Eckoh plc (“Eckoh” or “the Group”), the UK’s largest provider of hosted speech recognition services, reports its financial results for the year to 31 March 2007.

In July 2006 the Group announced the disposal of its entire holding in Symphony Telecom Holdings plc ("Symphony"). In this release, the discontinued operations refer to the contribution made by Symphony. The total continuing operations refer to contribution made by Speech Solutions, Client IVR and Connection Makers divisions.

Financial highlights:

• Turnover from continuing operations increased by 34% to £86.8m (2006: £64.9m)
• Adjusted profit before tax1 from continuing operations increased to £1.5m (2006: loss of £0.4m)
• Gross margin for continuing operations amounted to 14% (2006: 18%)
• Speech Solutions division revenues increased by 19% to £6.3m (2006: £5.3m) and gross margin amounted to 62% (2006: 56%)
• The Client IVR division revenues increased by 50% to £71.3m (2006: £47.7m) and gross margin amounted to 5% (2006: 6%)
• Cash and short term investment amounted to £9.6m (2006: £12.7m) following a cash outflow of £10.2m in relation to the share buyback and tender offer being offset by an inflow of £7.0m from the disposal of Symphony

Operational highlights:

Speech Solutions
• Three contracts announced today: new seven-year contract with a major UK logistics group, new three-year contract with United Utilities and a three-year contract renewal with O2
• Virtually no client churn in the year and contract terms are increasing with three-year terms and longer being typical
• Strong new business generation during the year, particularly in the second half, notable wins include AXA PPP healthcare, BAA, Parcelforce Worldwide, and BSkyB
• Significant long-term contract renewals with ATOC, Vue, and William Hill, three of the top four Speech Solutions clients

Client IVR
• Eckoh continues to be one of the largest players in the UK market
• Eckoh to invest in becoming a “best practice” provider of interactive services for media owners
• New contracts to be negotiated to reflect the market conditions and the service that Eckoh provides

Nik Philpot, Chief Executive Officer, commented today:

“In 2006 we took steps to restructure and reorganise the Group so that we could focus more of our efforts on the high margin, high growth speech solutions market. This is already paying dividends in the excellent results announced today. We have secured a number of exciting new long term contracts, retained our key existing clients and significantly improved our overall margins in this area.

The recent issues concerning the interactive television market have had a significant impact on response levels, which are currently much lower throughout the sector. Whilst these issues will inevitably reduce the revenues in our Client IVR division, the very low margin nature of these revenues means that they will have a much less significant impact on gross profits. For this activity to remain part of our core business we intend to improve our margins by negotiating new contracts with media clients and positioning ourselves as a best practice service provider.

Looking ahead, Eckoh is confident of maintaining its position as the market leader in the UK for hosted speech recognition solutions. We have entered 2007 with a strong sales pipeline that also reflects the growing maturity and opportunity in this sector. We remain committed to extending our footprint into other European territories and have the necessary resources to achieve this. The Speech Solutions business continues to be the long term focus of the Group and is where the Board believes the best value for shareholders will be realised.”

For further enquiries, please contact:

Eckoh plc 
Nik Philpot, Chief Executive Officer
Adam Moloney, Group Finance Director
Jim Hennigan, Executive Director 

www.eckoh.com
Tel: 01442 458 300
 
Corfin Communications 
Harry Chathli, Neil Thapar, Ben Hunt
Tel: 020 7929 8989
 
Seymour Pierce 
Jonathan Wright
Tel: 020 7107 8050