Escher, the postal industry point of sale software provider, has delivered a very positive H113 update following on from its strong FY12 (see Digital mail is next on the Escher growth agenda).
Revenue for the six months ended 30 June, is expected to be up 47% to $12.8m. Adjusted EBITDA profits meanwhile are expected to come at $2.4m vs. $1.9m last time. Escher is still making significant investments in new products and services, hence the dip in margin to 19% from 22% last time. Net debt meanwhile will have more than doubled to $4.6m.
Postal solutions performed strongly, with revenues increasing significantly from the four major contract wins in 2012 (see here). However Escher has also signed renewals of important maintenance and support deals, which should keep the annuity revenues flowing.
Escher is focusing its investments on the new interactive services division, which aims to offer an omni-channel platform for retailers responding to the shift in consumer buying behaviours across multiple channels and devices. This is a hot space right now with many of the large IT/BP services providers also interested. Escher is putting its investments into new business development capability and relocating its UK office to London. Owning the IP in this space puts Escher in a strong position to benefit.