As per its August trading update, construction software group Elecosoft (ELCO) delivered decent top-line growth in its half-year to June. Momentum gathered further down the income statement: operating profits climbed 15.3 per cent to £1.2m and would have been higher were it not for £0.3m of acquisition-related costs. Recurring revenues also represented 55 per cent of total sales, up from 54 per cent – a small but encouraging improvement in client stickiness.
Added to this, the company enjoyed increased adoption of its Powerproject business information management (BIM) system, while the post-period-end acquisition of Shire Systems for £6.3m expands Elecosoft’s BIM software offering from early-stage project planning through to building life-cycle maintenance management. Broker finnCap expects to see full-year sales growth of 12 per cent including Shire, though it anticipates year-end net debt because of the all-cash deal.
It was also revealed that finance director Simon Morgan has resigned with immediate effect to pursue other interests, after less than a year in the job. This perhaps played a part in the shares’ mark-down on results day. Mr Morgan is replaced by Benjamin Moralee, who had been interim deputy finance director since March, and who has also held finance positions at Figleaves and Micro Focus (MCRO) subsidiary Serena Software Europe.
Analysts at FinnCap forecast adjusted pre-tax profits of £3.5m and EPS of 3.6p for 2018 (from £2.7m and 2.9p in 2017).
| ELECOSOFT (ELCO) | ||||
| ORD PRICE: | 79.5p | MARKET VALUE: | £61.9m | |
| TOUCH: | 79-80p | 12-MONTH HIGH: | 91.5p | LOW: 40.5p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 15.8p* | NET CASH: | £2.7m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 10.0 | 1.01 | 1.10 | 0.20 |
| 2018 | 10.6 | 1.18 | 1.30 | 0.28 |
| % change | +5 | +17 | +18 | +40 |
| Ex-div: | 20 Sep | |||
| Payment: | 31 Oct | |||
| *Includes intangible assets of £15m, or 19p a share | ||||
