Escher Group posts rise in first-half profit

Escher Group posted a rise in interim profit for the six months to the end of June.

Pre-tax profit was up 43% to $1.81m, on revenue of $12.34m, up 4% from the same period a year ago.

Adjusted earnings before interest, taxes, depreciation and amortisation were up 25% to $3.35m.

Escher said the main driver behind the increase in revenue and profitability was the transition to maintenance and support of two major customers in North America and Malaysia. It said these were key developments and large contributors to the group being able to transition towards having more predictable revenue streams.

The company added that this focus on recurring revenues is likely to be reflected in moderated growth expectations, but with much greater predictability.

The group, which provides point-of-service software for use in the postal, retail and financial industries, said recurring revenue streams now account for 47% of total revenues versus 37% in the first half of 2015.

Chief executive Liam Church said: "Our core postal business has continued to perform strongly, driven by increased recurring maintenance and support revenues as a result of last year's deployment of our software solutions in Malaysia and North America. The contract win with Vietnam Post demonstrates the continuing demand and relevance in the postal market for our highly efficient and secure Riposte platform.

“Given the quality of our pipeline and contracted revenue, we remain confident about the prospects for H2 2016."

At 1440 BST, the shares were down 4.3% to 177p.