length of new contracts for Secure Payments is
During the year the UK division has continued to recover
We continue to see, as expected, the general acceleration
typical in the US for renewals to be annual, often on an auto-
continued into the second half, with revenue up 9% year on
towards cloud deployments and with our recently announced
renew. During the year there were five contracts that successfully
year in the second half, demonstrating the resilience of our
implementation of a new Microsoft Azure Cloud platform with
renewed, one of which was our largest contract signed to date
business model. This provides us with continued confidence
a Fortune 100 US retailer now live, this makes Eckoh the only
($7.4 million over 2 years). There was a significant level of one-off
for the new year coupled with the strong contracted business
provider in our industry to offer alternative cloud providers
fees in this contract, which were fully recognised in the first half.
already achieved in the first quarter to date.
This particular client actively chose to deploy onto the Azure
In the second half of the year there were two contracts, which
platform, illustrating that there are sensitivities and preferences
are both on an annual auto-renew as described above, they are
Revenue in the year was £18 6 million (FY21 £18 0 million) an
that clients will have that will influence their choice of
now in their fourth and fifth year showing similar lifecycle values
increase of 3%, this is particularly pleasing given the challenging
cloud provider
to our UK clients
beginning to the year, when the country remained impacted by
three years which is comparable to the UK, however, it is more
and the momentum we saw at the end of the first half has
16
Strategic Report | Chief Executive Review
17
the pandemic When the third-party Support revenue is excluded
increase the lifetime value of the Group’s customers £3 6 million
in FY22 and FY21, the underlying growth was 9% from £16 8 million
of the new business secured in the year (FY21: £3 5 million) was
Digital Payments
to £18 3 million Recurring revenue has decreased to 80% from 84%
contracted with existing customers for delivery of new solutions
Blending digital security with live person interaction, Eckoh’s Digital
in FY21 partly due to the planned exit from third-party Support
or modifications. Our strong track record with existing clients has
Payments can be extended to any customer engagement channel
also continued to be demonstrated through the extremely high
Organisations can now provide their customers with a secure payment
UK clients are contracted through a range of commercial models
proportion of clients that are successfully renewed
that have evolved over time, unlike the newer US business
link triggered by the agent from an engagement on a chat or messaging
session or via an email The agent can monitor the progress of the
(including Syntec US activity), which operates entirely on fixed
New business wins, consistent renewals of existing clients and the
payment process in a similar way to our voice security product, and
fee contracts Where the commercial model is transactional,
improved transactional volume from our long-standing clients
without any exposure to any of the data It also offers the consumer
which is common, it is usual for a client to commit to a high
give us high revenue visibility and our UK clients are underpinned
traditional card payment or popular alternative payment methods
percentage of its expected volumes and in so doing achieve
by contractual fees or minimum transaction levels We expect
like PayPal, ApplePay or GooglePay Digital Payments is now available
the most competitive buying rate The portion of a client’s
the improvement in transactional revenues seen in the second
globally through Eckoh’s multi-cloud platforms, the latest addition
revenue that is not committed is generally repeatable, even
quarter to continue into the second half, subject to no further
to the broadening security product range that is facilitating greater
as we saw in the pandemic, where the UK activity levels were
lockdowns being implemented
opportunities for cross-selling into Eckoh’s extensive client base
very significantly impacted but the revenue impact was only
around 10% In introducing the Group ARR1 metric, we have had
Syntec contributed £1 7 million of revenue and £0 3 million of
to make an assumption on the revenue that is not contractually
operating profit in the final quarter of the financial year. This was
committed but is, and has been, repeatable Based on this view
UK ARR1 at the end of the period was £16 5 million, a 36% increase
consistent with our expectations at the time of the transaction,
and the integration of the businesses is proceeding on plan
including Syntec, 8% of which was organic
Unification of the technology and product offering is making
progress and we expect to deliver a unified and enhanced go-
Gross profit in the year was £15.6 million, an increase of 2% (FY21:
to-market proposition in 2022
£15 3 million) and gross margin in the UK decreased in the period
by 1% to 84% (FY21: 85%)
Total contracted business was £13 3 million compared to £18 9
million in the prior year and new contracted business was £5 0
million compared to £5 9 million, a 14% decrease year on year
Total contracted business can be impacted by the timing of
particularly large renewals, for example, in FY21 we completed a
six-year contract renewal with Capita for the provision of services
for the Congestion Charge to Transport for London, at a minimum
contract value of £4 million In FY22 we completed important
renewals with amongst others Premier Inn, Rail Delivery Group,
Thames Water and Boots, but these were comparatively smaller
than the Capita agreement. There was only one significant client
that was not renewed in the period, who were contracted through
a partner, and migrated to a different solution, this was the first
such non-renewal for many years. Since the financial year end,
Product update
In April we announced significant enhancements to our Customer
Engagement Security portfolio to assist organisations in protecting
their customers’ payment and personal data in more efficient
and diverse ways
The enhancements support Eckoh’s strategic goals to capitalise
on the structural developments in the global market and to use
cloud technologies to develop and enhance our proprietary
solutions while maintaining a market leading position for
Customer Engagement data and payment security These new
enhancements included:
Secure Chat
we have successfully renewed our largest contract scheduled for
Eckoh’s Live Chat product is used by large enterprises
this financial year, a contract through Capita for a large public
that need the most versatile customisations and
service organisation, which was £2 1 million over the term
integrations plus the ability to scale to support the largest
and most demanding requirements – something that
Looking at the segmentation of UK revenue, 28% came from Secure
off-the-shelf Chat products cannot provide With a new
Payment services (FY21: 27%), 32% from Customer Engagement
redesigned interface based on extensive client feedback,
Solutions (FY21: 36%) and the remaining 40% from clients where
agents and customers can now enjoy an even slicker
we provide a combination of both solutions (FY21: 37%) The shift
and more convenient experience that is fully cloud-
from Customer Engagement Solutions to clients with combined
hosted, allowing for sudden and significant fluctuations
solutions is principally due to the improving volumes from our
in demand With Eckoh’s unique and patented product
larger clients who take both the Secure Payments solution and
ChatGuard built-in as standard, organisations can take
the Customer Engagement Solution
fast in-chat payments with the reassurance of full PCI
DSS compliance Eckoh’s Secure Chat is the only service
Our model of cross-selling to existing clients remains a key part of
to offer this capability and this updated version is now
the Eckoh strategy, not just to generate incremental revenue but
available globally and is expected to add significant value
also to continue the trend of strong client retention and to further
to the security proposition
Speech technology expansion
Eckoh has a long and successful history of speech-
based applications and is leveraging that knowledge by
enabling even more languages for the speech option in
our security solutions. A new five-year contract, which was
a significant cross-sell into a Syntec account, will see 18
different languages being implemented across the global
estate of an international travel business
CallGuard Express
CallGuard Express is designed to make compliance
and security straightforward for any business It offers
companies of any size the same security functionality and
credentials of CallGuard, but without the customisation
and managed service that larger companies often
require This enables CallGuard Express to be quick to
deploy, simple to use and with a lower-cost entry point
CallGuard On-Demand
As well as standalone businesses, this new proposition
In response to the increasingly rigorous Payment Card
is also available to resellers through a partner program,
Industry Data Security Standards (“PCI DSS“), Eckoh has
enabling them to switch on new clients within days with
developed an on-demand option for organisations
who may have low or variable volumes of payments
but still require the reassurance of full compliance This
enhancement gives the contact centre agent the ability
to invoke CallGuard only when a payment is taken, rather
than all calls needing to traverse through the system
no integration required
Amazon Connect
During FY22 we have invested in progressing the delivery of
Eckoh solutions that include Amazon Connect as the cloud
telephony layer When combined with Eckoh’s Customer
Engagement Security Solutions this creates a compelling
bundled solution that will enable Eckoh clients to have
complex and feature-rich cloud customer engagement
but delivered in a truly flexible, agile and most importantly
secure way
18
Strategic Report | Chief Executive Review
19
Syntegration
Outlook
Creating a new cloud delivered Customer Engagement
The balance sheet remains strong with net cash of £2 8m (FY21:
Security offering
£11 7m), well ahead of expectations The reduction from last year
‘Syntegration’ is an in-flight project to bring the best of Eckoh and
reflects the completed acquisition of Syntec in December 2021,
Syntec’s existing products and technologies together, and build
which was part funded from our cash reserves
a unified platform and roadmap for future new capability. Both
companies core development teams have been working as one
The Board expects revenue and profit for FY23 to be significantly
cohesive unit to take all the best elements of each product and
higher than FY22. This will be driven by synergistic benefits of
bring them together into a truly world-class product suite It will
the Syntec integration, ongoing momentum in the US market,
provide a seamless upgrade path for current clients to benefit
and expected normal trading activity in the UK; supported by
from all the same capabilities as future clients
long-term structural growth drivers and cloud adoption The
Board is confident of further progress in the year ahead, with
Both Eckoh and Syntec already had well-established, successful
an encouraging pipeline, a model with high recurring revenues
products in the market, having benefitted from many man-years
and a robust balance sheet, coupled with the benefits of new
of initial development coupled with subsequent enhancements
products and operational efficiencies. These expectations are
and fine tuning based on feedback from some of the world’s
subject to ongoing uncertainty in the macro-economic climate
largest brands The combination of the two products not
only enhances the core security aspects of the platform, but
Nik Philpot
also extends capability to new features almost immediately
Chief Executive Officer
and creates an extensive roadmap for future innovation
15 June 2022
The Board expects revenue and profit for FY23
to be significantly higher than FY22. This will
be driven by synergistic benefits of the Syntec
integration, ongoing momentum in the US
market, and expected normal trading activity
in the UK; supported by long-term structural
growth drivers and cloud adoption.
With each solution having its own unique strengths, Eckoh has
capitalised on these, bringing them together in a re-worked
code base, plugging in additional capabilities and deployment
models, and leveraging advances in cloud technology that
have emerged in the last five years. As Eckoh’s CallGuard and
CardEasy brands will now both benefit from the cross-pollination
of features, many near-term roadmap items will be brought to
fruition via this ‘Syntegration’ rather than net-new development
Further, our long-term roadmaps now culminate into a single
vision where new features can be developed and released on
an accelerated timeline with the larger and more integrated
research and development team
The benefits of Syntegration are wide ranging, not only
strengthening Eckoh's product proposition and partner
integrations, but also delivering a significant number of
operational efficiencies and reduced cost of ownership. Some
key benefits of the new offering will be:
• Best of both product sets
• Cloud agnostic
• Increases automation and agent efficiency
• Seamless upgrade path for all customers
• Reduces the total cost of ownership by lowering
the cloud footprint (less computing power)
• Brings together an unrivalled stable of out-the-box
integrations
• Fits any deployment model we have encountered
• Delivery through configuration rather than bespoke
development
• Provides the backbone for our Customer Engagement
Security roadmap
• Combines architectural and engineering expertise
with a growing patent portfolio
20
Strategic Report | Principal Risks & Uncertainties
21
Principal Risks & Uncertainties
The Group’s approach is to minimise exposure to reputational, financial and
operational risk, while accepting and recognising a risk/ reward trade-off
in the pursuit of its strategic and commercial objectives. The nature of the
products and services the Group provides, means that the integrity of the
business is crucial and cannot be put at risk.
The Group has a framework for reviewing and assessing these risks on a
regular basis and has put in place appropriate processes and procedures
to mitigate against them. However, no system of control or mitigation can
completely eliminate all risks. The Board has determined that the following
are the principal risks facing the Group.
Specific Risk
Mitigation
Cyber, technology & processes
Loss or inappropriate usage of data
The Group has established physical and logical security
The Group’s business requires the appropriate and
secure usage of client, consumer and other sensitive
information Fraudulent activity, cyber-crime or
security breaches in connection with maintaining
data and the delivery of our products and services
could harm our reputation, business and operating
results
controls across all operating locations with rigorous cyber
security controls In addition, a dedicated Security Operations
Centre function provides Group wide monitoring, recruitment
and training schemes and active threat hunting During
the year, and as a result of the Ukraine/ Russia conflict, the
Group signed up to the National Cyber Security Centre which
aided the monitoring of increased cyber activity Continued
investments are made in cyber security, infrastructure,
monitoring and services, improvements in email and web
filtering as well as the introduction of enhanced data loss
prevention tools The Group also screens new employees
carefully Eckoh has maintained its program of PCI DSS,
ISO27001 and Cyber Essentials Acquired in the year, Syntec
also operate to these same standards However, Eckoh will
integrate our programs for efficiency.
Interruptions in business processes or systems
Comprehensive business continuity plans and incident
The Group’s ability to provide reliable services largely
depends on the efficient and uninterrupted operation
of our platforms, network systems, data and contact
centres as well as maintaining sufficient staffing levels.
System or network interruptions, recovery from fraud
or security incidents or the unavailability of key staff
or management resulting from a pandemic outbreak
could delay and disrupt our ability to develop, deliver or
maintain our products and services This could cause
harm to our business and reputation, resulting in loss of
customers or revenue
management programmes are maintained to
minimise business and operational disruptions,
including system or platform failure Testing and
confirmation of plans is performed to ensure business
continuity relevance and training is maintained In
addition, and as a result of the COVID-19 pandemic,
the business operates a hybrid working policy, where
all staff who were previously office-based, now work
regularly between office and home as required. This
provides greater resilience to the business and ensures
we are able to maintain high service levels at all times
We continually monitor our suppliers to ensure the
components we require for our on-site solution in the
US are available
Legal, regulatory and industry standards
Risk of non-compliance with legal and industry standards
We continually audit, review and enhance our controls,
The Group’s operations require it to be compliant with
certain standards including Payment Card Industry
Data Security Standard (PCI DSS) and wider security
regulations such as the General Data Protection
Regulation (GDPR) or the US Consumer Privacy Acts
Failure to comply with such regulations and standards
could significantly impact the Group’s reputation and
could expose the Group to fines and penalties.
processes and employee knowledge to maintain good
governance and to comply with legal requirements and
industry standards Our new employees are carefully
screened
22
Strategic Report | Principal Risks & Uncertainties
23
Specific Risk
Mitigation
Specific Risk
Mitigation
Legal, regulatory and industry standards
Economic growth
Loss or infringement of intellectual property rights
The Group, where appropriate and feasible, relies upon
Executing the US opportunity
a combination of patent and trademark laws to protect
our intellectual property The Group also continues to
monitor competitors in the market to identify potential
infringements of our intellectual property rights
The Group would vigorously defend all third-party
infringement claims
The Group’s success depends, in part, upon proprietary
technology and related intellectual property rights Some
protection can be achieved but, in many cases little
protection can be secured Third parties may claim that
the Group is infringing their intellectual property rights
or our intellectual property rights could be infringed by
third parties If we do not enforce or defend the Group’s
intellectual property rights successfully, our competitive
position may suffer, which could harm our operating
results We may also incur cost from any legal action that
is required to protect our intellectual property
HR & personnel
Dependence on recruitment and retention of highly
The Management team reviews key individuals
skilled personnel
The ability of the Group to meet the demands of the
market and compete effectively is, to a large extent,
dependent on the skills, experience and performance of
its personnel Demand is currently exceptionally high for
individuals with appropriate knowledge and experience
in payment security, IT development, telecoms and
support services The inability to attract, motivate or
retain key talent could have a serious consequence on
the Group’s ability to service client commitments and
grow our business
Products & clients
regularly and career development plans are put in
place for individuals. Compensation and benefits
programmes have been reviewed and during 2022
a larger number of Managers and employees than
previously have been granted share awards to ensure
Eckoh remains competitive in the marketplace
Employee feedback is encouraged and an employee
engagement survey has been undertaken in the year
Technological & product development
The Group is committed to continued research and
The Group provides technical solutions for clients and
their end customers As customer preferences and
technology solutions develop, competitors may develop
products and services that are superior to ours, which
could result in the loss of clients or a reduction in revenue
investment in products and technology to support its
strategic plan Product development roadmaps for
Secure Payment and Customer Engagement solutions
are managed centrally in the UK
Dependence on key clients
While the Group has a wide customer base, the loss of a
key customer, or a significant worsening in their success
or financial performance, could result in a material
impact on the Group’s results Eckoh’s largest customer
accounted for less than 10% (2021: 11 6%) of total revenue
We mitigate this risk by monitoring closely our
contract performance, churn and renewal success
with all customers by maintaining strong relationships
We continue to expand our customer base,
particularly in the US business
The Group sets clear targets for growth expectations for
the US business We continually assess our performance
and adapt our approach, taking into account our actual
and anticipated performance Product offerings are
being extended to expand the reach of the services
offered in the US Cloud-based solutions have been
adopted to ensure Eckoh offer all potential solutions that
clients may demand
We regularly review and assess our exposure to changes
in exchange rates The Group does not hedge the
translation effect of exchange rate movements on the
Income Statement or Balance Sheet of the US division
The Group has a low market share in the US, where there
is significant market opportunity for its Secure Payments
products The inability to execute in the US, winning new
clients and implementing Secure Payment solutions
for clients, could have a material impact on the
Group’s results
Exchange rate
The Group is exposed to the US dollar and the
translation of net assets and income statements of its
US division and, following the acquisition of Syntec, is
also exposed to client contracts denominated in US
dollar and Euros
Reputation of the Eckoh Group
Damage to our reputation and our brand name can
We address this risk by recognising the importance of our
arise from a range of events such as poor solution
reputation and attempting to identify any potential issues
design or product performance, unsatisfactory client
quickly and address them appropriately We recognise
services and other events either within, or outside, our
the importance of providing high quality solutions, good
control
client services and managing our business in a safe and
professional manner Eckoh has concluded its program of
ISO 9001:2015 certification to further audit these measures.
Unchanged risk
Increased risk
24
Strategic Report | Financial Review
25
Financial Review
Eckoh has had a successful year and delivered a robust
level of adjusted operating profit, £5.2 million, an increase of
10% year on year (FY21: £4.7 million) and ahead of consensus
market expectations.
We acquired Syntec Holdings Limited in December 2021 and
their results for the three months to 31 March 2022 are included
in the below review.
evenue for the year increased by 4% to £31 8 million
(FY21: £30 5 million) and at constant exchange3 rates
by 6%. Adjusted operating profit1 was £5 2 million an
increase of 10% year on year (FY21: £4.7 million). Profit
after tax for the year was £1 6 million, compared to £2 8 million in
FY21. In the current year profit after tax of £1.6 million, there are £1.0
million of transaction costs relating to the acquisition of Syntec
R
Divisional performance
Revenue in the UK, which represents 59% (FY21: 59%) of total group
revenues, increased by 3 1% to £18 6 million (FY21: £18 0m) The US
represented 36% (FY21: 41%) of total group revenues and revenues
decreased in the period by 7 7% to £11 5 million (FY21: £12 4m) After
excluding the exited third-party Support business in prior years,
and restructuring costs of £0 9 million The restructuring costs
revenues increased by 4 9% Syntec revenue was £1 7 million, or
include redundancy and contract termination costs following the
5% of total group revenues, in line with expectation at acquisition
acquisition of Syntec and redundancy costs in Eckoh US following
Revenues in local currency grew by 5 7% year on year
the restructuring of the Sales team and the completion of the exit
of the third-party Support business
Following the acquisition of Syntec, whose business is split across
the US, UK and Rest of World (ROW), the increasing frequency
Basic earnings per share for the year ended 31 March 2022 was
of contracting on a global basis with clients and the increased
0 59 pence per share (FY21: 1 09 pence per share) Adjusted
global deployment of our products as we increase our product
earnings per share for the year ended 31 March 2022 was 1 57
availability globally through our multi-cloud offering, we will
pence per share (FY21: 1 49 pence per share)
review the most appropriate and meaningful approach to
Including the Syntec US revenues
with Eckoh’s US division, means US
measure the success of our business Including the Syntec US
revenues with Eckoh’s US division, means US revenues account
for 39% of revenues, the UK and ROW 61%
revenues account for 39% of revenues,
Further explanations of movements in revenue between the US
and UK divisions, including Syntec have been addressed in the
the UK and ROW 61%.
Operational Review above
FY22 (UK)
£'000
FY22 (US)
£'000
FY22 (Syntec)
£'000
FY22 Total
£'000
FY21 (UK)
£'000
FY21 (US)
£'000
FY21 Total
£'000
Revenue
Gross Profit
Gross Profit %
18,596
15,593
84%
11,487
8,473
74%
1,697
1,357
80%
31,780
25,423
80%
18,037
15,299
85%
12,449
8,896
71%
30,486
24,195
79%
Gross profit
The Group’s gross profit increased to £25.4 million (FY21: £24.2
margin is expected to remain at 84-85% In the US, we would
million). Gross profit margin was 80% for the year, an increase of
expect the gross profit margin to continue to increase from
1% year on year (FY21: 79%). The UK gross profit margin decreased
74% to approx 76% over the next two years This is driven by the
by 1% to 84% In the US, the full year margin increased from 71%
continued growth of the Secure Payments’ activities for cloud
to 74% as previously indicated, due to the continued increase in
solutions coupled with clients renewing their contracts without
Secure Payments and particularly in the cloud environment, the
additional significant hardware. Syntec has a mixture of business
planned transition away from the third-party Support business
delivered in the US, UK and ROW, with deployments typically
and the impact of one-off Coral licences in the prior year
through its hosted cloud platform for its UK and ROW business,
with the US business having a mixture of on-site deployments
In the UK, as the service is hosted on an Eckoh platform, there is
and more lately cloud deployments, the gross profit margin is
typically no hardware provided to clients and the gross profit
expected to remain at approx 80%
26
Strategic Report | Financial Review
27
Administrative expenses
Finance charges
Cashflow and liquidity
Dividends
Total administrative expenses for the year were £23 0 million
(FY21: £20 6 million) Adjusted administrative expenses4 for the
For the financial year ended 31 March 2022, the interest payable
Gross cash at 31 March 2022 was £2 8 million (FY21: £12 7 million),
Post year end the Directors are recommending that a final
charge was £74k (FY21: £87k) The interest charge is made up of
as at 31 March 2022 there was no drawdown of debt (FY21:
dividend for the year ended 31 March 2022 of 0 67 pence per
year were £20 2 million (FY21: £19 4 million) The prudent cost
bank interest of £23k (FY21: £54k) and interest on leased assets of
£1 0 million debt) In April and July 2021, the Company made
Ordinary Share be paid to the Shareholders whose names
the two final quarterly repayments of £1.0 million of the loans
appear on the register at the close of business on 23 September
outstanding to Barclays Bank in accordance with the terms of
2022, with payment on 21 October 2022 The ex-dividend date will
the term loan During the second half of the year and as a result
be 22 September 2022 This recommendation will be put to the
of the acquisition of Syntec, we utilised our cash reserves to
Shareholders at the Annual General Meeting Based on the shares
part-fund the acquisition, raised funds from Shareholders and
in issue at the year end, this payment would amount to £2 0m
the Group secured a new £10 million debt facility with Barclays
Bank, which comprises a £5 0 million overdraft and a £5 0 million
Revolving Credit Facility During the year, there has been a net
Chrissie Herbert
cash outflow from working capital of £1.7 million (FY21: £2.3 million
Chief Financial Officer
cash outflow) due to the timing of invoicing and cash receipts
15 June 2022
and as the deferred revenue for the US large on-site deployments
has been recognised over the term of the contract, generally
three years
1 Adjusted operating profit is the profit before adjustments for expenses relating to share
option schemes, amortisation of acquired intangible assets, restructuring costs and costs
relating to business combinations
2 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is the
profit from operating activities adjusted for depreciation of owned and leased assets,
amortisation, expenses relating to share option schemes, restructuring costs and costs
relating to business combinations
3 At constant exchange rates (using last year exchange rates)
4 Adjusted administrative expenses are administrative expenses excluding expenses relating
to share option schemes, depreciation of owned and leased assets, amortisation of
acquired intangible assets, restructuring costs and costs relating to business combinations
5 Total contracted business includes new business from new clients, new business from
existing clients as well as renewals with existing clients
control achieved in FY21 has continued into FY22, we made
£51k (FY21: £33k)
structural changes to the US Sales team at the end of the first half
and increased our focus on ‘vertical selling’ (targeting sectors
such as healthcare, which are well suited to our model), we have
introduced a global Network Operations Centre (NOC) and also
streamlined the US operational team, following the planned and
completed exit from the third-party Support business Included
in administrative expenses is a trading foreign currency loss of
£0 1 million (FY21: £0 4million loss)
Profitability measures
Adjusted operating profit1 was £5 2 million, an increase of 10 1%
year on year (FY21: £4 7 million) Included in the year was a foreign
currency loss of £0 1 million (FY21: loss £0 4 million) and nil Coral
licences (FY21 £0 3 million) Adjusted EBITDA2 for the year was £6 8
million, an increase of 7 6% year on year (FY21: £6 4 million)
Year ended 31
March 2022
£'000
Year ended 31
March 2021
£'000
Profit from operating activities
2,386
3,550
Amortisation of acquired
intangible assets
Expenses relating to share
option schemes
Restructuring costs
Costs relating to business
combinations
Adjusted operating profit1
Amortisation of other intangible
assets
Depreciation of owned assets
Depreciation of leased assets
751
241
866
985
5,229
392
680
495
663
536
-
-
4,749
398
704
505
Taxation
For the financial year ended 31 March 2022, there was a tax charge
of £743k (FY21: £717k charge). The effective tax rate in the financial
year ended 31 March 2022 was 43 8% (FY21: 20 4%) The current
year tax rate is impacted by the non-deductible nature of the fees
relating to the transaction of Syntec and the reversal of deferred
tax on the share options for the Exec Directors which are unlikely
to vest in July 2022
Earnings per share
Basic earnings per share was 0 59 pence per share (FY21: 1 09
pence per share) Diluted earnings per share was 0 51 pence per
share (FY21: 1 06 pence per share) Adjusted diluted earnings per
share was 1 34 pence per share (FY21: 1 45 pence per share)
Contract liabilities and contract assets
Contract liabilities and contract assets relating to IFRS 15 Revenue
from Contracts with Customers have decreased in the current
year, principally as new contracted business in the US has been
predominantly for cloud-based solutions Where clients contract
for their services to be provided in the cloud or on our internal
cloud platform, the level of hardware is significantly reduced and
implementation fees are typically lower This reduces the level
of upfront cash received but drives a greater level of revenue
visibility and earnings quality Total contract liabilities were
£12 5 million (FY21: £11 3 million), included in this balance are £9 5
million of contract liabilities relating to the Secure Payments’
product, hosted platform product or Syntec’s CardEasy Secure
Payments product, a decrease of £1 8 million at the same time
in the previous year Contract assets as at 31 March 2022 were
Adjusted EBITDA2
6,796
6,356
£3 8 million (FY21: £4 4 million)
Statement of financial position
While Eckoh continues to innovate by developing new products
and features such as those detailed in the Chief Executive
Officer’s review, little of this is capitalised on the balance sheet
with only £0 3 million (FY21: £0 4m) added in the year to the value
of the intangible assets of the Company While taking a prudent
approach to capitalising salary cost, which reduces reported
profit, management believes this approach gives an accurate
reflection of the trading performance of the Company.
28
Strategic Report | Sustainability Report
29
Sustainability Report
Social
Fundamentally we are committed to running our business in a sustainable
Our employees are central to the long-term success and sustainability of our
manner, which allows us to meet the needs of our stakeholders, have a positive
business.
impact on the communities in which we operate and through the products and
solutions we deliver for our clients have a positive impact on the wider society
by securing and protecting payment and personal data.
Over the last year we have been formulating our Environmental,
We all have a part to play and the Board and I are firmly committed
Social and Governance strategy (ESG) This is an evolving process
to ensuring that Eckoh enhances its sustainability initiatives
and we aim to further develop and evolve our strategy, refine our
There are also continuing issues around inclusivity, diversity and
targets and deliverables and enhance our reporting in FY23
opportunity in wider society to which Eckoh can contribute
Governance
We aim to attract and retain the best and most engaged people
We have a talented mix of employees from diverse backgrounds,
in our industry and we recognise the value of all our employees
which brings a high level of innovation and collaboration
and that the success of Eckoh is due to their efforts
Our values sit at the heart of the culture at Eckoh and are
summarised below
E
ncourage
C
hallenge
K
nowledge
O
wnership
H
umanity
Encourage
Challenge
We Encourage and
support everyone to grow
with Eckoh
We Challenge, listen, and
are open minded to change
and suggestions from others
Our purpose, business model, strategy and Board operations are focused on
delivering long-term benefits for all of our stakeholders while maintaining a
Knowledge
Ownership
Humanity
high standard of ethical business conduct.
These responsibilities are embedded in our culture, our values
As we operate in the UK, US and Europe, we process data
and our purpose We are committed to conducting our business
compliantly with data privacy legislation, this covers principally
with honesty, integrity, trust and respect and it is expected that
the General Data Protection Regulation ("GDPR") in the EU and
these high standards be maintained throughout the organisation
the UK and the California Consumer Privacy Act ("CCPA") in North
As a UK company, we are bound by the laws of the UK, including
America
the Bribery Act 2010, in respect of our conduct within and outside
Eckoh has been a PCI-DSS Level 1 Service Provider for 12 successive
As trusted advisors, we use our
We take personal Ownership
We are welcoming, embrace
of the UK In addition, we uphold all laws relevant to countering
years Our Secure Payments products and solutions, provide a
Knowledge to solve challenges
to strive for excellence in
diversity and respect each other
bribery and corruption in all the jurisdictions in which we operate
robust and secure payments solution for our clients, enhancing
and deliver the best for our clients
whatever we do
in a spirit of true Humanity
their governance, enabling our clients' contact centre agents to
With respect to The Modern Slavery Act, neither the Company
take payments securely and preventing the exposure of sensitive
or any of its subsidiaries permit, condone or otherwise accept any
customer data to contact centre agents Our products keep
form of human trafficking or slavery in its business or supply chains.
payment data out of our clients' processes and systems, which
not only lessens the burden of compliance for them, but also
Through our whistle-blowing policy, we encourage our
reduces fraud risk, the impact of a data breach and in turn makes
employees to raise any instances of irregular conduct in the
the world a safer place to live in
workplace and thus supporting our commitment to ensuring
that all practices and procedures in respect of all employees,
partners, clients and suppliers are of the highest quality
30
Strategic Report | Sustainability Report
31
We draw on our humanity value in the way we treat each other,
We encourage young school leavers, who may have been
our clients, partners and suppliers and also how we interact
working in our UK contact centre, to progress from their roles as
with our local community. We recognise the significant benefits
agents to junior roles in the organisation In the last year we have
of a diverse workforce and we do not tolerate discrimination,
had a number of success stories where employees have been
harassment, or victimisation in the workplace, instead we
appointed into junior roles or have progressed from these junior
encourage an inclusive workplace where all staff can feel
roles into more senior positions within the organisation
comfortable about who they are
Throughout the year we communicate through informal and
our people, as well as enabling high achieving employees to
Our investment in our employees helps to retain and motivate
formal channels to keep employees across the business up to
progress and flourish in their role.
date on business strategy and our goals, business performance
and more day-to-day initiatives and we organise fun, team
A fair remuneration policy is adopted across Eckoh and we offer
building events
a comprehensive benefits package to our employees, based on
the local market conditions
We strongly believe our employees are a
valuable resource and should be listened
to Through the pandemic we ran regular
surveys focusing on our employees' well-
being and challenges they were facing
through the pandemic On returning to
the office on a more permanent basis,
we listened to our employees and as a
result adopted a balanced hybrid work
We strongly believe our employees are a valuable
resource and should be listened to. We carry out an
annual survey allowing employees to feedback on
a broad basis. We take their feedback seriously and
work with them on action plans for improvement.
approach between the office and home, ensuring there is
In order to provide a wider population of employees with an
sufficient time in the office for collaboration for the benefit of the
opportunity to become Eckoh Shareholders, which promotes
business, but also listening and understanding our employees'
alignment to Shareholder interests and aids recruitment and
requests for working from home We also carry out an annual
retention, we operate a Share Incentive Plan (SIP) for UK employees
employee survey, which allows our employees to provide
and an Employee Stock Purchase Plan (ESPP) for US employees
feedback on a broader basis We take the feedback seriously
These share option plans were launched in the financial year
and work with employees through focus groups on action plans
ended 31 March 2017 for the SIP and 31 March 2019 for the ESPP
for improvements
At Eckoh, our employees are encouraged and supported to give
Eckoh’s strength lies in the expert knowledge of our people It is
something back to our local community We do this through
vital that our employees understand, and are passionate about,
supporting local and national causes, raising money for charity
our products and technologies Every new employee to Eckoh
Each Christmas, Eckoh employees choose a charity they would
undergoes a detailed and thorough induction plan The induction
like to support Last Christmas the UK team chose to support DENS,
not only welcomes them to the business, but it provides them
helping build lives, which is a charity for people local to the UK
with a comprehensive overview of Eckoh, insight into our market
office in Hemel Hempstead. The aim of the charity is to be the first
proposition, our range of products, the security requirements of
port of call for people in Dacorum who are facing homelessness,
the Payment Card Industry Data Security Standard (PCI DSS),
poverty and social exclusion The US team chose to support The
the organisational structure and our commercial model Every
Salvation Army, whose services are diverse and responsive to the
induction plan is tailored to the individual’s role, setting them up
realities of life in the communities we serve In total the money
to be successful in their new role
donated through money raised by employees and a Company
contribution was £1,538 for DENS and $1,500 for The Salvation
We encourage our people to continue to develop their skills and
Army. A number of employees based in the US Omaha office also
keep up-to-date with new technology, standards and processes
adopted a family at Christmas through The Salvation Army
Training needs are identified through the regular check-in that
team members have with their line managers Training can be
In addition, and in response to the humanitarian crisis in Ukraine
a mixture of on-the-job training, external courses and internally
in March, Eckoh contributed £10,000 to the Disasters Emergency
run management development courses
Committee (DEC) and also matched contributions made by
employees, giving a total donation from Eckoh and our employees
Given the nature of our business there are regular security
of £26,900
awareness initiatives and training sessions for employees across
the business
Environment
ckoh aims to minimise the environmental impacts of
We do not provide company vehicles to employees or Directors
E
its business activities and its employees Sustainable
business practices will play an increasingly important
part of our ability to grow and continue to be successful
As a technology company we are not involved in any energy-
intensive manufacturing processes nor do we generate significant
waste Our services are provided to our clients either through the
or operate any form of vehicle fleet and offer our UK employees
a cycle to work scheme to promote healthy living practices and
further reducing pollution from daily commuting
Within our offices, we engage in recycling programmes, wherever
possible, within the parameters of our offices. All our offices and
cloud or via our hosted platform, our largest energy consumption
communal working areas lights are LED, with energy efficient and
comes from our data-centres rather than our offices. Whilst our
motion sensor lighting, thus reducing the electricity the Company
environmental impact is low compared with other sectors, we do
uses on an on-going basis
recognise that sustainability is a constantly evolving issue and
we recognise the need to respond appropriately and reduce our
We encourage our teams to adopt digitalisation and go paperless
contribution to global climate change
and we have reduced the usage of printers and photocopiers
The COVID-19 pandemic brought with it a number of operational
In the year to 31 March 22 we have started to measure our
changes, including many that reduced our environmental
energy use and impact under the Standard Energy and Carbon
impact. These included a significant reduction in business
Reporting (SECR) regulations From next year we will be required
travel, especially trans-Atlantic flights or inter-state flights in
to report our usage and will do so with our comparatives for the
the US. We have developed a more flexible hybrid working model
year just finished. Through this energy reporting we will look to
since returning to our offices both in the UK and US, which will
identify ways of reducing and offsetting our carbon emissions
enable employees to work from home more of the time, thereby
reducing the impact of commuting upon the environment and
Nik Philpot
we will ensure that we continue as a business to adopt, where
Chief Executive Officer
possible, the behaviours that make a difference
15 June 2022
32
Corporate Governance | Eckoh Annual Report 2022
33
Corporate Governance
The Board has overall responsibility for establishing and
maintaining sound risk management and internal control
systems, and for the monitoring of these systems to ensure
that they are effective and fit for purpose.
34
Corporate Governance | Board of Directors
35
Board of Directors
Independent Directors
Executive Directors
Christopher Humphrey BA MBA FCIMA
Nik Philpot
Executive Director - Chief Executive Officer
Appointed to the Board
– 2 February 1999
Appointed to Chief Executive Officer
– September 2006
Skills & Experience:
Nik is a founder of Eckoh with over 20
technology sectors Nik's focus on innovation
years' service, and he has over 30 years’
and growth has driven the Company to
experience in the Customer Engagement
become a global leader in Customer
industry Prior to Eckoh he was at British
Engagement Security Solutions and his
Telecom before establishing several
insight and vision is transforming the way
start-up businesses in the telecoms and
customers and brands are protected
Chrissie Herbert
Executive Director – Chief Financial Officer & Company Secretary
Appointed to the Board – 2 May 2017
Skills & Experience:
Chrissie has held several senior finance
she has gained payments experience
positions with both publicly listed
from PayPoint plc, where she was UK &
and privately held businesses Her
Ireland Finance Director. Chrissie qualified
considerable background in high growth,
as a Chartered Accountant with KPMG
consumer facing organisations includes
and is a Fellow of the ICAEW
Collect+ and Travelodge Hotels Ltd and
Non-Executive Chairman
Committee Membership:
Appointed to the Board – 21 June 2017
Nominations (Chair), Audit, Remuneration
Appointed Chairman – 21 September 2017
Skills & Experience:
Christopher is currently Senior Non-
Anite in 2003 as Group Finance Director
Executive Director and Audit Chairman
He has held senior positions in finance at
of both AVEVA Group plc and The Vitec
Conoco, Eurotherm International plc and
Group plc Christopher was formerly Group
Critchley Group plc He was previously a
Chief Executive Officer of Anite plc from
Non-Executive Director at Alterian plc and
2008 until August 2015, having joined
SDL plc
Guy Millward
Non-Executive Director
Committee Membership:
Appointed to the Board – 1 October 2016
Audit (Chair), Nominations, Remuneration
Skills & Experience:
Guy is currently Chief Financial Officer
Group plc, Advanced Computer Software
at Wilmington plc He has extensive
Group plc, Quixant plc, Metapack Limited
experience in senior finance positions
and Bighand Limited, Group Finance
at several publicly and privately held
Director at Alterian plc, Morse plc and
companies in the electronics, software
Kewill plc Guy is a Fellow of the Institute
and IT sectors His previous roles include
of Chartered Accountants in England and
that of CFO at Imagination Technologies
Wales (ICAEW)
David Coghlan
Non-Executive Director
Committee Membership:
Appointed to the Board – 1 December 2017
Remuneration (Chair), Audit, Nominations
Skills & Experience:
David is currently Chairman of Synectics
Director, and Chairman of the Audit
plc, an AIM-quoted provider of high-end
Committee, of SCISYS plc, a software
electronic security systems and Chairman
company quoted on AIM He has extensive
of Quadrant Group Limited, a leading
experience with technology companies in
independent supplier of aviation simulation
the business-to-business field. David was
and training, with subsidiaries in the UK
previously a partner at Bain & Company,
and US Until its takeover in December
a leading strategy consulting firm.
2019, David was also a Non-Executive
36
Corporate Governance | Chairman’s Statement
37
Chairman’s Statement
on Corporate Governance
Dear Shareholder,
As a Board of Directors, we feel the Quoted Companies Alliance Corporate Governance Code
(QCA Code) is the most appropriate code for Eckoh plc to apply, given the Group’s size, risk,
complexity and stage of maturity
The QCA Code follows 10 basic principles that requires companies to provide an explanation
of how they consider that they are meeting those principles through a set of disclosures on
their website and in their Annual Report
As Chairman of Eckoh plc, I am ultimately responsible for the Corporate Governance of the
Group but the Board as a whole considers that good corporate governance is a key driver
in the success of the business and accountability to the Company’s stakeholders, including
Shareholders, customers, suppliers and employees is a vital element in that governance
In this Governance section we outline the Company’s approach to Corporate Governance and how we have complied with the
QCA Code The Board considers that it does not depart from any principles of the QCA code It is the intention that the information
contained within the report will be updated annually alongside the publication of the Group’s Annual Report or more frequently for
any fundamental changes
During the year we have been working on our ESG strategy Our progress to date can be found in the Sustainability Report on pages
28 to 31, this will be further developed in the new year I am also pleased that we have included the key performance indicator Group
Annual Recurring Revenue for the Group in this set of results
Christopher Humphrey
Chairman
15 June 2022
Quoted Companies Alliance Code Compliance
The following paragraphs set out the 10 QCA Code principles and how Eckoh has complied with those principles
Establish a strategy and business model which
Take into account wider stakeholder and
promotes long-term value for Shareholders
social responsibilities and their implications
The strategy and business model which explains the strategic
for long-term success
3.
1.
objectives of the Group and how the Company generates and
Eckoh’s Sustainability Report focuses on our environ-
preserves value over the longer term are set out in the Strategic
mental, social and governance strategy and is found on pages
Report on pages 4 to 31 of this Annual Report
28 to 31
The Board is collectively responsible for the long-term success
In addition to the stakeholders covered in the Sustainability
of the Company and provides effective leadership by setting
Report, our customers are also important stakeholders, whose
the strategic aim of the Company and overseeing the efficient
opinions and voice Eckoh values highly We have various
implementation of these aims in order to achieve a successful
channels for customers and prospects to communicate with the
and sustainable business In practice the Executive Directors
Group, through regular business reviews, which are conducted by
prepare and present the strategic plan to the Board which the
our Client Services team, to post project reviews In the UK there
Board challenges in order to determine the strategic priorities
is an annual Customer Satisfaction survey which we are in the
On an ongoing basis the Board ensures that the strategic plan is
process of rolling out to our US customers
taken into consideration in its decision-making process
2.
and expectations
Seek to understand and meet Shareholders’ needs
opportunities and threats, throughout the organisation
The Board has overall responsibility for establishing and
4.
Embed effective risk management, considering both
The Directors consider that the Annual Report and Financial
maintaining sound risk management and internal control
Statements play an important role in providing Shareholders
systems, and for the monitoring of these systems to ensure
with an evaluation of the Company’s position and prospects The
that they are effective and fit for purpose. The Audit Committee
Board aims to achieve clear reporting of financial performance
provides support to the Board in this regard and overseas the
to all Shareholders The Board acknowledges the importance
monitoring process Further information on the risk management
of an open dialogue with its institutional Shareholders and
and internal control system is set out in the Audit Committee
welcomes correspondence from private investors
report on page 42
The Executive Directors have an ongoing programme of meetings
The Directors have carried out a robust assessment of the
with institutional investors and analysts twice a year for up to
principal risks facing the Group and how these risks could affect
two weeks at a time Feedback from these meetings is reported
the business, financial condition or operations of the Group. The
to the Board The Non-Executive Chairman has held meetings
explanation of these principal risks, including how they are being
during the year with the major Shareholders, independently of
mitigated, can be found on pages 20 to 23
the Executive Directors
In addition to the Annual Report and the Company’s website,
the Annual General Meeting (AGM) is an ideal forum at which
5.
Maintain the Board as a well-functioning, balanced
team led by the Chair
The Board, led by the Chairman, has a collective responsibility
to communicate with investors, and the Board encourages
and legal obligation to promote the interests of the Group The
Shareholder participation All Board members are planning to
Chairman is ultimately responsible for Corporate Governance
be present at the AGM and are available to answer questions
However, the Board is responsible for defining the Corporate
from Shareholders
Governance policies
The articles of association require that at the AGM one third, or as
The Board is made up of three Non-Executive Directors and
near as possible, of the Directors will retire by rotation Nik Philpot
two Executive Directors and has delegated certain roles and
and Guy Millward will retire by rotation and put themselves
responsibilities to its Audit, Nomination and Remuneration
forward for re-election at the AGM
Committees while retaining overall responsibility
38
Corporate Governance | Chairman’s Statement on Corporate Governance
39
Non-Executive Directors are all independent and are expected
corporate calendar There were twelve scheduled meetings
to devote sufficient time to the Company to meet their
during the year and seven meetings at short notice Directors
responsibilities
in principle attend all meetings either in person or by video or
telephone conference arrangements The table below shows
The Board and its Committees met regularly throughout the year
Directors’ attendance of Board and Committee meetings
with the meetings scheduled around key dates in the Company’s
Directors’ meeting attendance 2021/22
Board
Audit
Remuneration
Nomination
Scheduled
Short notice
Scheduled
Short notice
Scheduled
Short notice
Scheduled
Short notice
Executive Directors
Chrissie Herbert
Nik Philpot
Non-Executive Directors
Christopher Humphrey
David Coghlan
Guy Millward
12
12
12
12
12
7
7
7
7
7
31
31
3
3
3
-
-
-
-
-
51
51
5
5
5
3
3
3
3
3
11
11
1
1
1
-
-
-
-
-
1 By invitation. The Executive Directors are not members of any of the Board Committees and they attended only the committee meetings to which they were specifically invited.
At Board meetings the Chairman ensures that effective decisions are reached by facilitating debate and consultations with
management and external advisors as necessary The work undertaken by the Board during the year is set out in the table below:
Divisions of roles and responsibilities
The Chairman is responsible for the leadership of the Board and ensuring the effectiveness on all aspects of its role There is a clear
division of responsibility between the Chairman and the Chief Executive, which is as follows:
Chairman
Chief Executive
Christopher Humphrey is the Non-Executive Chairman
Nik Philpot is the Chief Executive and he is responsible
and he is responsible for managing the Board and
for running the Group’s business by proposing
ensuring it works effectively Below are the roles and
and developing the Group’s strategy and overall
responsibilities of the Chairman for the financial year
commercial objectives, which he does in close
ended 31 March 2022
consultation with the Chairman and the Board
• Setting the Board’s agenda and ensuring the Board
• Providing input to the Board’s agenda and ensuring
receives accurate, timely and clear information on
that reports provided to the Board are accurate,
all matters reserved to its decision and the Group’s
timely and include accurate information
The agenda for each Board meeting includes the following as standing items:
performance and operations
• Risk analysis, including by risk, the risk factor and the
• Finance report, which is prepared and presented
• Ensuring compliance with the Board’s approved
Company Secretary as appropriate, compliance
monitoring mechanism
by the Chief Financial Officer and includes the
management accounts and business performance,
procedures
with the Board’s approved procedures
• Management report which is prepared and presented
including forecast as appropriate
• Chairing the Nomination Committee and facilitating
• Ensuring that the Chairman is alerted to forthcoming
• Ensuring, in consultation with the Chairman and the
by the Chief Executive Officer
Other matters which are covered by the Board routinely during the year include:
the appointment of effective and suitable members
complex, contentious or sensitive issues affecting
and Chairman of Board Committees
the Group of which he might not otherwise be aware
• Ensuring that there is effective communication
• Providing information and advice on succession
• Review of Annual Report and preliminary
• Review and approval of the interim management
by the Group with its Shareholders, including by
planning to the Chairman, the Nomination
announcement
statements for release to the market
the Chief Executive and Chief Financial Officer
Committee, and other members of the Board,
ensuring that members of the Board develop an
particularly in respect of Executive Directors
• Review of Executive Directors' presentation of the full
• Recommendation of the final dividend
understanding of the views of the major investors in
year results to analysts and investors
the Group
• Leading the communication programme with
• Strategy session at which the Board considers
• Promoting the highest standards of integrity, probity
management’s presentation of the Strategic Plan and
• Setting of the Board calendar for the year
and corporate governance throughout the Group
• Promoting and conducting the affairs
• Company secretarial & legal
Shareholders
gives its approval
and particularly at Board level
of the Group with the highest standards
of integrity and corporate governance
40
Corporate Governance | Chairman’s Statement on Corporate Governance
41
6.
9.
Ensure that between them, the Directors have the
Maintain governance structures and processes that
necessary up-to-date experience, skills and capabilities
are fit for purpose and support good decision-making
All members bring different experiences and knowledge to
by the Board
the Board and between them they provide a blend of business
The Board provides the strategic leadership for the Company
understanding, technical knowhow, experience of public
and ensures that the business operates within the Corporate
markets and financial expertise. The Board consider that this is
Governance framework that has been adopted Its prime
appropriate to enable it to successfully execute its long-term
purpose is to ensure the delivery of Shareholder value in the long
strategy
term by setting the business model and defining the strategic
All members of the Board attend seminars and regulatory events
goals to achieve this
to ensure that their knowledge is up-to-date and relevant Where
The Board is supported by a Remuneration Committee, Audit
the Board considers it does not possess the necessary expertise
Committee and Nomination Committee Each Committee has
or experience it will engage the services of professional advisors
formally delegated duties and responsibilities and the terms
The Board considers that the three non-Executive Directors,
of reference for the Committees are reviewed annually The
including the Chairman, are independent
Committee Chair is responsible for reporting, throughout the year,
The biographies of each of the Directors can be found on pages
consideration by the Board The Board reviews annually the list of
to the Board any recommendations or issues which require further
Committees of the Board
Nomination Committee
The Nomination Committee currently comprises David Coghlan,
Guy Millward and Christopher Humphrey, who is the Committee
Chairman It met once during the period and the details of
meeting attendance are set out on page 38
The Committee is responsible for considering and making
recommendations on the appointment of additional Directors,
the retirement of existing Directors and for reviewing the size,
structure and composition of the Board and membership
of Board Committees, which are considered against
objective criteria
Section 172(1) Statement –
For further details of how the Board operates and the way in
which it makes decisions, including key activities during the
financial year ended 31 March 2022 and Board governance, see
pages 36 to 41 and the Board Committee reports thereafter The
Board regularly receives reports from Management on issues
concerning customers, the environment, communities, suppliers,
employees, regulators, governments and investors, which it takes
into account in its decision-making process under section 172
In addition to this, the Board seeks to understand the interests
and views of the Group’s stakeholders by engaging with them
directly as appropriate
The Board regularly receives updates on feedback from investors
from the Executive Management In addition, the Chairman,
CEO and CFO meet frequently with institutional investors to
discuss and provide updates about – and seek feedback on
– the business, strategy, long-term financial performance,
34 and 35
matters that are reserved for the Board
Board engagement with our stakeholders
Directors’ remuneration policy and dividend policy to the
Evaluate Board performance based on clear and
relevant objectives, seeking continuous improvement
During the financial year ended 31 March 2022, the Chairman
7.
The report on the Nomination Committee is set out below and
Company to act in the way he or she considers, in good faith,
Shareholders, the Directors are focussed on growing the US
the reports of the Audit Committee and the Remuneration
would be most likely to promote the success of the Company for
Secure Payments’ business and enhancing our market leader
Committee are set out on page 42 and page 46 respectively
the benefit of its members as a whole. In doing this, section 172
position for contact centre security into the cloud The Group
Section 172 of the Companies Act 2006 requires a Director of a
extent appropriate Considering the capital growth aims of
led a formal review of the Board, its Committees and each
requires a Director to have regard, among other matters, to: the
successfully acquired 100% of the Share Capital of Syntec
Director The performance evaluation of the Chairman was
The role and responsibilities of the Chairman, Chief Executive and
likely consequences of any decision in the long-term; the interests
Holdings Limited in December 2021, which alongside our organic
undertaken by the Chair of the Remuneration Committee,
other Directors have been set out under principle 5 on pages 37
of the Company’s employees; the need to foster the Company’s
growth will further strengthen our market leading position in the
David Coghlan The review centred on the following areas
to 39 of the Annual Report
business relationships with suppliers, customers and others; the
Customer Engagement Security Payments market Going forward
• the Board’s role and scope of its authority, how it is led by
the Chairman, the frequency and time allotted to the Board
meetings and their agendas
10.
Communicate how the Group is governed and
is performing by maintaining a dialogue with
Shareholders and other relevant stakeholders
• the Committees’ terms of reference,
leadership, the
The Company is committed to open communication with
frequency and time allotted to the Committee meetings and
all its Shareholders Communication with Shareholders is
their agendas
predominantly through the Annual Report and AGM The
• the Directors’ feedback was free-ranging and unstructured
last AGM results can be found on the Group’s website Other
with guidance on areas to consider
communications are in the form of full-year and half-year
announcements, periodic market announcements (as
A Board evaluation process will be carried out annually
appropriate) one-to-one meetings and investor roadshows The
Promote a corporate culture that is based on ethical
8.
values and behaviours
Our Sustainability Report on page 28 sets out our ESG strategy,
Remuneration Committee report is included on pages 46 to 52
The Group’s website www.eckoh.com is regularly updated
Annual Reports and Notices of Meetings can be found on the
which includes our approach to governance and the way we do
Group website
business The Social section of our ESG strategy focuses on the
value we place on our employees and the culture we drive in the
UK and US business, with our Humanity value playing a significant
part in the way we operate both internally with our employees
and also with the communities we operate
impact of the Company’s operations on the community and the
we will continue to evaluate acquisition opportunities that can
environment; the desirability of the Company maintaining a
support our growth strategy in Customer Engagement Security
Relationships with customers are fostered and we
listen to feedback through customer surveys. We
also develop the relationships with clients through
cross-selling appropriate additional product and
services, which maximises client value and also
ensures high retention of clients.
Relationships with customers are fostered
and we listen to feedback through
customer surveys We also develop the
relationships with clients through cross-
selling appropriate additional product
and services, which maximises client value
and also ensures high retention of clients
It is the Group’s policy to manage and
operate worldwide business activities
in conformity with applicable laws and
reputation for high standards of business conduct; and the need
regulations as well as with the highest ethical standards Both
to act fairly with members of the Company The Directors give
the Group’s Board of Directors and Executive Management
careful consideration to the factors set out above in discharging
are determined to comply fully with the applicable law and
their duties under section 172 The stakeholders we consider in
regulations, and to maintain the Company’s reputation for
this regard are the people who work for us, buy from us, supply
integrity and fairness in business dealings with third parties
to us, own us, regulate us, and live in the societies we serve and
the planet we all inhabit The Board recognises that building
strong relationships with our stakeholders will help us deliver
our strategy in line with our long-term values and operate the
business in a sustainable way The Board is committed to
effective engagement with all its stakeholders
42
Corporate Governance | Audit Committee Report
43
Audit Committee Report
In the year under review the Audit Committee’s activities were as follows:
Topic
Actions
Dear Shareholder,
On behalf of the Audit Committee, I am pleased to present our report for the year ended 31
March 2022. The Committee has considered the integrity of the Group’s financial reporting
and provided advice to the Board that the 2022 Annual Report and Financial Statements,
taken as a whole, is fair, balanced and understandable, providing Shareholders with the
necessary information to assess the Company’s position, performance, business model
and strategy The activities of the Committee are kept under review in line with regulatory
and market developments
The Audit Committee currently comprises myself, David Coghlan and Christopher Humphrey
The Board considers that I have recent and relevant financial experience in accordance with
the Code Full biographical details of each of the current Committee members, including
relevant financial experience are set out on pages 34 and 35.
The key responsibilities of the Audit Committee are as follows:
• monitoring the financial reporting process, including the integrity of the Financial Statements of
the Company and any formal announcements relating to the Company’s financial performance
including reviewing significant financial reporting judgements contained therein
• reporting to the Board on the appropriateness of the significant accounting policies and practices
of the Group
• risk management and the effectiveness of the Group’s system of internal financial control
• overseeing the external auditors including its scope and cost effectiveness and monitoring and
reviewing the independence of our external auditors and the provision of non-audit services to
the Group
• overseeing the quality of the internal and external audit processes
• monitoring and reviewing the scope and areas internal audit should cover alongside the other
programmes and process reviews the Company has
The Committee has met three times during the year inviting the external auditors, the Chief Financial
Officer and the Chief Executive Officer to each of these meetings. During one of the Audit Committee
Meetings, the auditors were present, without the Chief Financial Officer or the Chief Executive Officer
being present Details of meeting attendance are set out on page 38
Guy Millward
Chairman Audit Committee
15 June 2022
Assessed and reported to the Board on whether the Annual Report and Accounts were fair, balanced
and understandable
Reviewed and discussed with the external auditors the key accounting considerations and
judgements reflected in the Group’s results for the year to 31 March 2022 (as reported below)
Financial reporting
Reviewed, together with the Board, the Risk Assessment and the going concern basis for preparation
of the Financial Statements and recommendation of the going concern statement to the Board
On-going financial monitoring through the COVID-19 pandemic, ensuring financial reporting is
relevant and timely and covering revenue, debtors, cost control and cashflow
Assessed and reported to the Board the change of Accounting Policies required for Syntec Holdings
Limited on acquisition and the impact on financial performance.
Audit plans and audit
Reviewed and agreed the external auditors’ plan in advance of their audit for the year ended 31
March 2022
Discussed the report received from the external auditors regarding their audit in respect of the year
ended 31 March 2022 which included comments on their findings on internal control and a statement
of their independence and objectivity
Risk management and internal
controls
Review of the principal risks and the mitigation of these risks as set out on pages 20 to 23
Review and monitor the effectiveness and robustness of the Company’s internal financial controls
and processes and determine whether an internal audit function is required
Committee governance
Review and update of the Audit Committee terms of reference
The significant issues considered by the Committee in relation to the 2022 Financial Statements, and how these were
addressed, were:
• Risk of fraud in revenue recognition (including contract
• Acquisition accounting
accounting)
As a result of the successful acquisition of Syntec Holdings
Revenue
recognition
is complex,
involves calculation
Limited, acquisition accounting has been included as a
schedules and can be judgemental Controls are in place to
significant issue for the year ended 31 March 2022. Acquisition
ensure revenue is only recognised for product solutions such
accounting involves a significant degree of judgement and
as the hosted Customer Engagement solutions and Secure
estimation when assessing the overall deal consideration
Payment solutions, which are in effect a hosted solution,
and valuing the purchased assets and liabilities and in
when the client accepts the service The provision of the
particular valuing the intangible assets
solution is deemed to be one single performance obligation,
which includes the hardware revenue, the implementation
• Management override of controls
fees and ongoing support and maintenance revenue
We are satisfied adequate controls are in place and use
which are spread evenly over the term of the contract once
the monthly management reporting and the results of the
the solution has been delivered to the client The costs
external audit to assess this on an on-going basis
directly attributable to the delivery of the hardware and the
implementation fees will be capitalised as ‘costs to fulfil a
contract’ and released over the contract term, thereby also
deferring costs to later periods
44
Corporate Governance | Audit Committee Report
45
External audit
Based on the Committee’s assessment, the Committee has
Risk management and internal control
Internal audit
An annual review of the effectiveness of the external audit is
provided the Board with its recommendation to the Shareholders
The review of risks facing the Group is shown on pages 20 to
The Audit Committee annually reviews the requirement for an
undertaken by the Committee
on the re-appointment of PricewaterhouseCoopers LLP
23. The Group has clearly defined lines of accountability and
internal audit function Eckoh Group is subject to a number of
No significant issues were raised with
respect to the audit process for the
financial year ended 31 March 2022
and the quality of the audit process
was assessed to be good.
as external auditors for the year ending 31 March 2023
delegation of authority which are closely adhered to and include
externally audited certifications which were updated this year
PricewaterhouseCoopers LLP will be appointed as auditors to
policies and procedures that cover financial planning and
as well as the external audit of its financial statements; the Audit
the newly acquired Syntec Holdings Limited and its subsidiaries
reporting, accounts preparation, information security, project
Committee has therefore not needed to recommend that the
There are no contractual obligations restricting the Committee’s
governance and operational management The reporting and
Board requires an internal audit function
choice of auditors A resolution for appointment of the auditors
review processes provide regular assurance to the Board as to
will be proposed at the forthcoming Annual General Meeting
the adequacy and effectiveness on internal controls
and is included in the Notice of Meeting which accompanies
Guy Millward
this report
Non-audit services
There are ongoing processes for identifying, evaluating and
Chairman Audit Committee
managing the Company’s significant risks and related internal
15 June 2022
controls that are integrated into the Company’s operations Such
The effectiveness of the audit process is underpinned by the
The Committee reviews the level of non-audit fees for services
processes are reported to, and reviewed by, the Board at each
appropriate audit planning and risk identification at the outset
provided by the auditors in order to satisfy itself that the auditors’
meeting. These processes have identified the risks most important
of the audit cycle The auditors provide a detailed audit plan,
independence is safeguarded There were no non-audit fees
to the Company (business, operational, financial, security and
which includes the level of materiality and its assessment of
paid to PricewaterhouseCoopers LLP in the year ended 31 March
compliance), determined the financial implications, and assessed
the risks and other key matters for review For the year ended
2022
the adequacy and effectiveness of their control The reporting and
31 March 2022, the primary risks identified were: risk of fraud in
In determining the most appropriate provider of non-audit
review process provide routine assurance to the Board as to the
revenue recognition (including contract accounting), acquisition
services, the Committee will consider the knowledge and
adequacy and effectiveness of the internal controls
accounting risk and management override of controls The
expertise of the potential providers and the proposed costs
Committee reviews and challenges the work undertaken by the
Non-audit services will only be undertaken by the auditors where
auditors to test management’s assumptions on these matters
it is deemed to be the preferred provider and the provision of
An assessment of the effectiveness of the audit process in
services poses no threat to its independence
addressing these items is performed through the reporting
received from the auditors at the year end The Committee seeks
Details of the remuneration paid to the auditors for the statutory
feedback from management on the effectiveness of the audit
audit are set out in note 7
process. No significant issues were raised with respect to the
audit process for the financial year ended 31 March 2022 and the
quality of the audit process was assessed to be good
46
Corporate Governance | Remuneration Committee Report
47
Remuneration
Committee Report
Dear Shareholder,
On behalf of the Remuneration Committee, I am pleased to present our Remuneration
Report for the financial year ended 31 March 2022, which has been approved by the Board.
This report is divided into two sections:
• The annual statement setting out the work of the Remuneration Committee
in
the
financial year ended 31 March 2022: and
• The Remuneration Report, which sets out the Company’s Remuneration Policy for
Executive Directors and the Annual Remuneration Report detailing remuneration paid to
Directors in the year ended 31 March 2022
The membership and responsibilities of the Remuneration Committee are set out on page
48 of this report Amongst its objectives, the Committee strives to ensure the Executive
Directors’ remuneration is aligned with the interests of Shareholders The Remuneration
Committee believes that Shareholders’ interests are best served by linking a significant proportion of total potential remuneration
to long-term performance
The intention of the Remuneration Committee is to structure
• The Remuneration Committee has also reviewed the
the short and long-term incentives to reward executives for
Remuneration Policy for senior management and key
enhancing Shareholder value and ensuring that substantial
employees, given the current and on-going difficult
rewards will be received only if substantial value has been
employment market in the technology sector As a result, PSP
created for our Shareholders However, given the impact of
Share Option awards were made to key individuals in March
unforeseen global events the indications show the Initial Awards
2022, in addition to the normal three-year cycle of Share
made to the Executive Directors five years ago are unlikely to
Options awarded in July 2022 The awards in March 2022 also
vest in 2022 In order to retain and incentivise the CEO and CFO
included awards granted to employees acquired through the
a review of the Executive Directors’ remuneration arrangements
Syntec acquisition
was undertaken during the year
In respect of the year under review the Remuneration
Officer’s and Chief Financial Officer’s salaries with effect from
Committee’s activities were as follows:
1st April 2022 of 4%, reflecting pay increases within the Group’s
• The Committee approved an increase in the Chief Executive
workforce and current market conditions
• The Remuneration Committee sought advice from FIT
Remuneration Consultants LLP given indications showed the
• The Base and Committee Chair fee of the Chairman and Non-
Initial Awards granted to the Executive Directors are unlikely to
Executive Directors have also been increased by 4% from 1st
vest in 2022 As part of the review the Remuneration Committee
April 2022
took into consideration the following objectives:
– Respecting the Company’s existing Shareholder
senior management for the financial year ended 31 March
• Bonus payments were accrued for the Executive Directors and
authorities
2022 Those relating to the Executive Directors are set out on
pages 49 and 50 Bonus payments for staff members were
– Honouring the terms of the existing 2017 Initial Awards as
accrued at an average of 5% of salary (FY21: discretionary
present to Shareholders
payments only)
– Retaining the Executives and incentivising them to deliver
• During the year under review, there has been significant
Eckoh’s growth strategy, especially given the acquisition of
change in the management structure of the US business
Syntec
following the ceasing of the third-party Support business
The Committee continues to assess the succession plans for
• While the proposals put forward by the Remuneration
senior management reporting to the Executive Directors This
Committee were permitted under the Company’s existing
will be continued into the new financial year and take into
Shareholder approved long-term incentive plan, the
consideration the integration of the Syntec team following the
Remuneration Committee consulted with major Shareholders
acquisition of Syntec Holdings Limited
in respect of the long-term incentive provision for the CEO
and CFO going forward The proposal was implemented
The Remuneration Report in respect of the financial year ended
as follows:
31 March 2022, which includes the Remuneration Policy as set out
below, will be put to the Company’s Shareholders for an advisory
– In January 2022 the Committee granted nominal cost PSP
vote at the AGM to be held on 26 September 2022 I encourage all
awards to the CEO and CFO equal to 200% of their respective
Shareholders to vote in favour of this resolution and I look forward
salaries (in line with the exceptional grant limit) (the FY22
to the opportunity to meet with Shareholders at the AGM
Awards) In the unlikely event that a portion of the 2017
Initial Awards were to vest, any value the Executive Directors
receive would be offset pound for pound against any vesting
David Coghlan
of the new FY22 Awards to ensure management wouldn’t be
Chairman Remuneration Committee
rewarded twice
15 June 2022
– In addition, a further award of shares up to 200% of salary
will be granted to the CEO and CFO in July 2022, in respect
of FY23 (the FY23 Awards)
– From FY24 on, further annual awards will be considered per
the scheme rules up to the normal 120% of salary award level
Further details of the award targets are on page 50
48
Corporate Governance | Remuneration Committee Report
Remuneration Policy Report
49
The following is a summary of the Policy that covers remuneration for Executive Directors of the Company.
Purpose and link to strategy
Operation
Performance measures
Base salary is set at a level
to secure the service of
talented Executive Directors
with the ability to develop
and deliver a growth
strategy.
Fixed contractual cash amount usually paid monthly in
arrears
Not applicable
Reviewed annually, with any increases taking effect from
1 April each year
This review is dependent on continued satisfactory
performance in the role of an Executive Director It also
includes a number of other factors, including experience,
development and delivery of Group strategy and Group
profitability, as well as external market conditions and
pay awards across the Company
To provide Executive
Directors with ancillary
benefits to assist them in
carrying out their duties
effectively.
Executive Directors are entitled to a range of benefits
including car allowance, private health insurance and
life assurance
Executive Directors are entitled to participate on
the same terms as all UK employees in the UK Share
Incentive Plan, the maximum contribution being
£1,800 pa
Not applicable
To provide a material
incentive to drive Executive
Directors to deliver
stretching strategic and
financial performance
and to grow long-term
sustainable Shareholder
value.
Paid annually and based on performance in the relevant
financial year.
Measurement criteria and targets for the annual
bonus are set annually by the Committee
Award levels for Executive Directors are up to 50% of the
Executive’s base salary The performance measures
are reviewed annually and the Committee ensures
that performance measures remain aligned to the
Company’s business objectives and strategic priorities
for the year
Currently, up to 60% of the annual bonus is based
on the achievement of annual targets set against
the Group’s adjusted earnings before interest, tax,
depreciation and amortisation The remainder is
based on the new business target in the year and the
achievement of annual personal objectives
To provide a long-term
performance and retention
incentive for the Executive
Directors involving the
Company’s shares. To
link long-term rewards to
the creation of long-term
sustainable Shareholder
value by way of delivering on
the Group’s agreed strategic
objectives.
Under the PSP, the Initial Awards were made over
a fixed number of shares, which will vest based on
the achievement of performance conditions over a
performance period of approximately 5 years from the
2017 AGM, ending 30 days after the announcement of the
2022 Full Year Financial Results
FY22 Award granted to Executive Directors, awards equal
to 200% of the CEO’s and CFO’s respective salaries
FY23 Awards are expected to be granted over shares up
to 200% of the CEO’s and CFO’s respective salaries
The FY22 and FY23 Awards will vest three years from the
respective grant dates, subject to continued service and
certain performance targets
From FY24 on, further annual awards will be considered
per the scheme Rules at up to the normal 120% of salary
award level
The Committee reserves the right to vary the
measurement criteria and targets annually to ensure
the annual bonus remains appropriate and challenging
Targets are measured over a one-year period
Payments range between 0% and 50% of base salary
for threshold and maximum performance
Initial Awards
• 25% vesting for compound growth in Total
Shareholder Return (“TSR”) of 10% pa
• 100% vesting for compound growth in TSR of 25% pa
or greater
Straight line vesting for intermediate performance
between threshold and maximum performance
Below threshold none of the award will vest
FY22 Awards:
50% based on three-year TSR Return targets
• 25% vesting for compound growth in TSR of 7 5% pa
• 100% vesting for compound growth in TSR of 15% pa
or greater
Straight line vesting for intermediate performance
between threshold and maximum performance
50% based on three-year adjusted Earnings Per Share
(EPS) growth targets
• 25% vesting for compound growth in EPS of 7 5% pa
• 100% vesting for compound growth in EPS of 15% pa
or greater
Straight line vesting for intermediate performance
between threshold and maximum performance
To provide a benefit
comparable with market
rates, helping with the
recruitment and retention of
talented Executive Directors
able to deliver a long-term
growth strategy.
Usually paid monthly in arrears
Not applicable
Executive Directors receive a contribution of 10% of base
salary into the Company’s Defined Contribution Plan,
a personal pension arrangement and/or a payment
as a cash allowance
l
y
r
a
a
S
e
s
a
B
s
t
fi
e
n
e
B
s
u
n
o
B
l
a
u
n
n
A
l
)
”
P
S
P
“
(
n
a
P
e
r
a
h
S
e
c
n
a
m
r
o
f
r
e
P
n
o
i
t
u
b
i
r
t
n
o
c
n
o
i
s
n
e
P
Annual Report on
Remuneration
The following section provides details of how Eckoh’s
Chief Executive Officer and the Chief Financial Officer were not
Remuneration Policy was implemented during the financial year
present for any discussions that related directly to their own
ended 31 March 2022 The following pages contain information
remuneration
that is required to be audited in compliance with the Directors’
Remuneration requirements of the Companies Act 2006 All
In undertaking its responsibilities, the Committee seeks
narrative and quantitative tables are unaudited unless otherwise
independent external advice as necessary To this end, for the
stated
year under review the Committee has received advice from FIT
Remuneration Consultants LLP
Remuneration Committee membership in 2021/22
The Remuneration Committee currently comprises myself,
Summary of Shareholder voting at the 2021 AGM
Christopher Humphrey and Guy Millward The Committee
The following table shows the results of the Shareholder advisory
members are all independent Directors and are responsible for
vote on Annual Remuneration Report:
developing policy on remuneration for the Executive Directors
The Remuneration Committee is formally constituted with written
Total number of
votes
% of votes
cast
terms of reference which set out the full remit of the Committee
For (including discretionary)
145,710,144
99 98%
The Remuneration Committee met three times during the year
The details of meeting attendance are set out on page 38
During the year, the Committee sought internal support from
the Chief Executive Officer and Chief Financial Officer, who
attended Committee meetings by invitation from the Chairman,
to advise on specific questions raised by the Committee. The
Against
30,229
0 02%
Total votes cast
(excluding withheld votes)
Total votes withheld
Total votes cast
(including withheld votes)
145,740,373
11,186
145,751,559
Directors’ single figure of total remuneration (audited)
The following table sets out the single figure of total remuneration for Directors for the financial year ended 31 March 2022 and 2021:
Base salary/fees
Benefits1
Pension
Annual bonus
Total
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Executive Directors
Chrissie Herbert
Nik Philpot2
Non-Executive Directors
David Coghlan
Christopher Humphrey
Guy Millward
Total
189
326
37
64
37
187
322
36
63
36
653
644
14
17
-
-
-
31
13
16
-
-
-
29
19
-
-
-
-
19
18
-
-
-
-
18
55
48
-
-
-
103
-
-
-
-
-
-
277
391
37
64
37
806
218
338
36
63
36
691
1 Benefits includes car allowance, healthcare cover & death in service.
2 N Philpot has elected to have all his Company pension contribution added to his salary The pension contribution has been reduced by the employer’s national insurance that is payable by the
Company for the amount added to his base salary
50
Corporate Governance | Remuneration Committee Report
51
Incentive outcomes for the year ended
Scheme interests awarded in the year
31 March 2022
ended 31 March 2022
Annual bonus in respect of 2021/22 performance
Performance Share Plan (“PSP”) (audited)
Payments to past Directors (audited)
Directors’ shareholdings (audited)
The annual bonus for the Executive Directors and Senior
The table below provides details of the Initial Awards made under
In the financial year ended 31 March 2022 and 2021, there were
The shareholdings of the Directors and their connected persons
Management for the year ended 31 March 2022 was based on
the PSP on 23 November 2017 to Nik Philpot and Chrissie Herbert
no payments made to past Directors
in the Ordinary Shares of the Company against their respective
the achievement of Adjusted Operating Profit before interest,
and the FY22 Awards Performance for these awards is measured
shareholding requirement as at 31 March 2022
tax, depreciation and amortisation (AOP), new business targets
over approximately five years from the 2017 AGM and will end 30
Chairman and Non-Executive Director fees
and personal objectives Bonus payments were accrued for
days after the announcement of the 2022 Full Year Financial Results
The Chairman and Non-Executive Directors were paid the
the Executive Directors at 16% of their base salary (FY21: nil%),
following fees in the financial year ending 31 March 2022:
compared to a maximum potential of 50%. The profit related
In the ten-year period from the 2017 AGM, the Company may not issue
element of the bonus was based on a sliding scale formula
under the PSP and any other employees’ Share plan adopted by the
for achieving AOP in excess of a threshold established at the
Company, interests in shares comprising in aggregate more than 10%
beginning of the year New business threshold targets were not
of the issued Ordinary Share Capital of the Company
met, so no bonus was accrued in that respect Because of a
cap on total bonuses paid across the Company, the personal
Except for the Initial Awards, awards will normally vest on the later
objectives element of the Executive Directors’ bonus was
of the expiry of the third anniversary of the date of grant of the
subsumed within the profit-based element and no additional
award and the date that the Committee determines the extent
personal objectives bonus will be paid In addition, the CFO
to which the applicable performance criteria have been satisfied
Role
Chairman
Non-Executive Director
Chairman of a Committee
2022 Annual fee £k
Nik Philpot1
7,051,285
7,001,285
64
32
5
Chrissie Herbert
35,000
35,000
Christopher Humphrey
525,000
525,000
David Coghlan
200,000
-
31 March 2022
Ordinary Shares
of 0.25 pence
each
31 March 2021
Ordinary Shares
of 0.25 pence
each
received a one-off bonus of £25,000 for the additional and
and provided in normal circumstances that the participant is still
Fees
for
the Chairman, Non-Executive Directors and
1 Nik Philpot’s spouse is the beneficial owner of 80,000 shares included above.
intensive work during and immediately following the acquisition
a Director or employee of the Company’s Group
of Syntec Bonus payments for staff members were accrued
Committee Chairmen are reviewed annually Both the fees for
the Chairman and Non-Executive Directors base salaries and
at an average of 5% of salary (FY21: small level of discretionary
During the financial year ended 31 March 2022, awards were made
the Committee Chairman fee for the Audit Committee and
bonuses paid to staff)
to Senior Management and key individuals of Eckoh UK, Eckoh US
Remuneration Committee were increased by 4% from 1 April
and Syntec Details of awards can be found in note 23
2022 (FY21: 2% from 1 January 21)
During the year, 100% of the 2018 Awards to Senior Management
vested The performance target for the awards was 10% pa total
Shareholder return, for the July 2018 awards the performance
was 20 95% and for the September 2018 awards the performance
was 19 57%
Executive Director
Face
value
(% of salary)
Number
of shares
awarded
Face
value3
£
Potential award
for minimum
performance
Performance measures
Nik Philpot
140%
3,750,0001
1,921,875
Chrissie Herbert
112%
2,250,0001
1,153,125
25% of face value
Nik Philpot
73%
1,190,4432
601,174
Chrissie Herbert
73%
749,9852
378,742
25% of face value
• 25% vesting for compound growth in TSR of 10% pa
• 100% vesting for compound growth in TSR of 25% pa
Straight line vesting for intermediate performance
between threshold and maximum performance
50% based on three-year TSR Return targets
• 25% vesting for compound growth in TSR of 7 5% pa
• 100% vesting for compound growth in TSR of 15% pa
or greater
50% based on three-year adjusted Earnings Per
Share (EPS) growth targets
• 25% vesting for compound growth in EPS of 7 5% pa
• 100% vesting for compound growth in EPS of 15% pa
or greater
Straight line vesting for intermediate performance
between threshold and maximum performance
1
Initial Awards made under the PSP on 23 November 2017
2 FY22 Awards made under the PSP on 17 January 2022
3 Face value has been calculated using the Company’s closing share price on the date of the Initial Award of £0 5125 and for the FY22 Award the 3-day average immediately prior to the
award of £0 505
Directors’ interests in shares in Eckoh’s long-term incentive plans and all-employee plans
Directors’ share options (audited)
The Directors’ interests in share options are shown in the following table:
Note
At 1 April
2021
(number)
Granted
in year
(number)
Forfeited
in year
(number)
Exercised
in year
(number)
At 31 March
2022
(number)
Exercise
price
(pence)
Nik Philpot
Nik Philpot
Chrissie Herbert
Chrissie Herbert
Chrissie Herbert
1
1
2
1
1
3,750,000
-
-
1,190,443
500,000
2,250,000
-
-
-
749,985
-
-
-
-
-
-
-
-
-
-
1 Granted under the 2017 Eckoh plc Performance Share Plan (“PSP”), as approved at the 2017 AGM
2 Granted under the 2016 LTIP (see below)
Earliest
date for
exercise
15 07 22
17 01 25
Latest
date for
exercise
22 11 27
17 01 32
3,750,000
1,190,443
0 00
0 00
500,000
47 50
21 06 20
21 06 27
2,250,000
749,985
0 00
0 00
15 07 22
17 01 25
22 11 27
17 01 32
52
Corporate Governance | Remuneration Committee Report
53
Long-Term Incentive arrangements for Directors
In addition to the PSP described above, the Company operates
March 2017 to a total of 34 Senior Management employees The
an additional long-term share incentive scheme for Directors
Chief Executive Officer was not awarded any share options in the
and Senior Managers (“the 2016 LTIP”) The 2016 LTIP was
years ended 31 March 2016 and 31 March 2017
implemented following prior discussions with major Shareholders
Directors’ Report
of the Company Under this scheme, the Company may issue a
Share options of 500,000 were awarded under the 2016 LTIP to
The Directors present the Directors’ Report, together with the audited Financial
maximum of 2% of the share capital each year for the three years
Chrissie Herbert, Chief Financial Officer following her appointment
Statements for the year ended 31 March 2022
Principal activities, results and likely future developments
The principal activities of the Group are:
• Secure Payment products, which help organisations reduce the risk of fraud; secure
sensitive data, comply with the Payment Card Industry Data Security Standard (“PCI DSS”)
and wider security regulations such as the General Data Protection Regulation (“GDPR”)
• Customer Engagement Solutions, which help organisations transform the way they engage
with their customers
The overlap between the two areas has always been significant and has led us to update and
unify our proposition into a new go-to-market vision of Customer Engagement Security Solutions Going forward all of our customer
engagement offerings will be underpinned with security features and capabilities to assist our clients to address security concerns
and increasing regulation, but to do so in a way that doesn’t compromise the quality of their customers’ experience In addition, our
solutions, which will enable our clients to ‘Engage, Secure and Protect’ their customers, will all be delivered through our multi-vendor
and global cloud platforms Further comments on the development of the business are included in the Chairman’s Statement, Chief
Executive’s Report and Financial Review on pages 4 to 27
The profits for the year after taxation amounted to £1.6 million (2021: £2.8 million).
ending 31 March 2019 to the Senior Managers of the business
on 2 May 2017 These are disclosed in the above and below tables
All options granted under this scheme carry an exercise price
Total grants under the 2016 LTIP have been as follows:
equal to the market price at the date of grant and are subject to
vesting based on achievement of performance criteria Grants
of options under this arrangement were made in March 2016 and
Number of Senior
Management
Granted in year
(number)
Exercise price
(pence)
Earliest date for
exercise
Latest date for
exercise
23 March 2016
2 May 2016
13 October 2016
31 March 2017
21 June 2017
28
1
2
21
1
4,100,000
500,000
500,000
4,000,000
500,000
43 5
43 5
38 875
39 5
47 5
23 03 19
02 05 19
13 10 19
31 03 20
21 06 20
23 03 26
02 05 26
13 10 26
31 03 27
21 06 27
The Company does not intend to grant any further awards under the 2016 LTIP
Share Incentive Plan (audited)
The Group operates a Share Incentive Plan (SIP) in the UK The scheme and plan are open to all UK employees, including the Executive
Directors As at 31 March 2021 and 2022, Chrissie Herbert participates in the UK scheme and the details are shown below:
Number of
Partnership
Shares
purchased
at 31 March
2021
Number of
Matching
Shares
purchased
at 31 March
2021
Dividend
Shares1
acquired
at 31 March
2021
Total
Shares at
31 March
2021
Number of
Partnership
Shares2
purchased
during
the year
Matching
Shares3
awarded
during
the year
Dividend
Shares
acquired
during
the year
Dates of
release of
Matching
Shares4
Total
Shares at
31 March
2022
Chrissie Herbert
14,262
28,524
831
43,617
3,030
6,060
540
Dec 21
53,247
1 Dividend Shares are Ordinary Shares of the Company purchased with the value of dividends paid in respect of all other shares held in the plan
2 Partnership Shares are Ordinary Shares of the Company purchased, every six months by the Company with the monthly contributions made by the employee, during the period (at prices
from £0 56 to £0 61)
3 Matching Shares are Ordinary Shares of the Company awarded conditionally in line with the purchase of the matching shares every six months, during the period
4 The dates used are based on the earliest allocation of the Matching Shares Matching Shares will be released as each six-month Partnership Agreement matures, 3 5 years after
commencing
Executive Directors’ service contracts
External advisors
Nik Philpot has a service contract that is terminable on twelve
The Committee receives independent advice from FIT
months’ notice by either party while Chrissie Herbert has a service
Remuneration Consultants LLP as the Committee’s appointed
contract that is terminable on nine months’ notice by either party
remuneration advisor during the financial year ended 31 March
2022 During the year the level of fees paid to remuneration
Chairman and Non-Executive Directors
advisors totalled £11k (2021: £nil)
The Chairman and Non-Executive Directors do not have service
contracts but serve under letters of appointment terminable by
David Coghlan
six months’ notice on either side
Chairman Remuneration Committee
15 June 2022
54
Corporate Governance | Directors Report
55
Statutory information
Financial instruments
Subsequent events
Under company law, Directors must not approve the Financial
Eckoh plc (The Company) is a Public Limited Company
The financial risk management objectives and policies of the
There were no events after the balance sheet date
Statements unless they are satisfied that they give a true and
incorporated in the United Kingdom (Registration number
Group and the exposure of the Group to foreign currency risk,
fair view of the state of affairs of the Group and Company and
03435822) The Company’s Ordinary Shares are traded on the
interest rate risk, and liquidity risk are outlined in note 3 to the
Disclosure of information to the auditors
of the profit or loss of the Group for that period. In preparing the
Alternative Investment Market of the London Stock Exchange (AIM)
Consolidated Financial Statements
The Directors who held office at the date of approval of this
Financial Statements, the Directors are required to:
Directors’ Report confirm that, so far as they are each aware, there
The Company has a trading subsidiary, located in the USA, whose
Political contributions
is no relevant audit information of which the Company’s auditors
• select suitable accounting policies and then apply them
operations and results are included in the Financial Statements
Neither the Company nor any of its subsidiaries made any
are unaware; and each Director has taken all the steps that they
consistently;
of the Company The subsidiary undertakings are listed in note 16
political donations or incurred any political expenditure during
ought to have taken as a Director to make themselves aware of
Share capital
The Company has only Ordinary Shares of 0 25 pence nominal
Going concern
the year (2021: nil)
any relevant audit information and to establish that the Company’s
• state whether applicable UK adopted international
auditors are aware of that information
accounting standards in conformity with the requirements
of the Companies Act 2006 have been followed for the Group
Financial Statements and United Kingdom Accounting
value in issue along with 1,851,056 of shares held in treasury
In determining the appropriate basis of preparation of the
Dividends
Note 21 to the Consolidated Financial Statements summarises
Financial Statements, the Directors are required to consider
No interim dividend was paid during the year (2021: nil)
Standards, comprising FRS 101, have been followed for the
the rights of the Ordinary Shares as well as the number issued
whether the Group and Company can continue in operational
Company Financial Statements, subject to any material
during the year ended 31 March 2022
existence for the foreseeable future
The Directors recommend the payment of a final dividend
departures disclosed and explained in the Financial
of 0 67p (2021: 0 61p) per Ordinary Share amounting to £2 0
Statements;
Substantial shareholdings
The Board has carried out a going concern review and concluded
million (2021: £1 6 million) to be paid on 21 October 2022 This
As at 31 March 2022, the Company had been advised under the
that the Group and Company have adequate cash to continue
recommendation will be put to the Shareholders at the Annual
• make judgements and accounting estimates that are
Disclosure Guidance and Transparency Rules, or had ascertained
in operational existence for the foreseeable future
General Meeting
reasonable and prudent; and
from its own analysis, that the following held more than 3% of the
issued capital:
The Directors have prepared cash flow forecasts for a period in
Independent Auditors
• prepare the Financial Statements on the going concern basis
Name of holder
No. of Ordinary
Shares/ voting
rights
% of issued
capital/ voting
rights
Canaccord Genuity Wealth Mgt
48,554,136
Liontrust Asset Mgt
Chelverton Asset Mgt
Herald Investment Mgt
39,457,720
18,250,000
16,048,723
Blackrock Investment Mgt
14,060,033
16 61
13 50
6 24
5 49
4 81
excess of 12 months from the date of approving the Financial
The independent auditors, PricewaterhouseCoopers LLP, have
unless it is inappropriate to presume that the Group and
Statements As at 31 March 2022, the £10 million of funding
expressed their willingness to continue as the Company’s
Company will continue in business
(£5 million RCF and £5 million overdraft) from Barclays Bank
auditors As outlined in the Audit Committee report on page 42,
is undrawn Bank covenants have been reviewed and are
resolutions proposing their appointment and to authorise their
The Directors are responsible for safeguarding the assets of the
comfortably achieved for the year to 31 March 2022
remuneration will be proposed at the 2022 AGM
Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities
Our US operation is underpinned completely by fixed contractual
Statement of Directors’ responsibilities
fees In the UK, clients have a variety of commercial models
The Directors are responsible for preparing the Annual Report
The Directors are also responsible for keeping adequate
including fixed fees and transactional arrangements, with
and the Financial Statements in accordance with applicable
accounting records that are sufficient to show and explain
varying levels of commitment
law and regulation
the Group’s and Company's transactions and disclose with
reasonable accuracy at any time the financial position of the
In addition to our key business indicators, total orders and new
Company law requires the Directors to prepare Financial
Group and Company and enable them to ensure that the
Annual General Meeting (AGM)
business orders, we have also introduced Annual Recurring
Revenue (ARR1) to measure the health of the business, which
Statements for each financial year. Under that law the Directors
Financial Statements comply with the Companies Act 2006
have prepared the Group Financial Statements in accordance
The 2022 AGM will be held at 10:00 on 26 September 2022
includes all clients that we are billing In the US, we continue to
with UK-adopted international accounting standards and
The Directors are responsible for the maintenance and integrity
see the majority of the Secure Payments contracts won and
the company financial statements in accordance with United
of the Company’s website Legislation in the United Kingdom
The notice of the AGM and an explanation of the resolutions
delivered through Eckoh’s cloud platforms, as large enterprises
Kingdom Generally Accepted Accounting Practice (United
governing the preparation and dissemination of Financial
to be put to the meeting are set out in the Notice of Meeting
have accelerated their move into the cloud Following the
Kingdom Accounting Standards, comprising FRS 101 “Reduced
Statements may differ from legislation in other jurisdictions
accompanying this Annual Report The Board fully supports
pandemic we do not anticipate this trend to reverse and whilst
Disclosure Framework”, and applicable law)
all the resolutions and encourages Shareholders to vote in
this reduces the upfront payments (and cash received) for
favour of each of them as they intend to in respect of their own
implementations, it increases the proportion of recurring revenue
shareholdings
and improves the operational gearing, earnings quality and
visibility in the business We anticipate the renewal rate for the
Directors’ and Officers’ liability insurance and
UK and US businesses to remain unchanged during this period
indemnification of Directors
When preparing the cash flow forecasts the Directors have
The Group has purchased and maintained throughout the year
reviewed a number of scenarios, including a severe but plausible
Directors’ and Officers’ liability insurance in respect of itself and
downside scenario which assumes no new business, with respect
its Directors and these remain in force at the date of this report
to levels of new business In all scenarios the Directors were able
to conclude that the Group has adequate cash to continue in
operational existence for the foreseeable future
By order of the Board
Chrissie Herbert
Company Secretary
15 June 2022
56
Corporate Governance | Independent auditors report
57
Independent auditors’ report to the
members of Eckoh plc
Report on the audit of the financial statements
Opinion
In our opinion:
•
•
•
•
Eckoh plc’s group financial statements and company financial statements (the “financial statements”) give a true and fair
view of the state of the group’s and of the company’s affairs as at 31 March 2022 and of the group’s profit and the group’s
cash flows for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards;
the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework”, and
applicable law); and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Financial Statements 2022 (the “Annual
Report”), which comprise: the Consolidated statement of financial position and Company statement of financial position as at 31
March 2022; the Consolidated statement of total comprehensive income, the Consolidated statement of changes in equity and
the Company statement of changes in equity and the Consolidated statement of cash flows for the year then ended; and the notes
to the financial statements, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Audit scope
• We conducted full scope audit work over the operations of Eckoh UK and Eckoh US due to their financial significance to the
group. With respect to Syntec, we performed audit procedures over certain financial statement line items where Syntec’s
contribution to the group was 5% or more. In addition, we performed full scope audits of Eckoh plc (“the Company”). The
audit procedures performed accounted for 100% of both the Group’s revenue and profit for 2022 and 98% of net assets as
at 31 March 2022.
Key audit matters
• Revenue recognition (group)
•
• Recoverability of investment in, and the loan to, subsidiary (parent)
Accounting for the acquisition of Syntec (group)
Materiality
• Overall group materiality: £317,800 (2021: £305,000) based on 1% of total revenue.
• Overall company materiality: £610,000 (2021: £322,600) based on 1% of total assets capped for the purpose of the group
audit.
Performance materiality: £238,300 (2021: £228,700) (group) and £457,000 (2021: £241,900) (company).
•
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on
the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Accounting for the acquisition of Syntec and Recoverability of investment in, and the loan to, subsidiary undertakings are new key
audit matters this year. Impact of Covid-19, which was a key audit matter last year, is no longer included because of the ability of
the Group to continue to generate profits and operate normally despite disruption related to the Covid-19 pandemic. Otherwise,
the key audit matters below are consistent with last year.
Key audit matter
Revenue recognition (group)
How our audit addressed the key audit matter
Our procedures included the following:
Revenue in the year ended 31 March 2022 was £31,780k
• For a sample of customer contracts, determined whether
(FY21:£30,486k) as set out in the consolidated statement of
the correct judgement was exercised in recognising revenue
comprehensive income. The approach to revenue recognition
according to the five-step revenue recognition approach set out
as set out under IFRS 15 is complex and can be judgemental
by IFRS 15.
especially where contracts with customers have variable
• Recalculating revenue recognition schedules to confirm the
considerations. Due to its expected impact on the Group, we deem
accuracy of these schedules.
the contract revenue recognition as a key audit matter.
• For a sample of customer contracts with deferred revenue and
costs at the year-end, we assessed management’s judgements
used in estimating the amounts deferred.
• Performing testing on unusual revenue journal entries.
Based on the procedures performed, we noted no material
uncorrected issues.
(Table continued overleaf)
58
Corporate Governance | Independent auditors report
59
Key audit matter
How our audit addressed the key audit matter
Accounting for the acquisition of Syntec (group)
Our procedures included the following:
As set out in Note 27, the Group acquired 100% of shares in Syntec
• Assessing the business processes and controls related to the
Holdings Limited on 22 December 2021 for a purchase price of
purchase price allocation.
£30,997k.The allocation of this purchase price to the acquired
• Reviewing the purchase agreement with a focus on unusual
assets and liabilities is considered to be a key audit matter as
terms and conditions and more complex forms of consideration.
the identification of the acquired assets and liabilities, and their
• Comparing the identified assets and liabilities with other sources
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures
and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as
a whole.
subsequent valuation, recognition and measurement, is based to a
of information, such as Board presentations, that might suggest
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
large extent on estimates and assumptions involving a high degree
omitted items.
of judgement.
• Obtaining the report prepared by management’s expert used
to value certain of the acquired assets and utilising our own
specialists to assess the valuation techniques, assumptions and
source data, used to determine these fair values.
• Evaluating the allocation of the purchase price to the relative fair
values of the assets and liabilities acquired.
Overall materiality
£317,800 (2021: £305,000)
£286,000 (2021: £322,600)
Financial statements – group
Financial statements – company
How we determined it
1% of total revenue.
1% of total assets capped at for the purpose of
the group audit.
Based on the procedures performed, we noted no material issues
Rationale for benchmark
We have applied this benchmark as a generally
We believe that total assets is the primary
from our work.
applied
accepted auditing practice for Group’s at the growth
measure used by the shareholders in assessing
stage and based on what management deems to be
the performance of the company, and is a
a key performance indicator.
generally accepted benchmark. The value is
capped for the purpose of the group audit.
Recoverability of investment in, and the loan to, subsidiary (parent)
Our procedures included the following:
As disclosed in Note 15, the company held an investment in
• Evaluating management’s assessment of whether any indicators
subsidiary undertakings and other investments of £51,625k (2021:
of impairment existed.
£20,153k) as disclosed in Note 15 and had amounts receivable
• Assessing the recoverable value by reference to the net assets
from subsidiary undertakings of £4,034k (2021: £3,506k) as
of the underlying subsidiaries and amounts owed by group
disclosed in Note 18. The assessment of the recoverability of
undertakings with reference to the Director’s intentions for the
these assets required the application of management judgement,
settlement of group-wide intercompany balances.
particularly in determining whether any impairment indicators have
• Verifying that the recoverable values of the investment was
arisen that trigger the need for a formal impairment assessment
consistent with the recoverable value of the CGU tested for
and in assessing whether the carrying value of each investment
goodwill impairment purposes, leveraging the audit work
and amounts owed by group undertakings are recoverable. As
undertaken as part of the group audit.
changes to these judgements and estimates could have a material
• Verifying that Eckoh Plc’s market capitalisation is higher than the
impact on the company financial statements, we consider this to
total of the company’s non-current and current assets.
be a key audit matter.
Based on the procedures performed, we noted no material issues
from our work.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and controls,
and the industry in which they operate.
Eckoh plc has both its corporate and operating headquarters in the United Kingdom. The audit engagement team is aligned to
Eckoh plc’s geographical organisation and largely reflects the management structure. As Eckoh plc’s corporate headquarters are
based in the UK, the Group audit engagement team is also based in the UK with no support required from any auditors from other
territories. The largest trading entity is Eckoh UK. This entity, along with Eckoh US and the Company were the only components
requiring an audit of its complete financial information for the purposes of the consolidated Group audit with audit procedures
being performed on certain financial statement line items in respect of Syntec. In total the audit work performed accounted for
100% of both consolidated revenue and profit and 98% of consolidated net assets.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The
range of materiality allocated across components was between £238,000 to £286,000. Certain components were audited to a
local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope
of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example
in determining sample sizes. Our performance materiality was 75% (2021: 75%) of overall materiality, amounting to £238,300
(2021: £228,700) for the group financial statements and £457,000 (2021: £241,900) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was
appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit above
£15,800 (group audit) (2021: £15,200) and £30,500 (company audit) (2021: £16,100) as well as misstatements below those
amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern basis
of accounting included:
• We reviewed the Directors’ model supporting their going concern assumption. We discussed with management the
assumptions applied in the going concern review so we could understand and challenge the rationale for those assumptions,
using our knowledge of the business. We tested the model’s mathematical accuracy and considered the reasonableness of
the revenue and cost assumptions made and the available headroom throughout a period of at least twelve months from the
date of approval of the financial statements; and
• We reviewed management’s sensitivity scenarios including their severe but plausible downside. We considered potential
mitigating actions available to the Group that are achievable and within management’s control. We then assessed the
availability of liquid resources under the different scenarios and the associated covenant tests applicable.
60
Corporate Governance | Independent auditors report
61
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group’s and the company’s ability to continue as a going concern for
a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and
the company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the
other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this
report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’
Report for the year ended 31 March 2022 is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic report and Directors’ Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities, the directors are responsible for the preparation of the
financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The
directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or the company or to cease operations, or have no realistic alternative
but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to breaches of AIM regulations, Payment Card Industry Data Security Standards (PCI DSS), General Data
Protection Regulation (GDPR), and we considered the extent to which non-compliance might have a material effect on the
financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as
the requirements of the Companies Act 2006 and UK tax regulations. We evaluated management’s incentives and opportunities
for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal
risks were related to the risk that Group and Company management may record inappropriate journal entries, and the risk of bias
in accounting estimates and judgements. Audit procedures performed by the engagement team included:
•
•
•
•
•
Enquiring of management and those charged with governance together with inspection of policy documentation as to the
Group’s and Company’s high-level policies and procedures to prevent and detect fraud, these enquiries were corroborated
through review of Board minutes provided. Inspection of regulatory correspondence, to identify actual and potential breaches
of laws and regulations;
Enquiring of those charged with governance and management as to whether they have knowledge of any actual, suspected
or alleged fraud and breaches of laws and regulations;
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations (for example
credit to revenue with a debit entry to an unexpected account) or journals posted by senior management;
Auditing one-off transactions, such as acquisition related and restructuring costs to ensure these have been appropriately
accounted for; and
Testing accounting estimates (because of the risk of management bias), including challenging assumptions and judgements
made by management in their significant accounting estimates.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements.
Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.
org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
62
Corporate Governance | Independent auditors report
63
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a bod in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Financial Statements
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
•
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received
from branches not visited by us; or
certain disclosures of directors’ remuneration specified by law are not made; or
the company financial statements are not in agreement with the accounting records and returns.
•
•
We have no exceptions to report arising from this responsibility.
Matthew Mullins (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Watford
15 June 2022
Consolidated Statement of Total Comprehensive Income 64
Consolidated Statement of Financial Position 65
Company Statement of Financial Position
66
Consolidated Statement of Changes in Equity 67
Company Statement of Changes in Equity 68
Consolidated Statement of Cash Flows
69
Notes to the Financial Statements 70
Shareholder Information
102
64
Consolidated and Company Statements
65
Consolidated statement of total comprehensive income
Consolidated statement of financial position
for the year ended 31 March 2022
as at 31 March 2022
Notes
2022
£’000
2021
£’000
Notes
2022
£’000
2021
£’000
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Adjusted operating profit
Amortisation of acquired intangible assets
Expenses relating to share option schemes
Exceptional restructuring costs
Costs relating to acquisition
Profit from operating activities
Finance charges
Finance income
Profit before taxation
Taxation
Profit for the financial year
Other comprehensive income
Items that will be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations
Other comprehensive income for the year, net of income tax
4
4
12
23
8
27
5
9
9
10
31,780
30,486
(6,357)
25,423
(6,291)
24,195
(23,037)
(20,645)
2,386
5,229
(751)
(241)
(866)
(985)
2,386
(74)
6
2,318
(743)
1,575
3,550
4,749
(663)
(536)
-
-
3,550
(87)
48
3,511
(717)
2,794
139
139
134
134
Total comprehensive income for the year attributable to the equity holders of the Company
1,714
2,928
Profit per share
Basic earnings per 0.25p share
Diluted earnings per 0.25p share
2022
2021
pence
pence
0.59
0.51
1.09
1.06
11
11
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use leased assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Other interest-bearing loans and borrowings
Lease liabilities
Non-current liabilities
Lease liabilities
Deferred tax liabilities
Net assets
Equity
Called up share capital
Share premium account
Capital redemption reserve
Merger reserve
Currency reserve
Retained earnings
Total equity
12
13
14
10
17
18
19
20
22
14
14
10
21
21
39,664
4,189
1,516
1,789
6,527
4,307
1,310
3,211
47,158
15,355
268
12,283
2,840
15,391
62,549
174
13,277
12,706
26,157
41,512
(18,286)
(18,482)
-
(609)
(975)
(517)
(18,895)
(19,974)
(928)
(2,983)
(3,911)
(825)
(296)
(1,121)
39,743
20,417
732
22,180
198
2,697
1,121
12,815
39,743
638
2,663
198
2,697
982
13,239
20,417
The Financial Statements were approved by the Board of Directors on 15 June 2022 and signed on its behalf by:
C Herbert
Chief Financial Officer
Company Registration Number 3435822
Financial Statements |
66
Consolidated and Company Statements
67
Company statement of financial position
Consolidated statement of changes in equity
as at 31 March 2022
for the year ended 31 March 2022
Notes
2022
£’000
2021
£’000
Called up
share capital
Share
premium
account
Capital
redemption
reserve
Merger
reserve
Currency
reserve
Retained
earnings
Total
Shareholders’
equity
Assets
Non-current assets
Property, plant and equipment
Investments in group companies
Deferred tax asset
Long-term debtor
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Other interest-bearing loans and borrowings
Non-current liabilities
Deferred tax liabilities
Net assets
Equity
Called up share capital
Share premium account
Capital redemption reserve
Merger reserve
Retained earnings
Total equity
13
15
18
18
19
20
22
10
21
21
2,866
51,629
2
2,909
20,153
2
4,034
3,506
58,531
26,570
93
2,383
2,476
643
5,055
5,698
61,007
32,268
(26,896)
(16,388)
-
(975)
(26,896)
(17,363)
-
-
(133)
(133)
34,111
14,772
732
22,180
198
2,697
8,304
34,111
638
2,663
198
2,697
8,576
14,772
The Company has taken advantage of the exemption under Section 408 of the Companies Act 2006 from presenting its own
income statement in these Financial Statements. The Company’s profit after tax for the year was £1,120,000 (2021: profit after tax of
£4,293,000). The Financial Statements were approved by the Board of Directors on 15 June 2022 and signed on its behalf by:
C Herbert
Chief Financial Officer
Company Registration Number 3435822
Balance at 1 April 2021
638
2,663
198
2,697
982
13,239
£’000
£’000
£’000
£’000
£’000
£’000
Total comprehensive income for the year
Profit for the financial year
Other comprehensive income for the year
Total comprehensive income for the year
Dividends paid in the year
Shares transacted through Employee Benefit Trust
Purchase of own shares
Shares purchased for share ownership plan
Shares issued under the share options schemes
Share based payment charge
Shares issued as part of acquisition
Deferred tax on share options
Transactions with owners recorded directly in equity
Balance at 31 March 2022
-
-
-
-
-
-
-
3
-
91
-
94
732
-
-
-
-
-
-
-
226
-
19,291
-
19,517
22,180
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
139
139
-
-
-
-
-
-
-
-
-
1,575
-
1,575
(1,559)
(75)
(126)
(111)
-
464
-
(592)
(1,999)
198
2,697
1,121
12,815
39,743
Called up
share capital
Share
premium
account
Capital
redemption
reserve
Merger
reserve
Currency
reserve
Retained
earnings
Total
Shareholders’
equity
Balance at 1 April 2020
638
2,663
198
2,697
848
11,965
£’000
£’000
£’000
£’000
£’000
£’000
Total comprehensive income for the year
Profit for the financial year
Other comprehensive expense for the year
Total comprehensive income for the year
Dividends paid in the year
Shares transacted through Employee Benefit Trust
Shares purchased for share ownership plan
Share based payment charge
Deferred tax on share options
Transactions with owners recorded directly in equity
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
134
134
-
-
-
-
-
-
2,794
-
2,794
(1,558)
(138)
(241)
303
114
(1,520)
(1,520)
Balance at 31 March 2021
638
2,663
198
2,697
982
13,239
20,417
£’000
20,417
1,575
139
1,714
(1,559)
(75)
(126)
(111)
229
464
19,382
(592)
17,612
£’000
19,009
2,794
134
2,928
(1,558)
(138)
(241)
303
114
Financial Statements |
68
Consolidated and Company Statements
69
Company statement of changes in equity
Consolidated statement of cash flows
for the year ended 31 March 2022
for the year ended 31 March 2022
Called up
share capital
Share
premium
account
Capital
redemption
reserve
Merger
reserve
Retained
earnings
Total
Shareholders’
equity
Balance at 1 April 2021
638
2,663
198
2,697
8,576
£’000
£’000
£’000
£’000
£’000
£’000
14,772
Profit for the financial year and total comprehensive income
Dividends paid in the year
Shares transacted through Employee Benefit Trust
Purchase of own shares
Shares purchased for share ownership plan
Shares issued under the share options schemes
Share based payment charge
Shares issued as part of acquisition
Transactions with owners recorded directly in equity
Balance at 31 March 2022
-
-
-
-
-
3
-
91
94
732
-
-
-
-
-
226
-
19,291
19,517
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(75)
(126)
(111)
-
479
-
(1,392)
22,180
198
2,697
8,304
(75)
(126)
(111)
229
479
19,382
18,219
34,111
1,120
1,120
(1,559)
(1,559)
Called up
share capital
Share
premium
account
Capital
redemption
reserve
Merger
reserve
Retained
earnings
Total
Shareholders’
equity
Balance at 1 April 2020
638
2,663
198
2,697
5,917
£’000
£’000
£’000
£’000
£’000
£’000
12,113
Profit for the financial year and total comprehensive income
Dividends paid in the year
Shares transacted through Employee Benefit Trust
Shares issued under the share option schemes
Share based payment charge
Transactions with owners recorded directly in equity
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,293
4,293
(1,558)
(1,558)
(138)
(241)
303
(138)
(241)
303
(1,634)
(1,634)
Balance at 31 March 2021
638
2,663
198
2,697
8,576
14,772
Cash flows from operating activities
Cash generated from operations
Tax received/ (paid)
Interest paid
Interest paid on lease liability
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Business acquisition
Interest received
Net cash utilised in investing activities
Cash flows from financing activities
Dividends paid
Repayment of borrowings
Principal elements of lease payments
Purchase of own shares
Shares purchased for share ownership plan
Issue of shares net of issue costs
Cash outflow from acquiring shares from the Employee Benefit Trust
Net cash generated from / (utilised in) financing activities
Decrease in cash and cash equivalents
Cash and cash equivalents at the start of the period
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the period
The notes on pages 70 to 101 form an integral part of these financial statements.
Notes
2022
£’000
2021
£’000
26
9
9
13
12
27
9
14
21
19
19
3,362
4,385
88
(23)
(51)
(10)
(54)
(33)
3,376
4,288
(308)
(375)
(22,500)
6
(1,175)
(573)
-
48
(23,177)
(1,700)
(1,559)
(1,558)
(975)
(500)
(126)
(110)
13,311
(75)
(975)
(461)
-
(241)
-
(138)
9,966
(3,373)
(9,835)
12,706
(31)
(785)
13,541
(50)
2,840
12,706
Financial Statements |
70
Notes to the Financial Statements
71
Notes to the Financial Statements for the year ended 31 March 2022
General Information
New accounting standards effective for the Group and
the Directors have reviewed a number of scenarios, including
Valuation of goodwill and intangible assets on acquisition
The accounting policies set out below have, unless otherwise
Company in these financial statements:
the severe yet plausible downside scenario which assumes
As a result of the successful acquisition of Syntec Holdings
stated, been applied consistently to all periods presented in
No new or revised accounting standards were adopted in the
no new business, with respect to levels of new business. In all
Limited, acquisition accounting has been included as a
these Consolidated Financial Statements.
year. In April 2021, the IFRS Interpretations Committee issued a
scenarios the Directors were able to conclude that the Group
significant estimate for the year ended 31 March 2022.
new interpretation in relation to accounting for customisation
has adequate cash to continue in operational existence for the
Acquisition accounting
involves a significant degree of
Eckoh plc is a public limited Company and is incorporated
and configuration costs of cloud computing arrangements.
foreseeable future.
in the UK under the Companies Act 2006. The address of the
Following a detailed review, it was confirmed that the new
Company’s registered office is Telford House, Corner Hall,
interpretation does not materially impact the accounting
Hemel Hempstead, HP3 9HN.
treatment for costs incurred in the business.
Eckoh plc (the “Company”) is a global provider of Customer
There are a number of other amendments and clarifications
Engagement Data and Payment Security Solutions.
to IFRS effective in future years, which are not expected to
significantly
impact the Group’s consolidated results or
The Group Financial Statements consolidate its subsidiaries
financial position.
(together referred to as the “Group”). The Company’s financial
statements present information about the Company as a
Going concern
separate entity and not about its Group.
In determining the appropriate basis of preparation of the
1. Basis of preparation
financial statements, the Directors are required to consider
whether the Group and Company can continue in operational
existence for the foreseeable future.
The Group’s financial statements have been prepared and
The Board has carried out a going concern review and
approved by the Directors in accordance with UK adopted
concluded that the Group and Company have adequate cash
international accounting standards in conformity with the
to continue in operational existence for the foreseeable future.
requirements of the Companies Act 2006 and the Company’s
Financial Statements have been prepared in accordance
The Directors have prepared cash flow forecasts for a period
with United Kingdom Generally Accepted Accounting Practice
in excess of 12 months from the date of approving the financial
(United Kingdom Accounting Standards, comprising FRS 101
statements. As at 31st March 2022, the £10 million of funding
“Reduced Disclosure Framework”, and applicable law). The
(£5 million RCF and £5 million overdraft) from Barclays Bank
Company has also applied the exemptions available under
is undrawn. Bank covenants have been reviewed and are
FRS 101 in respect of the following disclosures:
comfortably achieved for the year to 31 March 2022.
• A Cash Flow Statement and related notes
Our US operation
is underpinned completely by fixed
• Comparative period reconciliation for share capital
contractual fees. In the UK, clients have a variety of commercial
• Disclosures in respect of transactions with wholly owned
models including fixed fees and transactional arrangements,
subsidiaries
with varying levels of commitment.
• Disclosures in respect of capital management
• IFRS 2 Share based payments in respect of group settled
In addition to our key business indicator, total orders and new
share-based payments.
business orders, we have also introduced Annual Recurring
Revenue (ARR) to measure the health of the business, which
This financial information has been prepared on a going
includes all clients that we are billing. In the US, we continue to
concern basis and under the historical cost convention.
see the majority of the Secure Payments contracts won and
The Group’s and Company’s financial statements are presented
have accelerated their move into the cloud. Following the
in Pounds Sterling, which is the Company’s functional currency.
pandemic we do not anticipate this trend to reverse and
All financial information presented has been rounded to the
whilst this reduces the upfront payments (and cash received)
nearest one thousand, except where stated.
for implementations, it increases the proportion of recurring
delivered through Eckoh’s cloud platforms, as large enterprises
revenue and improves the operational gearing, earnings
quality and visibility in the business. We anticipate the renewal
rate for the UK and US businesses to remain unchanged
during this period. When preparing the cash flow forecasts
2. Summary of principal accounting
policies
Critical accounting estimates and judgements
The preparation of financial statements in accordance with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise judgement in the process
of applying the Group’s and Company’s accounting policies.
Estimates and judgements are continually evaluated and are
based on historical experience and reasonable expectations of
future events. Actual results may differ from those estimates.
Critical accounting estimates and assumptions
The accounting policies cover areas that are considered by the
Directors to require estimates and assumptions which have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
The policies, and the related notes to the financial statements,
are found below:
Impairment of investments in subsidiaries (Company only)
The Company has an investment in subsidiaries balance of
£51.6million (2021: £20.1million) and intercompany receivables of
£4.0million (2021: £4.1million). The Company assess the carrying
values of its investments in subsidiaries and the recoverability of
intercompany receivables at the end of each reporting period.
Where indicators of impairment are identified the estimation
of the recoverable values requires an estimation of future cash
flows from each subsidiary and selection of appropriate discount
rates in order to determine the net present value of the cash flows.
Share based payments
The fair value of share-based payments is estimated using the
methods detailed in note 23 and using certain assumptions.
The Black Scholes and Monte Carlo valuation models have been
used in determining the fair value of share-based payments.
The key assumptions around volatility, expected life and risk-
free rate of return are based, respectively, on historic volatility
over a similar previous period, management’s estimate of
the average expected period to exercise, and the yield on
zero-coupon UK government bonds of a term consistent with
assumed option life.
judgement and estimation when assessing the overall deal
consideration and valuing the purchased assets and liabilities.
In a business combination, intangible assets are identified and
recognised at fair value. The assumptions involved in valuing
these intangible assets require the use of estimates that may
differ from the actual outcome. These estimates cover future
growth rates, expected inflation rates and the discount rate
used. Changing the assumptions selected by management
could significantly affect the allocation of the purchase price
paid between goodwill and other acquired intangibles.
Deferred taxation
The key estimates made for deferred taxation are on the future
profitability of the business and the Company the trading
will reside in or capital expenditure to determine whether
deferred tax assets should be recognised. Deferred tax assets
amounting to £9.5 million were not recognised in respect of
trading losses of £2.3 million and capital losses of £7.2 million
due to the statutory entity the losses are held. It is possible that
the deferred tax assets actually recoverable may differ from
the amounts recognised if actual taxable profits and capital
expenditure differ from estimates.
Critical accounting judgements
Contract revenue
Following the acquisition of Syntec Holdings Limited, IFRS 15:
Revenue from Contracts with Customers was implemented.
Syntec did not previously capture implementation costs on
a client-by-client basis, management has therefore applied
judgement in estimating that the implementation costs per
contract should be 20% based on historical performance of
the Eckoh US business as well as management’s views on the
efficiency of the Syntec implementation process.
Deferred taxation
Deferred tax liabilities are recognised for all taxable temporary
differences but, where there exist deductible temporary
differences, judgement is required as to whether a deferred tax
asset should be recognised based on the availability of future
taxable profits. Judgement is also required regarding the rate
at which deferred tax is recognised, following the substantial
enactment of Finance Bill 2021, resulting in an increase in the
UK tax rate to 25% from 1 April 2023. UK deferred tax assets and
liabilities expected to unwind prior to 1 April 2023 have been
recognised at 19%, with those expected to unwind after 1st April
Financial Statements |
72
Notes to the Financial Statements
73
2023 being recognised at 25%. At 31 March 2022, the Group
the market-based value of the replacement awards compared
Acquired intangible assets are carried at cost less accumulated
The gain or loss arising on the disposal of an asset is determined
recognised deferred tax assets of £1.8 million and deferred tax
with the market-based value of the acquiree’s awards and the
amortisation and accumulated impairment losses. Amortisation
by comparing the disposal proceeds and the carrying amount
liabilities of £3.0 million. Included within the deferred tax asset
extent to which the replacement awards relate to past and/or
is recognised on a straight-line basis over estimated lives, on
of the asset and is recognised in the income statement.
of £1.8 million is £1.4 million in respect of tax losses and tax
future service.
credits and included within the deferred tax liabilities of £3.0
million is £2.8 million in respect of the intangible asset from the
(b) Subsidiaries
acquisition of Syntec.
Basis of consolidation
(a) Business combinations
Subsidiaries are entities controlled by the Group. The Financial
Statements of subsidiaries are included in the Consolidated
Financial Statements from the date that control commences
until the date that control ceases.
Business combinations are accounted for using the acquisition
method as at the acquisition date – i.e. when control is
(c) Loss of control
the following bases:
Customer relationships – 5 years
Intellectual property – 5 years
Trade name – 3 years
Depreciation is calculated using the straight-line method to
allocate the cost of each asset to its estimated residual value
over its expected useful life, as follows:
Land – is not depreciated
Buildings – 25 years
(c) Research and development
Fixtures and equipment – between 3 and 6 years
Research costs are charged to the income statement in the
Leasehold improvements – over the term of the lease
year in which they are incurred. Development expenses include
transferred to the Group. Control is the power to govern the
On the loss of control, the Group derecognises the assets and
expenses incurred by the Group to set up or enhance services
Material residual values and useful lives are reviewed, and
financial and operating policies of an entity so as to obtain
liabilities of the subsidiary, any non-controlling interests and
to clients. Development costs that mainly relate to staff salaries
adjusted if appropriate, at least annually. An asset’s carrying
benefits from its activities. In assessing control, the Group takes
the other components of equity related to the subsidiary. Any
are capitalised as intangible assets when it is probable that
amount is written down immediately to its recoverable amount
into consideration potential voting rights that are currently
surplus or deficit arising on the loss of control is recognised in
the project will be a success, considering its commercial
if the asset’s carrying amount is greater than its estimated
exercisable.
profit or loss. If the Group retains any interest in the previous
and technological feasibility, and costs can be measured
recoverable amount.
The Group measures goodwill at the acquisition date as:
date that control is lost. Subsequently that retained interest
are expensed as incurred. Capitalised development costs are
The Company holds an investment property, which comprises
• the fair value of the consideration transferred; plus
is accounted for as an equity-accounted investee or as an
amortised on a straight-line basis over the estimated useful
of freehold land and office buildings that are held for capital
• the recognised amount of any non-controlling interests in
available-for-sale financial asset depending on the level of
life of the asset, which is generally assumed to be three years.
appreciation.
subsidiary, then such interest is measured at fair value at the
reliably. Development costs that do not meet those criteria
the acquiree; plus
influence retained.
• if the business combination is achieved in stages, the fair
Amortisation is charged to administrative expenses in the
The Investment Property was initially recognised at cost and
value of the pre-existing equity interest in the acquiree; less
(d) Transactions eliminated on consolidation
income statement.
subsequently carried at cost less accumulated depreciation
• the net recognised amount (generally fair value) of the
Intra-group balances and transactions, and any unrealised
and accumulated impairment losses.
identifiable assets acquired and liabilities assumed.
income and expenses arising from intra-group transactions, are
The carrying value of intangible assets is assessed at the end
When the excess is negative, a bargain purchase gain is
Unrealised gains arising
from
transactions with equity
Investments in subsidiaries are held at cost less accumulated
recognised immediately in profit or loss.
accounted investees are eliminated against the investment
Impairment of non-financial assets
impairment losses.
eliminated in preparing the Consolidated Financial Statements.
of each financial year for impairment.
Investments in subsidiaries
to the extent of the Group’s interest in the investee. Unrealised
An impairment loss is recognised in the income statement for
The consideration transferred does not include amounts
losses are eliminated in the same way as unrealised gains, but
the amount by which the asset’s carrying amount exceeds its
Inventories
related to the settlement of pre-existing relationships. Such
only to the extent that there is no evidence of impairment.
recoverable amount. The recoverable amount is the higher of the
Inventories are valued at the lower of cost and net realisable
amounts are generally recognised in profit or loss.
Transaction costs, other than those associated with the issue
(a) Goodwill
Intangible assets
asset’s fair value less costs to sell, and the value-in-use based on
value. The cost of finished goods and work in progress
an internal discounted cash flow evaluation. For the purpose of
comprises design costs, direct labour and other direct costs.
assessing impairment, assets are grouped at the lowest levels for
Net realisable value is the estimated selling price in the
of debt or equity securities, that the Group incurs in connection
Goodwill represents the excess of the fair value of the
which there are separately identifiable cash flows. All assets are
ordinary course of business less applicable selling expenses.
with a business combination are expensed as incurred.
consideration paid over the fair value attributable to the
subsequently reassessed for indications that an impairment loss
separately identifiable net assets acquired and is capitalised
previously recognised may no longer exist.
Financial assets
Any contingent consideration payable is measured at fair
on the Group balance sheet.
value at the acquisition date. If the contingent consideration is
Property, plant and equipment
Trade and other receivables do not carry interest and are stated
Trade and other receivables
classified as equity, then it is not re-measured and settlement
Goodwill is not amortised and is reviewed for impairment at
Property, plant and equipment
is stated at cost or fair
at their fair value as reduced by allowances for estimated
is accounted for within equity. Otherwise, subsequent changes
least annually. Any impairment is recognised in the period in
value at acquisition, net of depreciation and any provisions
irrecoverable amounts. The Group applies the IFRS 9 simplified
in the fair value of the contingent consideration are recognised
which it is identified.
in profit or loss.
for impairment. Cost includes expenditure that is directly
approach to measure expected credit losses which uses a
attributable to the acquisition of the items.
lifetime expected loss allowance for all trade receivables. To
(b) Acquired intangible assets
measure the expected credit losses, trade receivables have
If share-based payment awards (replacement awards) are
Intangible assets acquired in a business combination are
Subsequent costs are included in the asset’s carrying amount
been grouped based on shared credit risk characteristics and
required to be exchanged for awards held by the acquiree’s
initially recognised at their fair value at the acquisition date,
or recognised as a separate asset, as appropriate, only when
the number of days past due. Trade receivables are written
employees (acquiree’s awards) and relate to past services,
which is regarded as their cost. Where necessary the fair value
it is probable that future economic benefits associated with
off when there is no reasonable expectation of recovery.
then all or a portion of the amount of the acquirer’s replacement
of assets at acquisition and their estimated useful lives are
the item will flow to the Group and the cost of the item can
Indicators that there is no reasonable expectation of recovery
awards is included in measuring the consideration transferred
based on independent valuation reports.
be measured reliably. All other repairs and maintenance are
include, amongst others, the failure of a debtor to engage
in the business combination. This determination is based on
charged to the income statement during the financial period
in a repayment plan with the Group and a failure to make
in which they are incurred.
Financial Statements | 74
Notes to the Financial Statements
75
contractual payments for an extended period.
The Group does not enter into forward contracts to hedge
Cash and cash equivalents
forecast transactions.
Employee Benefits
(a) Pensions
market vesting conditions are expected to be met, such that
the amount ultimately recognised as an expense is based on
The Group operates a defined contribution scheme to the
the number of awards that meet the related service and non-
Cash and cash equivalents in the statement of financial
The assets and liabilities of foreign operations, including
benefit of its employees. Contributions payable are charged to
market performance conditions at the vesting date. For share-
position comprise cash at bank and in hand, short-term
goodwill and fair value adjustments arising on consolidation,
income in the year they are payable.
based payment awards with non-vesting conditions, the grant
deposits and other short-term liquid investments.
are translated to the Group’s presentational currency, Sterling,
at foreign exchange rates ruling at the balance sheet date. The
(b) Bonus schemes
date fair value of the share-based payment is measured to
reflect such conditions and there is no true-up for differences
In the cash flow statement, cash and cash equivalents
revenues and expenses of foreign operations are translated at
The Group recognises a liability and an expense for bonuses
between expected and actual outcomes.
comprise cash and cash equivalents as defined above, net of
an average rate for the year where this rate approximates to the
payable to: i) employees based on achievement of a series of
bank loans.
foreign exchange rates ruling at the dates of the transactions.
financial targets; and ii) senior management and executive
The fair value of the amount payable to employees in respect
directors based on achievement of a series of financial and
of share appreciation rights, which are settled in cash, is
Credit and
liquidity
risk management
is described
Exchange differences arising from this translation of foreign
non-financial targets.
in note 3.
Equity
operations are reported as an item of other comprehensive
income and accumulated in the translation reserve. Such
translation differences would be reclassified to profit and loss
(c) Share-based payments
From time to time on a discretionary basis, the Board of
each reporting date and at settlement date. Any changes
recognised as an expense with a corresponding increase in
liabilities, over the period that the employees unconditionally
become entitled to payment. The liability is re-measured at
Equity comprises the following:
in the period in which the operation is disposed of.
Directors award high-performing employees bonuses in the
in the fair value of the liability are recognised as personnel
• Share capital represents the nominal value of Ordinary
Leases
form of share options. The options are subject to a three-
expenses in profit or loss.
year vesting period and their fair value is recognised as an
Shares
Following the implementation of IFRS 16 Leases, from 1 April
employee benefits expense with a corresponding increase in
(d) Employee Share Ownership Plan
• Capital redemption reserve represents the maintenance of
2019, each lease is recognised as a right-of-use asset with a
equity over the vesting period. The fair value of share options
The Group’s Employee Share Ownership Plan (‘ESOP’) is a
capital following the share buy back and tender offer
corresponding liability at the date at which the lease asset is
granted is recognised within staff costs with a corresponding
separately administered trust. The assets of the ESOP comprise
• Share premium account represents consideration
for
available for use by the Group. Interest expense is charged
increase in equity. The proceeds received are credited to share
shares in the Company and cash. The assets, liabilities, income
Ordinary Shares in excess of the nominal value
to the consolidated income statement over the lease period
capital and share premium when the options are exercised.
and costs of the ESOP have been included in the Financial
• Merger reserve represents consideration in excess of the
so as to produce a constant periodic rate of interest on the
Statements in accordance with SIC 12, ‘Consolidation - Special
nominal value of shares issued on certain acquisitions
remaining balance of the liability. The right-of-use asset is
The fair value of share options was measured using the
purpose entities’ and IAS 32, ‘Financial Instruments: Disclosure
• Currency reserve represents exchange differences arising
depreciated over the shorter of the asset’s useful life and the
Black Scholes and Monte Carlo valuation models, taking into
and Presentation’. The shares in the Company are included at
on consolidation of Group companies with a functional
lease term on a straight-line basis.
account the terms and conditions upon which the grants were
cost to the ESOP and deducted from Shareholders’ funds. When
currency different to the presentation currency
made. The amount recognised as an expense is adjusted to
calculating earnings per share these shares are treated as if
• Retained earnings represent retained profits less losses and
Assets and liabilities arising from a lease are initially measured
reflect the actual number of share options that vest except
they were cancelled.
distributions.
on a present value basis. The lease payments are discounted
using the interest rate implicit in the lease. If that rate cannot
where forfeiture is only due to share prices not achieving the
threshold of vesting.
(e) US share save scheme
Foreign currency transactions
be determined, the lessee’s incremental borrowing rate is used,
The Eckoh plc 2019 US Sharesave Scheme (the “2019 Sharesave
Transactions
in foreign currencies are translated to the
being the rate that the lessee would have to pay to borrow the
IFRS 2 has been applied to all options granted after 7 November
Scheme”), was approved by Shareholders at the 2019 AGM
respective functional currencies of Group entities at the foreign
funds necessary to obtain an asset of similar value in a similar
2002 that have not vested on or before 1 April 2006. A deferred
and introduced to employees in December 2019. Employees
exchange rate ruling at the date of the transaction. Monetary
economic environment with similar terms and conditions.
tax adjustment is also made relating to the intrinsic value of the
are invited to enrol in the 2019 Sharesave Scheme annually
assets and liabilities denominated in foreign currencies at
share options at the balance sheet date (see separate policy).
and are granted an option to purchase up to a number of
the balance sheet date are retranslated to the functional
Right-of-use assets are measured at cost comprising the
Ordinary Shares at the end of the offering period. The number
currency at the foreign exchange rate ruling at that date.
amount of the initial measurement of the lease liability, any
As a result of the grant of share options since 6 April 1999 the
is determined by dividing the total payroll deductions credited
Foreign exchange differences arising on translation are
lease payments made at or before the commencement date
Company will be obliged to pay employer’s National Insurance
to the employee’s account as of the exercise date by the
recognised in the income statement, with the exception of
less any lease incentives received, any initial direct costs and
contributions on the difference between the market value of
option price. The option price is equal to the closing price of
exchange differences arising on quasi-equity liabilities which
restoration costs.
are recognised in other comprehensive income. Non-monetary
the underlying shares and their exercise price when the options
the Ordinary Shares on the London Stock Exchange on either (i)
are exercised. A provision is made for this liability using the
the date the offering period begins, or (ii) the date of exercise,
assets and liabilities that are measured in terms of historical cost
Where leases include an element of variable lease payment
value of the Company’s shares at the balance sheet date and
whichever results in the lowest price per share. Any shares
in a foreign currency are translated using the exchange rate at
or the option to extend the lease at the end of the initial term,
is spread over the vesting period of the share options.
acquired will be held in accordance with the terms of the
the date of the transaction. Non-monetary assets and liabilities
each lease is reviewed and a decision is made on the likely
Scheme.
denominated in foreign currencies that are stated at fair value
term of the lease.
are retranslated to the functional currency at foreign exchange
The grant date fair value of share-based payment awards
granted to employees is recognised as an employee expense,
Government Grants
rates ruling at the dates the fair value was determined.
Payments associated with short-term leases and leases of
with a corresponding increase to equity, over the period that
The Group received government assistance as a result of
low-value assets are recognised on a straight-line basis as an
expense in the consolidated income statement, during the year
there was a franking machine and the rental of a storage unit.
the employees unconditionally become entitled to the awards.
the COVID-19 pandemic in the form of contributions towards
The amount recognised as an expense is adjusted to reflect
employee costs. For Government assistance which meets
the number of awards for which the related service and non-
the definition of a Government grant, under IAS 20 the Group
Financial Statements | 76
Notes to the Financial Statements
77
applies the income approach to account for the grants
In addition to the initial set-up costs, there are on-going support
Deferred tax assets are recognised to the extent that it is
The contractual maturities of financial liabilities are set out in
received. As such, the grant is recognised in the Income
and maintenance and running costs of the service. In the UK,
probable that future taxable profit will be available against
note 22.
Statement as a reduction of the related costs incurred. In the
clients have a variety of commercial models including fixed
which the temporary differences can be utilised.
period ending 31 March 2022, grant income of £12k, (FY21: £311k)
fees and transactional arrangements, the revenue, whether it
Interest rate risk
relating to claims made for Contact Centre Agents, who are
is the fixed monthly fee or based on transactions is recognised
Deferred tax on temporary differences associated with shares
The Group principally finances
its operations
through
employed on Zero-hour contracts, was received. There are no
in the month it relates to. In the US business and the Syntec
in subsidiaries is not provided if reversal of these temporary
Shareholders’ equity and working capital. The Group and
unfulfilled conditions or other contingencies attached to this
business where the Secure Payments business is contracted
differences can be controlled by the Group and it is probable
Company has exposure to interest rate fluctuations on the
government assistance.
on an opex style basis the monthly licence fee charged to the
that reversal will not occur in the foreseeable future.
loan, its cash and short-term deposits.
Irregular restructuring costs
If the Group incurs irregular or one-off costs due to the closure
(ii) Coral product
client is recognised in the month it relates to.
Changes in deferred tax assets or liabilities are recognised as
The Group has adopted a sensitivity analysis that measures
a component of tax expense in the income statement, except
changes in the fair value of financial instruments and interest-
of an activity, such as third-party Support or following the
Revenue arises from the sale of licences, implementation fees
where they relate to items that are charged or credited directly
bearing loans and any resultant impact on the income
acquisition of a business, these costs are disclosed in the
and on-going support and maintenance. Under IFRS 15, each
to equity in which case the related deferred tax is also charged
statement of an increase or decrease of 2% in market interest
Income Statement as irregular restructuring costs and excluded
component is defined as a performance obligation. Revenue
or credited directly to equity.
rates.
from adjusted earnings before interest, tax, depreciation and
is recognised for sales of licences when they are delivered to
amortisation (Adjusted EBITDA) and excluded from Adjusted
the client; revenue from implementation fees is recognised by
Financial liabilities
Operating Profit.
Revenue recognition
estimating a percentage of completion based on the direct
labour costs incurred to date as a proportion of the total
estimated costs required to complete the implementation; and
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Group or
Company becomes a party to the contractual provisions of the
The Group, including the newly acquired Syntec Holdings
revenue for on-going support and maintenance is recognised
instrument. Financial liabilities are stated at amortised cost.
Limited recognises revenue in accordance with IFRS 15: Revenue
each month as the service is provided.
from Contracts with Customers (“IFRS 15”). IFRS 15 provides a
single, principles-based five-step model to be applied to all
(iii) Third party support services
sales contracts, based on the transfer of control of goods and
Revenue is earnt from providing expert third party support for
services to customers. Revenue represents the fair value of the
contact centre infrastructure and is recognised on a pro-rated
sale of goods and services and after eliminating sales within
basis over the period of the contract.
the Group and excluding value added tax or overseas sales
A financial liability is derecognised only when the obligation is
discharged, is cancelled or it expires.
3. Financial risk management
2% decrease
in interest
rates
£’000
2% increase
in interest
rates
£’000
(115)
115
Impact on financial interest
in the income statement:
(loss)/gain
Foreign currency risk
The Group’s principal exposure to exchange rate fluctuations
arises on the translation of overseas net assets, profits and
losses into the presentation currency. This risk is managed
taxes. The following summarises the method of recognising
(iv) Telephony services
The operations of the Group expose it to a variety of financial
by taking differences that arise on the retranslation of the
revenue for the solutions and products delivered by the Group.
Syntec is Ofcom regulated and has a small number of
risks: liquidity risk, interest rate risk, foreign currency risk and
net overseas investments to the currency reserve. Foreign
contracts with clients to provide telecommunication services.
credit risk. Policies for managing these risks are set by the
currency risk on cash balances is monitored through cash
(i) Secure Payment solutions and
These revenues are based on transactional volume and are
Board following recommendations from the Chief Financial
flow forecasting and currency is held in foreign currency
hosted services
recognised in the month it relates to.
Officer. All financial risks are managed centrally. The policy for
bank accounts only to the extent that it is required for
Due to the unique nature of the Secure Payments solution
and clients’ reliance on Eckoh’s and Syntec’s PCI-DSS Level
Taxation
each of the above risks is described in more detail below.
working capital purposes. No sensitivity analysis is provided in
respect of foreign currency risk as due to the Group’s working
1 compliance, the delivery and on-going support and
Current tax is the tax currently payable based on taxable profit
The Group’s financial instruments comprise cash, short-term
capital management practices the risk is considered to be
maintenance of the Secure Payments solution under IFRS 15
for the year.
is one single performance obligation. Therefore, revenue for
deposits, finance leases and various items, such as receivables
moderate. The risk is further explained in the principal risks and
and payables that arise directly from its operations. It is, and
uncertainties on pages 20 to 23.
implementation fees for our hosted Secure Payments solution
Deferred taxation is provided in full, using the liability method, on
has been throughout the year under review, the Group’s policy
and our hosted Customer Contact services; and revenue
temporary differences arising between the tax bases of assets
that no trading in financial instruments shall be undertaken.
Capital management
for hardware and implementation fees for our hosted or
and liabilities and their carrying amounts in the Consolidated
Similarly, the Group did not undertake any financial hedging
The Board’s policy is to maintain a strong capital base with
onsite Secure Payments solution are typically received at the
Financial Statements. Deferred tax is not provided if it arises
arrangements during the year under review. The year-end
the joint objectives to maintain investor, creditor and market
beginning of the contract and held on the balance sheet as
from initial recognition of an asset or liability in a transaction,
position reflects these policies and there have been no
confidence and to sustain future development of the business.
contract liabilities. This revenue is recognised evenly over the
other than a business combination, that at the time of the
changes in policies or risks since the year-end.
period of the contract from the point of delivery of the solution
transaction affects neither accounting nor taxable profit or
to the client. Costs directly attributable to the delivery of the
loss. Deferred tax is calculated at tax rates that are expected to
Liquidity risk
Capital comprises all components of equity (i.e. share capital,
capital redemption reserve, share premium and retained
hardware, the implementation fees and the sales commission
apply to their respective period of realisation, provided they are
Through detailed cash flow forecasting and capital expenditure
earnings). The Board manages the capital structure and makes
costs are deferred onto the balance sheet and held as contract
enacted or substantively enacted at the balance sheet date.
planning, the Group monitors working capital and capital
adjustments as required in the light of changes in economic
assets and released over the contract term from the point of
delivery of the solution to the client.
expenditure requirements and through the use of rolling
conditions. The Board may return capital to Shareholders, issue
short-term investments ensures that cash is available to
new shares or sell assets in order to maintain capital.
meet obligations as they fall due. Cash at bank is pooled and
invested in overnight money market accounts and deposits.
Credit risk management is described in note 18.
Financial Statements |
78
Notes to the Financial Statements
79
Terms and debt repayment schedule
Alternative performance measures (APMs)
Financial assets
Current financial assets
Trade receivables (note 18)
2022
£’000
2021
£’000
4,860
4,551
During the year the business repaid its term loan with Barclays
The Directors consider that disclosing alternative performance
bank. In addition, and as a result of the acquisition of Syntec
measures enhances Shareholders’ ability to evaluate and
Holdings Limited, the Group entered
into new banking
analyse the underlying financial performance of the Group.
arrangements with Barclays Bank for a £5.0 million Revolving
They have identified adjusted operating profit and adjusted
Other receivables (note 18)
852
838
Credit Facility (RCF) and a £5.0 million overdraft facility. The
EBITDA as measures that enable the assessment of the
Accrued income (note 18)
1,501
2,085
RCF is for a term of three years, interest is 2.5% above the Bank
performance of the Group and assists in financial, operational
of England base rate and there is a non-utilisation fee of 0.88%.
and commercial decision-making.
In adjusting
for this
Cash & cash equivalents (note 19)
2,840
12,706
The overdraft is reviewed annually by the bank, has an interest
Total financial assets
10,053
20,180
rate of 1.75% above the Bank of England base rate.
As at 31 March there was no debt drawn under either facility.
measure the Directors have sought to eliminate those items of
income and expenditure that do not specifically relate to the
underlying operational performance of the Group in a specific
year. The table below reconciles operating profit to adjusted
operating profit1 and adjusted EBITDA2
identifying those
Financial liabilities
Current financial liabilities
Trade payables (note 20)
Other payables (note 20)
2022
£’000
899
508
2021
£’000
2,193
294
The collateral to these loans is the land and buildings carrying
reconciling items of income and expense.
value of £3 million.
Earnings per share
The Group presents basic and diluted earnings per share
(“EPS”) data for its Ordinary Shares. Basic EPS is calculated by
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Accrued liabilities (note 20)
4,416
3,470
dividing the profit or loss attributable to Ordinary Shareholders
Operating profit
2,386
3,550
Lease liabilities (note 14)
1,537
1,342
of the Company by the weighted average number of Ordinary
Shares outstanding during the reporting period. Diluted EPS
Total financial liabilities
7,360
7,600
is determined by adjusting the weighted average number of
Other interest-bearing loans and borrowings
Information about the contractual terms of the Group’s
The Group presents adjusted basic and diluted earnings per
interest-bearing loans and borrowings, which are measured
share (“Adjusted EPS”) data for its Ordinary Shares. Adjusted
Ordinary Shares outstanding for the effects of all potential
dilutive Ordinary Shares.
Amortisation of acquired intangible
assets
Expenses relating to share option
schemes
Restructuring costs
Costs relating to business combi-
nations
751
241
866
985
663
536
-
-
at amortised cost are disclosed below. For more information
EPS is defined as profit before tax, expenses relating to share
Adjusted operating profit1
5,229
4,749
about the Group’s exposure to interest rate and foreign
option schemes, amortisation of acquired intangible assets,
currency risk, see above.
restructuring costs and costs relating to business combinations
Non-current financial liabilities
Secured bank loans
Current financial liabilities
Current portion of secured bank loans
2022
£’000
–
-
2021
£’000
–
975
with tax applied at the standard corporation tax rate.
Dividends
Final dividends are recorded in the Group’s Financial Statements
in the period in which they are approved by the Shareholders.
Interim and Special dividends are recorded in the financial
statements in the period in which they are approved and paid.
Determination and presentation of operating segments
The Eckoh Group determines and presents operating
segments based on the information that internally is provided
to the Executive Management team, considered to be the Chief
Operating Decision Maker.
An operating segment is a component of the Eckoh Group
that engages in business activities from which it may earn
revenues and incur expenses. During the current year the
operating segments will be reviewed as the integration of the
Syntec acquisition progresses.
Amortisation of other
intangible assets
Depreciation of owned assets
Depreciation of leased assets
392
680
495
398
704
505
Adjusted EBITDA2
6,796
6,356
1. Adjusted operating profit is the profit from operating activities adjusted for expenses relating
to share option schemes, amortisation of acquired intangible assets, restructuring costs and
costs relating to business combinations.
2. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is the profit
from operating activities adjusted for depreciation, amortisation, expenses relating to
share option schemes, restructuring costs and costs relating to business combinations.
Financial Statements |
80
Notes to the Financial Statements
81
4. Segment analysis
In 2021/22 there was no one customer that individually accounted for more than 10% of the total revenue of the continuing operations
of the Group. In 2020/21 there was one customer that individually accounted for more than 10% of the total revenue of the continuing
Following the acquisition of Syntec Holdings Limited on 22nd December 2021, the key segments reviewed at Board level are the UK
operations of the Group.
(including Eckoh Omni), US operations and Syntec. This will be reviewed over the current year as Eckoh progress with the integration
of Syntec.
Information regarding the results of each operating segment is included below. Performance is measured on operating segments
based on the information that internally is provided to the Executive Management team, considered to be the Chief Operating
Decision Maker.
Current period segment analysis
Segment Revenue
Gross profit
Administrative expenses
Operating profit
Adjusted operating profit
Other expenses2
Operating profit
Profit before taxation
Segment assets
Trade and other receivables
Prepayments and contract assets
Deferred tax asset
Segment liabilities
Trade and other payables
Accruals and contract liabilities
Capital expenditure
Purchase of tangible assets
Purchase of leases
Purchase of intangible assets
Depreciation and amortisation
Depreciation of property, plant & equipment
Depreciation of leased assets
Amortisation
Eckoh UK
£’000
Eckoh US
£’000
Syntec1
£’000
Total 2022
£’000
Total 2021
£’000
18,596
15,593
11,487
8,473
1,697
1,357
31,780
25,423
30,486
24,195
(14,399)
(7,300)
(1,338)
(23,037)
(20,645)
1,194
3,194
(2,000)
1,194
1,156
2,904
2,798
1,103
1,364
6,216
187
-
375
525
353
1,143
1,173
1,728
(555)
1,173
1,149
2,059
954
513
607
4,191
120
686
-
130
108
-
19
307
2,386
5,229
(289)
(2,844)
19
13
2,386
2,318
749
2,819
173
367
5,543
1
-
-
25
34
-
5,712
6,571
1,789
2,336
15,950
308
686
375
680
495
1,143
3,550
4,749
(1,199)
3,550
3,511
5,389
7,888
3,211
3,364
15,118
1,066
1,546
573
704
505
1,061
Revenue by geography
UK
United States of America
Rest of the World
Total Revenue
Timing of revenue recognition
Services transferred at a point in time
Services transferred over time
Eckoh UK
£’000
Eckoh US
£’000
Syntec
£’000
18,117
339
140
-
11,314
173
739
776
182
2022
£’000
18,856
12,429
495
2021
£’000
17,804
12,321
361
18,596
11,487
1,697
31,780
30,486
Eckoh UK
£’000
Eckoh US
£’000
Syntec
£’000
Total 2022
£’000
Total 2021
£’000
15,193
3,403
18,596
8,076
3,411
11,487
1,472
225
1,697
24,741
7,039
31,780
23,240
7,246
30,486
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
Receivables, which are included in, ‘Trade and other receivables’
Contract assets which are included in ‘Trade and other receivables’
Contract liabilities which are included in ‘Trade and other payables’
2022
£’000
4,860
3,828
2021
£’000
4,551
4,359
(9,470)
(11,347)
(782)
(2,437)
Payment terms and conditions in client contracts may vary. In
Contract liabilities result from client payments in advance of
some cases, clients pay in advance of the delivery of solutions
the satisfaction of the associated performance obligations and
or services; in other cases, payment is due as services are
relates primarily to revenue for hardware and implementation
performed or in arrears following the delivery of the solutions
fees. Contract liabilities are released as revenue is recognised.
or services. Differences in timing between revenue recognition
and invoicing result in trade receivables, contract assets, or
Contract assets and contract liabilities are reported on a
contract liabilities in the statement of financial position.
contract-by-contract basis at the end of each reporting period.
Contract assets result when costs directly attributable to the
Significant changes in the contract assets and contract
delivery of the hardware and the implementation fees are
liabilities balances during the year are as follows:
capitalised as contract assets and released over the contract
term, thereby also deferring costs to later periods and revenue
earnt not yet invoiced.
1. Since date of acquisition of Syntec Holdings Limited on 22nd December 2021.
2. Other expenses comprise expenses relating to share option schemes, amortisation of acquired intangible assets, exceptional restructuring costs and costs from business combinations.
31 March 2022
Revenue recognised that was included in the contract liability balance at the beginning of the period
Current year billings recognised in contract liabilities
Cost of sales recognised that was included in the contract assets balance at the beginning of the period
Costs deferred in current year and unbilled revenue included in contract assets
Contract assets
£’000
Contract liabilities
£’000
-
-
2,640
1,538
6,938
4,108
-
-
Financial Statements | 82
Notes to the Financial Statements
83
Contract costs
Deferred implementation costs
Deferred hardware costs
31 March 2022
£’000
31 March 2021
£’000
1,028
510
1,538
1,698
316
2,014
Revenue by geography
UK
United States of America
Rest of the World
Total Revenue
Eckoh UK
£’000
Eckoh US
£’000
Total 2021
£’000
17,804
-
233
-
12,321
128
17,804
12,321
361
18,037
12,449
30,486
Contract costs are capitalised as ‘costs to fulfil a contract’ and are amortised when the related revenues are recognised, which are
spread evenly over the length of the contract, typically 3 years.
Transaction price allocated to the remaining performance obligations
The total amount of revenue held in contract liabilities and allocated to unsatisfied performance obligations is £9.5m (FY21: £11.3m).
We expect to recognise approximately £3.9m (FY21: £5.4m) in the next 12 months, £5.5m (FY21: £5.9m) in 1-3 years and the remainder
in 3 years or more in time.
5. Profit from operating activities
The Group’s profit from operating activities is arrived at after charging:
Employee benefits expense (note 6)
Restructuring costs (note 8)
The amount represents our best estimate of contractually committed revenues that are due to be recognised as we satisfy the
Costs relating to acquisition (note 27)
contractual performance obligations in these contracts. A large proportion of the Group’s revenue is transactional in nature or is
invoiced monthly for support and maintenance and these are not included in the contract liabilities.
Eckoh UK
£’000
Eckoh US
£’000
Total 2021
£’000
18,037
15,299
(13,022)
2,277
3,069
(792)
2,277
2,285
12,449
8,896
(7,623)
1,273
1,680
(407)
1,273
1,226
30,486
24,195
(20,645)
3,550
4,749
(1,199)
3,550
3,511
2,648
2,699
1,903
512
4,551
3,211
Amortisation of intangible assets (note 12)
Depreciation of property, plant and equipment (note 13)
Depreciation of leased assets (note 14)
Inventory recognised as an expense (note 17)
6. Employee benefits expense
Government grants receivable towards employee costs
Wages and salaries
Less: Internal development costs capitalised in the year
Amortisation of internal development costs
Social security costs
Other pension costs
Share based payments
2022
£’000
2021
£’000
14,149
14,104
866
985
1,143
680
495
11
2022
£’000
(12)
12,618
(343)
352
1,097
183
254
-
-
1,061
704
505
32
2021
£’000
(311)
12,502
(379)
327
1,235
194
536
14,149
14,104
2,565
798
3,364
The Remuneration Report on page 46 provides further details on the Directors’ emoluments. The monthly average number of people
(including Executive Directors) employed by the Group during the year was:
698
1,138
573
542
408
665
368
408
-
162
97
396
1,066
1,546
573
704
505
1,061
Technical support
Customer services
Administration and management
2022
Number
2021
Number
97
45
49
191
97
38
59
194
1. Other expenses include expenses relating to share option schemes and amortisation of acquired intangible assets.
in the year.
Excluded from the table above are 25 (2021: 23) full time equivalent casual call centre employees who cost £238,361 (2021: £305,398)
Prior period segment analysis
Segment revenue
Gross profit
Administrative expenses
Operating profit
Adjusted operating profit
Other expenses1
Operating profit
Profit before taxation
Segment assets
Trade and other receivables
Deferred tax asset
Segment liabilities
Trade and other payables
Capital expenditure
Purchase of tangible assets
Purchase of leases
Purchase of intangible assets
Depreciation and amortisation
Depreciation of property, plant & equipment
Depreciation of leased assets
Amortisation
Financial Statements | 84
Notes to the Financial Statements
85
7. Auditors’ remuneration
During the year the Group obtained the following services from the Group’s auditors at costs as detailed below:
Fees payable for the audit of the Company and Consolidated Financial Statements
Fees payable for other services:
Fees payable for the audit of the financial statements of subsidiary undertakings
Total fees payable to the Group’s auditors
2022
£’000
72
129
201
2021
£’000
39
85
124
8. Exceptional restructuring costs
The exceptional restructuring costs are presented separately as irregular costs unlikely to reoccur in the near future. The exceptional
restructuring costs of £866k have been incurred in Syntec Holdings Limited, £289k, Eckoh US £531k and Eckoh UK £46k. The Syntec
costs of £289k relate to redundancy costs and contract termination costs post acquisition. The Eckoh US costs of £577k relate to
redundancy costs for employees associated with the planned exit from the third-party Support activity.
9. Finance income and finance charges
Interest receivable
Bank interest receivable
Total
Finance expense
Bank interest payable
Lease interest payable
Total
2022
£’000
2021
£’000
6
6
48
48
2022
£’000
2021
£’000
(23)
(51)
(74)
(54)
(33)
(87)
10. Taxation
Tax recognised in profit and loss
Current tax expense
Current year
Adjustments in respect of prior periods
Deferred tax credit
Origination and reversal of temporary differences
Adjustments in respect of prior periods
Foreign exchange translation
Effect of tax rate change
Total tax charge
2022
£’000
2021
£’000
13
(3)
10
1,198
(54)
4
(415)
733
743
1
2
3
697
3
21
(7)
714
717
A charge of £592k (2021: credit of £114k) for deferred taxation in relation to share options was recognised directly in equity. The tax
charge for the year is different (2021: different) to the standard rate of corporation tax in the UK of 19% (2021: 19%). The differences
are explained below:
Continuing operations
Profit before taxation
Profit multiplied by rate of corporation tax in the UK of 19% (2021: 19%)
Additional foreign tax suffered
Effect of expenses not deductible for tax purposes
Non-taxable income
Adjustments in respect of prior periods (current and deferred)
Movement on deferred tax not recognised
Deferred tax impact of UK rate change
Impact of change in tax rate on opening deferred tax
Opening deferred tax rate change impact of share options
Impact of difference between current and deferred tax rates
Deferred tax impact of rate change on intangible assets
Deferred tax impact of share options
Tax charge for the year
2022
£’000
2,318
440
11
181
(9)
(57)
(25)
-
(119)
(296)
102
-
515
743
2021
£’000
3,511
667
1
10
(20)
5
16
45
-
-
(7)
-
717
The 2021 Finance Bill was substantively enacted on 24 May 2021. The main rate of UK corporation tax will increase from 19% to 25%
with effect from April 2023. The Group’s UK deferred tax assets and liabilities have therefore been remeasured at 25%, except to the
extent that they are expected to be realised prior to 1 April 2023.
Financial Statements | 86
Notes to the Financial Statements
87
Recognition of deferred tax assets and liabilities
Reconciliation of earnings for the purposes of adjusted basic and diluted earnings per share.
Short term timing differences
Tax losses
Property, plant and equipment
Intangible assets
Tax losses carried forward
Assets
Liabilities
Net
2022
£’000
145
1,421
223
-
1,789
2021
£’000
954
2,006
251
-
2022
£’000
-
-
(224)
(2,759)
2021
£’000
(100)
-
(182)
(14)
2022
£’000
145
1,421
(1)
(2,759)
2021
£’000
854
2,006
69
(14)
3,211
(2,983)
(296)
(1,194)
2,915
Earnings for the purposes of basic and diluted earnings per share
Taxation
Amortisation of acquired intangible assets
Expenses relating to share option schemes
Exceptional restructuring costs
Costs relating to acquisition
Adjusted profit before tax
Included in the deferred tax liability is £nil (FY21: £133k) which relates to the Company and comes from acquired deferred tax
liabilities.
Tax charge based on standard corporation tax rate of 19% (2021: 19%)
Earnings for the purposes of adjusted basic and diluted earnings per share
2022
£’000
1,575
743
751
241
866
985
5,161
(980)
4,181
2022
£’000
265,968
(2,028)
-
2021
£’000
2,794
717
663
536
-
-
4,710
(895)
3,815
2021
£’000
255,351
(1,862)
-
Denominator
Weighted average number of shares in issue in the period
Shares held by employee ownership plan
Shares held in Employee Benefit Trust
Number of shares used in calculating basic earnings per share
263,940
253,489
Dilutive effect of share options
Dilutive effect of shares for acquisition Dec 21
Dilutive effect of placing Dec 21
Number of shares used in calculating diluted earnings per share
Profit per share
Basic earnings per 0.25p share
Diluted earnings per 0.25p share
Adjusted earnings per 0.25p share
Adjusted diluted earnings per 0.25p share
20,558
7,889
18,494
310,881
9,426
-
-
262,915
2022
pence
2021
pence
0.59
0.51
1.57
1.34
1.09
1.06
1.49
1.45
Movement in deferred tax balances during the year
Balance at 1 April
Arising through a business combination
Recognised in income statement
Recognised in equity
Other – Forex
Balance at 31 March
Unrecognised deferred tax assets
2022
£’000
2,915
(2,797)
(733)
(592)
11
2021
£’000
3,515
-
(714)
114
(1,196)
2,915
There are unprovided deferred taxation assets totalling £9,538k (2021: £6,058k). These have arisen in respect of trading losses of
£2,323k (2021: £575k) and in respect of capital losses of £7,215k (2021: £5,483k). The historic trading losses have not been recognised
as they are held in Eckoh plc and Syntec Holdings Limited, both of which are non-trading Companies. Therefore, due to the
uncertainty of future taxable profits being available in these statutory entities to utilise these losses they have not been recognised.
The capital losses have not been recognised due to restrictions over their utilisation. There is no expiry date on the trading losses
or the capital losses carried forward.
11. Earnings per share
The basic and diluted earnings per share are calculated on the following profit and number of shares. Earnings for the calculation
of earnings per share is the net profit attributable to equity holders of the Company.
Earnings for the purposes of basic and diluted earnings per share
Earnings for the purposes of adjusted basic and diluted earnings per share
2022
£’000
1,575
4,181
2021
£’000
2,794
3,815
Financial Statements | 88
Notes to the Financial Statements
89
12. Intangible assets
Goodwill acquired through business combinations have been allocated to the following CGUs:
• Eckoh – UK
• Eckoh – US
• Syntec
These represent the lowest level within the Group at which Goodwill is monitored for internal management purposes.
Goodwill
31 March 2022
£’000
Goodwill
31 March 2021
£’000
31 March 2022
Market growth
rate %
31 March 2022
Discount
rate %
31 March 2021
Market growth
rate %
31 March 2021
Discount
rate %
Eckoh – UK
Eckoh – US
Syntec
Total
2,373
2,627
21,442
26,442
2,373
2,510
-
4,883
10%
20%
15%
13.9%
13.9%
12.0%
10%
20%
-
13.9%
13.9%
-
No impairment has been recorded in the current year for Eckoh
Sensitivity to the changes in assumptions
UK, Eckoh US or Syntec. The main assumptions which related
If forecast revenues fell by 70%, no impairment in the carrying
to sales volume, selling prices and cost changes, are based
values of Eckoh UK and Eckoh US would be required, and if
on recent history and expectations of future changes in the
forecast revenues for Syntec fell by 35%, no impairment in the
market. The discount rate applied to the cash flow forecasts
carrying values of Syntec would be required. In addition, if there
is based on a market participant’s pre – tax weighted average
was no further growth in either Eckoh UK, Eckoh US or Syntec,
cost of capital adjusted for the specific risks in the CGUs. Growth
no impairment in the carrying value of Eckoh UK, Eckoh US or
rate used to extrapolate beyond the plan year and terminal
Syntec would be required.
values are based upon minimum expected growth rates of the
individual businesses.
Group
Cost
At 1 April 2020
Additions
Transfer of assets
Foreign exchange
Disposals
At 31 March 2021
Additions
Additions from business combinations
Foreign exchange
Disposals
At 31 March 2022
Accumulated amortisation
At 1 April 2020
Charge for the year
Transfer of assets
Foreign exchange
At 31 March 2021
Charge for the year
Foreign exchange
At 31 March 2022
Carrying amount
At 31 March 2022
At 31 March 2021
Goodwill
£’000
Computer
software
£’000
Customer
relationships
£’000
Intellectual
property
£’000
Trade
name
£’000
Total
£’000
5,166
-
-
(283)
-
4,883
-
21,422
117
-
4,147
525
(372)
(7)
-
4,293
364
-
3
-
3,775
7,287
400
20,775
-
-
(277)
-
48
372
(42)
(2)
3,498
7,663
-
12,367
115
-
11
-
17
(3)
-
-
(29)
-
371
-
-
12
-
573
-
(638)
(2)
20,708
375
33,789
264
(3)
26,422
4,660
15,980
7,688
383
55,133
-
-
-
-
-
-
-
-
26,422
4,883
2,739
362
(273)
(7)
2,821
357
3
3,181
1,479
1,472
3,241
498
-
(267)
3,472
727
113
7,122
163
273
(40)
7,518
59
17
360
38
-
(28)
370
-
12
13,462
1,061
-
(342)
14,181
1,143
145
4,312
7,594
382
15,469
11,668
26
94
145
1
1
39,664
6,527
The Company has no intangible assets. (2021: nil).
On an annual basis an impairment review of goodwill is
undertaken to determine a value in use calculation for each
Within the intangible category of computer software in the
cash generating unit (CGU) using cashflow projections.
above table is internally developed computer software, as at 31
Management have identified the CGUs as Eckoh UK, Eckoh US
March 2022 this had a net book value of £1,441k (2021: £1,466k).
and Syntec in the current year and in the prior year Eckoh UK
Amortisation of acquired intangible assets included in the charge
forecast for the next five years for each of the CGUs, which are
for the year in the above table was £751k (2021: £663k). This is
based on the latest three-year plan approved by the Board.
made up of Customer Relationships, Intellectual Property and
Management is satisfied that the carrying value of Goodwill
Trade name, with the exception of £34k of Intellectual Property
and Other Intangible Assets are supported based on the
(2021: £36k) which relates to amortisation on self-generated
expected performance of the CGUs.
and Eckoh US. Management have performed a profitability
assets in Eckoh UK Limited. Within Intellectual Property is an
intangible asset acquired when Eckoh Omni Limited (previously
known as Klick2Contact (EU) Limited) was purchased.
Financial Statements | 90
Notes to the Financial Statements
91
13. Property, plant and equipment
14. Leases
Cost
At 1 April 2020
Additions
Foreign exchange
Disposals
At 31 March 2021
Additions
Additions from business combinations
Foreign exchange
Disposals
At 31 March 2022
Accumulated depreciation
At 1 April 2020
Charge for the year
Foreign exchange
Disposals
At 31 March 2021
Charge for the year
Foreign exchange
Disposals
At 31 March 2022
Carrying amount
At 31 March 2022
At 31 March 2021
Leasehold
improvements
£’000
Land and
buildings
£’000
Fixtures and
equipment
£’000
32
-
(3)
-
29
-
-
-
-
3,068
109
-
-
3,177
-
-
30
-
29
3,207
32
-
(3)
-
29
-
-
-
29
-
-
225
43
-
-
268
43
30
-
341
2,866
2,909
7,695
1,066
(126)
(181)
8,454
308
235
45
(350)
8,692
6,687
661
(114)
(178)
7,056
637
26
(350)
7,369
1,323
1,398
Total
£’000
10,795
1,175
(129)
(181)
11,660
308
235
75
(350)
11,928
6,944
704
(117)
(178)
7,353
680
56
(350)
7,739
4,189
4,307
The land and buildings are held by the Company, the gross book value as at 31 March 2022 was £3,207k (2021: £3,177k). The net book
value at 31 March 2021 was £2,866k (2021: £2,909k). This is the only property, plant and equipment held by the Company.
The Group enters into leases of buildings in relation to offices in the US. In addition, in the UK the Group leases equipment either in
the datacentres or in the offices.
Right-of-use assets
Cost
At 1 April 2020
Additions
Foreign exchange
Disposals
At 31 March 2021
Additions
Additions from business combinations
Foreign exchange
Disposals
At 31 March 2022
Accumulated depreciation
At 1 April 2020
Charge for the year
Foreign exchange
Disposals
At 31 March 2021
Charge for the year
Foreign exchange
Disposals
At 31 March 2022
Carrying amount
At 31 March 2022
At 31 March 2021
Buildings
£’000
Equipment
£’000
Total
£’000
220
407
(22)
-
605
-
686
28
-
549
1,139
-
(518)
1,170
-
-
-
-
769
1,546
(22)
(518)
1,775
-
686
28
-
1,319
1,170
2,489
98
96
(14)
-
180
134
13
-
327
992
425
394
409
-
(518)
285
361
-
-
646
524
885
492
505
(14)
(518)
465
495
13
-
973
1,516
1,310
In some cases, the contracts entered into by the Group include extension options which provide the Group with additional
operational flexibility. If the Group considers it reasonably certain that an extension option will be exercised the additional period is
included in the lease term.
Financial Statements | 92
Notes to the Financial Statements
93
Lease liabilities
Current
Non-current
Lease interest and expenses
Interest expense (included in finance costs)
Expenses relating to short-term leases (included in cost of goods sold and administrative expenses)
2022
£’000
609
928
1,537
2022
£’000
(51)
(17)
2021
£’000
517
825
1,342
2021
£’000
(33)
(8)
The total cash outflow for leases in 2022 was £551k (2021: £494k), made up of principle lease payments of £500k (2021: £461k) and
lease interest payments of £51k (2021: £33k).
The Company does not hold any leased assets. (2021: £nil).
15. Investments in Group companies
At 1 April 2020
Additions
At 31 March 2021
Additions
At 31 March 2022
Accumulated Impairment
At 1 April 2020, 31 March 2021
Movement in the year
At 31 March 2022
Net Book Value
At 31 March 2022
At 31 March 2021
Shares in subsidiary
undertakings
£’000
Other investments
£’000
21,232
-
21,232
30,997
52,229
(6,989)
-
(6,989)
45,240
14,243
5,607
303
5,910
479
6,389
-
-
-
6,389
5,910
Total
£’000
26,839
303
27,142
31,476
58,618
(6,989)
-
(6,989)
51,629
20,153
The Directors have assessed the carrying values of the Company’s investments and concluded that no impairment triggers exist
that would require the Company’s investments to be impaired.
Other investments represent additional investments in Eckoh UK Limited as a result of the share-based payments arrangements
in place. As the Company grants options over its shares to employees of Eckoh UK Limited, the Company records an increase in
its investment in Eckoh UK Limited, the details of which are disclosed further in note 23 of the Consolidated Financial Statements.
16. Investment in subsidiary undertakings
The Company has the following investments in subsidiaries, which are included in the Consolidated Financial Statements:
Subsidiary undertakings
Country of incorporation
Principal activities
Percentage of
share capital held
Eckoh UK Limited
Veritape Limited
England and Wales (ii)
Secure Payment & Customer Engagement Solutions
England and Wales (ii)
Non trading
Eckoh Inc
United States of America (iii)
Secure Payment Solutions & Support Solutions
100%
100%
100%
Eckoh France SAS
France (iv)
Eckoh Enterprises Limited
England and Wales (ii)
Eckoh Projects Limited
England and Wales (ii)
Avorta Limited
England and Wales (ii)
Eckoh Technologies Limited
England and Wales (ii)
Intelliplus Group Limited
England and Wales (ii)
Intelliplus Limited
England and Wales (ii)
Medius Networks Limited
England and Wales (ii)
Telford Projects Limited
England and Wales (ii)
Swwwoosh Limited
England and Wales (ii)
Non trading
100%(i)
Dormant
67% & 33%(i)
Non trading
Dormant
Dormant
Dormant
Non-Trading
Non-Trading
Dormant
Dormant
100%
100%(i)
100%(i)
100%
100%(i)
100%(i)
100%
100%(i)
100%
100%
100%
100%
100% (i)
100% (i)
100% (i)
100% (i)
100% (i)
100% (i)
Eckoh Omni Ltd
England and Wales (ii)
Cloud-based Software Provider
Syntec Holdings Limited (v)
England and Wales (ii)
Syntec Limited (v)
England and Wales (ii)
Syntec Investment Limited (v)
England and Wales (ii)
CardEasy North America Inc
United States of America (vi)
Agentcall Limited
CardEasy Limited
England and Wales (ii)
England and Wales (ii)
Response Track Limited
England and Wales (ii)
Syntec Telecom Limited
England and Wales (ii)
Synpbx Limited
England and Wales (ii)
Non-Trading
Trading
Non-Trading
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
(i) Share capital held by a subsidiary undertaking.
(iv) The registered office is Rue De La Vieille Poste Parc, Industriel et Technologique de la
(ii) The registered office is Telford House, Corner Hall, Hemel Hempstead, HP3 9HN.
Pompignane, 34000 Montpellier.
(iii) The registered office is 7172 Regional Street. #431, Dublin, California 94568.
(v)
Acquired as part of acquisition of Syntec Holdings Limited
(vi) The registered office is 12 Timber Creek Lane, Newark, New Castle 19711.
All companies hold ordinary class shares and have March year-ends, with the exception of Veritape, which has a September year
end. Information in relation to geographical operations is set out in note 4.
The subsidiary undertaking Eckoh Omni Limited (registered number: 07553916) is exempt from the Companies Act 2006 requirements
relating to the audit of their individual accounts by virtue of Section 479A of the Act as this company has guaranteed the subsidiary
company under Section 479C of the Act.
Financial Statements | 94
Notes to the Financial Statements
95
17. Inventories
Finished goods
Group
2022
£’000
268
268
2021
£’000
174
174
The Directors consider that the carrying value of the trade and
Group’s trade and other receivables. Concentrations of credit
other receivables approximate to their fair value.
risk with respect to trade receivables are limited due to working
Credit risk is the risk of financial loss to the Group if a customer
nature of the Group’s customer base. The reputable nature of
or counterparty to a financial instrument fails to meet its
the Group’s current customer base limits exposure to credit risk.
contractual obligations. Credit risk arises principally from the
capital practices of the market sector and the Group and the
The cost of inventory recognised as an expense during the year was £11k (2021: £32k). The Company does not hold any inventory
19. Cash and cash equivalents
Group
Company
(2021: £nil).
18. Trade and other receivables
Group
Company
Current assets
Trade receivables
Less: Loss allowance
Net trade receivables
Amount receivable from subsidiary undertakings
Other receivables
Prepayments and contract assets
Long-term debtor
Amount receivable from subsidiary undertakings
2022
£’000
5,056
(196)
4,860
-
852
6,571
12,283
-
-
2021
£’000
4,640
(89)
4,551
-
838
7,888
13,277
2022
£’000
2021
£’000
-
-
-
-
-
93
93
-
-
-
618
-
25
643
-
-
4,034
4,034
3,506
3,506
Trade receivables are stated after loss allowance of £196k (2021: £89k).
Included in prepayments and contract assets is £1,501k (2021: £2,085k) relating to accrued income.
Amounts receivable from subsidiary undertakings are unsecured, due in 9 years and have an interest rate of 1.35%.
No expected credit loss has been calculated for the amount receivable from subsidiary undertakings as the directors expect the
full amount to be recoverable.
Gross trade receivables - ageing
Current
1-30 days
31-60 days
61-90 days
Over 90 days
Group
Gross carrying amount
- trade receivables
Group
Expected loss rate
2022
£’000
3,703
1,082
75
13
183
2021
£’000
3,803
626
83
17
111
5,056
4,640
2022
%
0.3%
1.0%
13.9%
78.3%
84.2%
3.9%
2021
%
0.0%
0.0%
0.0%
0.0%
80.3%
1.9%
Sterling
Euro
US dollars
Floating rate
Euro
US dollars
2022
£’000
2,266
6
568
2021
£’000
10,897
24
1,785
2022
£’000
1,898
-
485
2021
£’000
4,370
-
685
2,840
12,706
2,383
5,055
Group
Company
2022
£’000
2,266
6
568
2021
£’000
10,897
24
1,785
2022
£’000
1,898
-
485
2021
£’000
4,370
-
685
2,840
12,706
2,383
5,055
Cash and cash equivalents comprise cash held by the Group. Surplus cash is placed in an interest-bearing account. The average
interest rate on the interest-bearing account during the year was 0.02% (2021: 0.04%).
The Group’s financial risk management is disclosed in note 3.
20. Trade and other payables
Trade payables
Other payables
Other taxation and social security
Amounts payable to subsidiary undertakings
Accruals and contract liabilities
Group
Company
2022
£’000
899
508
929
-
15,950
18,286
2021
£’000
2,193
294
877
-
15,118
18,482
2022
£’000
2021
£’000
-
-
-
-
-
-
26,832
16,366
64
22
26,896
16,388
Financial Statements | 96
Notes to the Financial Statements
97
As set out in note 4, £5.5 million (FY21: £5.9 million) of the contract liabilities are due in more than one year.
Loans and borrowings
March 2020 on the loan of £1,950,000 was repaid evenly over the
In July 2016, the Group secured a bank loan with a carrying amount
remaining life of the loan and the final two quarterly repayments of
Included in accruals and contract liabilities is £4,416k (2021: £3,470k) relating to accrued income.
of £6.5 million to assist with the acquisition of Klick2Contact EU Ltd
£487,500 were made in April 2021 and July 2021.
and to repay the existing bank loan that had a balance of £3.75
All of the amounts above are payable within one year and trade payables that are more than three months’ old at the year-end
million at 31 March 2016 due over one year.
In conjunction with the acquisition of Syntec Holdings Limited, Eckoh
represent £99,000 (2021: £180,000).
The loan of £6.5 million was repayable over a period of five years.
comprises a £5.0 million overdraft and a £5.0 million Revolving
secured a new £10 million debt facility with Barclays Bank, which
Amounts payable to subsidiary undertakings are unsecured, payable on demand and interest free.
Twenty quarterly repayments of £325,000 commenced in July 2016.
Credit Facility (RCF). The RCF is for a term of three years, interest
The Group’s exposure to liquidity risk is disclosed in note 3.
21. Called up share capital and share premium account
Allotted called up and fully paid
Share type
Ordinary Shares of 0.25p each
At 1 April 2021
Shares issued under the share option schemes
Shares issued as part of placing
Shares issued as part of business combination
At 31 March 2022
Number
of shares
Nominal value
£’000
Share Premium
£’000
255,351,256
1,315,365
25,377,600
10,825,040
292,869,261
638
3
64
27
732
2,663
226
13,018
6,273
22,180
A fixed interest was payable at a rate of 1.25% per annum plus a
is 2.5% above the Bank of England base rate and there is a non-
variable base rate. In March 2020 and as a result of the COVID-19
utilisation fee of 0.88%. The overdraft is reviewed annually by the
pandemic, the Board of Directors took advantage of the ability to
bank and has an interest rate of 1.75% above the Bank of England
defer the repayment of capital under the loan as a precautionary
base rate.
measure. The Bank approved a delay to the April 2020 and July
2020 quarterly repayment of £325,000. The remaining balance in
As at 31 March 2022, there was no debt drawn under either facility.
23. Share based payments
The Eckoh plc Share Option Scheme (‘the Scheme’) was introduced
the employee must remain employed with the company and hold
in November 1999 and re-approved by the Board in the year ended
the shares within the Trust for a minimum of five years.
31 March 2018. Under the Scheme the Board can grant options over
shares in the Company to Group employees. The grant price of
The Eckoh plc Performance Share Plan (“the PSP”) was introduced
share options is the middle market quotation price as derived from
in November 2017, following approval by Shareholders at the 2018
the Daily Official List of the London Stock Exchange on the date of the
AGM. Initial Awards, at Nominal cost were granted to each of the
grant. The contractual life of an option is ten years. Options granted
Executive Directors in November 2017. Each of the PSP Initial awards
under the Scheme become exercisable subject to the share price
is subject to a Total Shareholder Return performance condition,
exceeding RPI plus 15% after the third anniversary of the grant date.
measured over a five-year performance period. Further details
Exercise of an option is subject to continued employment, with
are included in the Remuneration Committee report on page 46.
All Ordinary Shares in issue are fully paid. The holders of the
price on 14 December 2021 of 61.5 pence and a premium of 6.4
certain exceptions, as specified in the Scheme rules.
During the financial year awards have been granted to senior
Ordinary Shares are entitled to receive dividends, if declared,
per cent to Eckoh’s 60 day weighted average share price to 14
management, key employees and the Executive Directors. The PSP
and are entitled to vote at general meetings of the Company.
December 2021. The net proceeds of the Placing were used to
The Eckoh plc Enterprise Management Incentive Scheme (‘the EMI
awards granted to Management are subject to a Total Shareholder
Potential Ordinary Shares are disclosed in note 23.
part fund the Cash Consideration portion of the acquisition. In
Scheme’) was introduced in February 2007. Under the Scheme the
Return performance condition, measured over a three-year
As a result of the acquisition of 100% of the Share Capital of
in new Eckoh shares, the share price used to calculate the
employees. The grant price of share options is the middle market
Directors and two Directors from the acquisition of Syntec are
Syntec Holdings limited on 22nd December 2021, shares were
number of shares was £0.582. Costs relating to the issue of
quotation price as derived from the Daily Official List of the London
subject to both a Total Shareholder Return and Adjusted Earnings
issued as part of a Placing. The Placing price of 54 pence
shares of £622k have been deducted from the proceeds and
Stock Exchange on the date of the grant. The contractual life of an
per Share performance condition, measured over a three-year
represented a 12.2 per cent discount to Eckoh’s closing mid-
included in the share premium account.
option is ten years. Options granted under the EMI Scheme become
performance period.
addition to the cash consideration, £6.3 million was payable
Board can grant options over shares in the Company to Group
performance period, the PSP awards granted to the Executive
21. Other interest-bearing loans and borrowings
At 1 April 2021
Repaid during the year
At 31 March 2022
Bank Loans
£’000
(975)
975
-
exercisable subject to the percentage growth in earnings per
share in the three years following the year of grant being at least
The Eckoh plc 2019 US Sharesave Scheme (the “2019 Sharesave
5% (compounded) per annum. Exercise of an option is subject to
Scheme”), was approved by Shareholders at the 2019 AGM and
continued employment, subject to certain exceptions as specified
introduced to employees in December 2019. Employees who enrol
in the EMI Scheme rules. As at 31 March 2022, there were no share
in the 2019 Sharesave Scheme are granted an option to purchase
options unvested or unexercised.
up to a number of Ordinary Shares. The number is determined by
The Eckoh plc Share Incentive Plan (“the Plan”) was introduced in
account as of the exercise date by the option price. The option
September 2016. The Plan provides employees with the opportunity
price is equal to the closing price of the Ordinary Shares on the
to acquire shares in Eckoh plc. Shares are purchased on behalf
London Stock Exchange on either the (i) the date the offering period
of the employee from amounts sacrificed from their salary on a
begins, or (ii) the date of exercise, whichever results in the lowest
monthly basis and matched on a two for one basis by the company.
price per share. Any shares acquired will be held in accordance
dividing the total payroll deductions credited to the employee’s
Any shares acquired will be held in a trust in accordance with the
with the terms of the Scheme.
terms of the Plan. In order to maximise the tax benefits available,
Financial Statements | 98
Notes to the Financial Statements
99
The fair value of share options granted under the Scheme and the PSP were measured using the QCA-IRS option valuer based on
A reconciliation of option movements over the year to 31 March 2022 is shown below:
the Black-Scholes and Monte-Carlo valuation models, taking into account the terms and conditions upon which the grants were
made. The fair value per option granted and the assumptions used in the calculation are as follows:
23 Mar
2016
2 May
2016
13 Oct
2016
31 Mar
2017
21 Jun
2017
23 Nov
2017
23 Jul
2018
24 Jun
2021
10 Jan
2022
10 Mar
2022
Share price (pence)
Exercise price (pence)
No. of employees
43.50
43.50
10
43.50
38.875
43.50
38.88
1
1
39.50
39.50
9
47.50
47.50
1
51.25
37.81
63.50
50.00
43.00
-
2
-
13
-
53
-
2
-
94
Shares under option
1,350,000
500,000
400,000
2,000,000
500,000
6,000,000
635,000
2,415,000
1,940,428
7,850,000
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk free rate
Expected dividends
expressed as a
dividend yield
Fair value per option
(pence)
3
32%
10
3
0.78%
0.89%
3
31%
10
3
3
33%
10
3
3
35%
10
3
3
35%
10
3
4.33
35%
4.33
4.33
3
47%
3
3
3
30%
3
3
3
30%
3
3
3
30%
3
3
0.24%
0.56%
0.56%
0.56%
0.56%
0.56%
0.18%
0.91%
1.36%
1.03%
1.16%
1.14%
1.22%
1.14%
1.53%
0.00%
0.00%
0.00%
12.00
8.50
8.19
11.0
10.6
17.00
16.00
23.90
18.4 +
49.76
20.481
1.
Included in the Share Options granted on 10 March 2022 are 1,000,000 awards made to Directors, which have a fair value of 17.69 pence (50% TSR) and 42.76 pence (50% adjusted eps)
The expected volatility is based on historical volatility over the last three years. The expected life is the average expected period to
exercise. The risk-free rate of return is the yield on zero-coupon UK government bonds of a term consistent with assumed option life.
The fair value of share options granted under the Share Incentive Plan (SIP) was measured using the valuation model. The number
of share options in the SIP as at 31st March 2022 was 1,925,436. The charge for the year was £83k (2021: £63k)
The assumptions used in the US Sharesave Scheme fair value calculation are as follows:
Commencement date
Share price (pence)
Exercise price (pence)
Number of employees
Shares under option
Vesting period (years)
1 Dec
2019
66.00
51.85
18
52,107
2.00
1 Dec
2020
60.0
51.0
20
50,331
2.00
Share type
Outstanding at 1 April
Granted
Exercised
Lapsed
Forfeited
Outstanding at 31 March
Exercisable at 31 March
2022
2021
Number of
share options
Weighted average
exercise price
(pence)
Number of
share options
Weighted average
exercise price
(pence)
15,066,669
12,861,774
(1,762,022)
-
(548,077)
25,618,344
6,213,495
17.74
1.17
16.33
-
18.83
9.44
34.19
15,830,194
499,622
(911,672)
-
(351,445)
15,066,699
5,710,481
18.51
23.37
31.21
-
25.35
17.74
37.83
2022
Weighted average remaining life
2021
Weighted average remaining life
Range of exercise
prices (pence)
Weighted
average
exercise price
(pence)
Number
of shares
(000’s)
Expected
Contractual
Weighted
average
exercise price
(pence)
Number
of shares
(000’s)
Expected
Contractual
0 - 0.5
10.5 - 12.5
37.2 – 40.0
40.5 - 45.0
46.5 – 48.5
50.0 – 54.5
55.0 – 59.5
60.0 – 64.0
0.23
-
39.33
43.50
47.54
52.53
56.00
62.57
20,074
-
2,567
1,850
652
178
65
181
1.76
-
3.89
-
0.02
0.91
1.67
1.17
1.76
-
4.60
4.00
4.03
1.36
1.67
1.35
0.21
11.00
39.33
43.50
47.55
51.85
56.00
62.18
8,771
75
3,053
2,200
685
40
76
262
0.89
-
4.84
-
0.14
0.67
2.67
1.95
0.91
0.98
5.56
5.00
4.68
0.67
2.67
1.95
The total charge for the year relating to employee share-based payment plans was £241,000 (2021: £536,000) all of which related to
equity-settled share-based payment transactions. Included in the charge is a fair value share-based payment charge of £479,000
(2021: £303,000) offset by a release of the employer’s NI accrual due to the share price as at 31 March 2022.
24. Pension commitments
The Group operates a group personal pension scheme and, in addition, the subsidiary company Eckoh UK Limited operates a defined
contribution pension scheme. The assets of the pension schemes are held separately from those of the Group in independently
administered funds. The pension charge represents contributions payable by the Group to the funds. There were no outstanding
or proposed contributions at the balance sheet date.
Financial Statements | 100
Notes to the Financial Statements
101
25. Related party transactions
27. Business Combinations
Eckoh plc is the parent and ultimate controlling company of the Eckoh Group, the Consolidated Financial Statements of which
On 22 December 2021 the Group completed the acquisition of
Costs relating to the acquisition were £1.6 million, £0.6 million of
include the results of the subsidiary undertakings set out in note 15.
Syntec Holdings Limited for £31.0 million, through a combination
costs relating to the issue of shares have been offset against
of a cash consideration of £24.7 million with the balance
funds raised in the share premium account, the remainder £1.0
Each subsidiary is 100% owned by the Eckoh Group and is considered to be a related party.
of £6.3 million payable in new Eckoh shares. The deal was
million of costs have been expensed as incurred and treated as
There are two Directors accruing benefits under the pension scheme.
legally structured via the acquisition of 100% of the top holding
exceptional items.
company of Syntec Holdings Limited and its subsidiaries. The
legal entities within the Syntec Holdings Limited group are set
Post-acquisition results of the acquired business for the year
The aggregate Directors’ emoluments are shown in the table below.
out in note 16.
Aggregate emoluments
2022
£’000
806
806
2021
£’000
691
691
ended 31 March 2022 are included in the Group Consolidated
Financial Statements. Revenue of £1.7 million and operating
Syntec is an Ofcom-regulated UK network operator, based in
profit of £0.3 million relate to the acquired business. If the
the UK, with an extensive patent portfolio in the UK, US, EU and
acquisition of Syntec Holdings Limited had been completed on
Australia. Syntec is a provider of secure payment solutions
the first day of the financial year, revenue included for the year
(under the brand CardEasy) with additional telecom and
would have been £5.8 million and operating profit included
contact centre services provided predominantly in the UK.
would have been £1.0 million.
Further details of the Directors’ emoluments are disclosed within the Remuneration Report on page 46.
The provisional fair values of the identifiable asset and liabilities at the acquisition date are set out below:
Rented apartment
An apartment owned by a Director, Nik Philpot, is rented to Eckoh Group for use by company employees when on business. The rent
is paid on a monthly basis and was charged at comparable market rates. The expense in the year was £15,000 (2021: £15,000). The
amount outstanding to them at the end of the current year was Nil (2021: £4,098). There were no amounts written off in the current
or prior year.
26. Cash flow from operating activities
Profit for the financial year
Finance income
Finance charges
Taxation
Depreciation of property, plant and equipment
Depreciation of leased assets
Amortisation of intangible assets
Exchange differences
Expenses relating to share option schemes
Operating profit before changes in working capital and provisions
(Increase) / decrease in inventories
Decrease in trade and other receivables
Decrease in trade and other payables
Net cash generated from operating activities
2022
£’000
1,575
(6)
74
743
680
495
1,143
(95)
241
4,850
(5)
2,423
2021
£’000
2,794
(48)
87
717
704
505
1,061
522
536
6,878
138
217
(3,906)
(2,848)
3,362
4,385
Tangible assets
£’000
Satisfied by
236
Cash
Intangible assets – Customer Relationships
12,367
Shares
Right-of-use leased assets
686
Total Purchase consideration
Deferred tax asset
Stock
Debtors
Cash at bank and in hand
91
89
1,431
2,197
Net cash outflow arising on acquisition
Cash consideration
Less: cash and cash equivalent balance acquired
Creditors due within one year
(3,940)
Cash outflow from investing activities
£’000
24,697
6,300
30,997
£000
24,697
(2,197)
22,500
Creditors due after one year
Deferred tax liability
Fair value of net assets acquired
Goodwill
Total consideration
(694)
(2,888)
9,575
21,422
30,997
The goodwill of £21.4 million comprises primarily the estimated value of a combination of the cross-selling opportunities for Eckoh’s
products into Syntec’s CardEasy clients and vice versa. The goodwill also comprises the benefits that will be derived from the
combined product as set out in the Operational Review, in the section setting out the approach to ‘Syntegration’, the aim of which
is to bring the best of Eckoh and Syntec existing product and technologies together to build a unified platform and roadmap for
future new capability. The goodwill will not be deductible for tax purposes.
28. Events after the statement of financial position date
There were no events after the balance sheet date.
Financial Statements | 102
Shareholder Information
103
Shareholder information
Dealings permitted on Alternative Investment Market (AIM) of the London Stock Exchange.
Directors and Company Secretary
Joint Broker
C.J. Humphrey – Non-Executive Chairman
Canaccord Genuity Limited
D.J. Coghlan – Non-Executive Director
G.L. Millward – Non-Executive Director
N.B. Philpot – Chief Executive Officer
88 Wood Street
London, EC2V 7QR
C.G. Herbert – Chief Financial Officer and Company Secretary
Solicitor
Registered Office
Eckoh plc
Telford House
Corner Hall
Hemel Hempstead
Hertfordshire, HP3 9HN
www.eckoh.com
Registered number: 3435822
Registrar
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
Nominated Advisor and Joint Broker
Singer Capital Markets Limited
One Barthlomew Lane
London, EC2N 2AX
Mills & Reeve LLP
Botanic House
100 Hills Road
Cambridge, CB2 1PH
Banker
Barclays Bank plc
11 Bank Court
Hemel Hempstead
Hertfordshire, HP1 1BX
Independent Auditors
PricewaterhouseCoopers LLP
40 Clarendon Road
Watford
WD17 1JJ
Financial Statements |
Eckoh UK plc,
Telford House,
Corner Hall,
Hemel Hempstead,
Hertfordshire,
HP3 9HN
01442 458 300
tellmemore@eckoh.com
www.eckoh.com