Esker - Robust H1; continuing to invest for growth

Esker reported revenue growth of 8% for H120, despite COVID-19 disruption. The company continued to invest in headcount during H1; while this resulted in a decline in operating profit year-on-year, Esker achieved a respectable operating margin of 11.4%. We have trimmed our revenue forecasts for FY20 and FY21 but this is outweighed by the positive effect of lower tax rates in both years. Esker’s cloud delivery model has proven resilient during the pandemic and the company expects a resumption in 15%+ revenue growth rates from FY21 as the pipeline of new business converts and volumes transacted on Esker’s platform return to more normal levels.