Share Name Share Symbol Market Type Share ISIN Share Description
Eleco Plc LSE:ELCO London Ordinary Share GB0003081246 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 27.00p 26.00p 28.00p 27.00p 27.00p 27.00p 1,346 07:43:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Construction & Materials 15.3 1.0 1.6 16.9 20.21

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DateSubject
01/10/2016
09:20
Eleco Daily Update: Eleco Plc is listed in the Construction & Materials sector of the London Stock Exchange with ticker ELCO. The last closing price for Eleco was 27p.
Eleco Plc has a 4 week average price of 25.61p and a 12 week average price of 22.98p.
The 1 year high share price is 35.50p while the 1 year low share price is currently 19.75p.
There are currently 74,864,627 shares in issue and the average daily traded volume is 2,480 shares. The market capitalisation of Eleco Plc is £20,213,449.29.
21/9/2016
09:19
ansc: Interim results announced: http://uk.advfn.com/stock-market/london/eleco-ELCO/share-news/Elecosoft-PLC-Interim-Results/72487782 A snippet from the statement - Business Overview We continue to strengthen our position as an international software Group and have made considerable progress in re-branding the Group "Elecosoft". This has been very well received by both our customers and the market generally. More importantly, the re-brand has had a particularly beneficial effect on our business and image in Scandinavia, so much so that I understand that Elecosoft is now acknowledged to be the leading construction software provider in the Swedish market. Elecosoft UK has produced a strong performance in the period under review with Powerproject(R) software being used on landmark projects including the new football stadium for Tottenham Hotspur in north London, the BBC Television Centre and the redevelopment of Chelsea Barracks. We continue to seek opportunities to expand our market penetration in new territories, and during the period under review we acquired a Powerproject(R) reseller in the Netherlands, thus further strengthening our position in Benelux. We also appointed a new reseller to support sales of both Bidcon(R) and Powerproject(R) in Australia and New Zealand. In the US we hosted our inaugural US user conference in the period, which attracted 89 paying delegates. A second user conference was held in Philadelphia earlier this month. Such initiatives resulted in us receiving our first significant order for Powerproject(R) from a top 100 US main contractor. During the period, ESIGN, our interior visualisation and marketing operation, signed significant orders for its products and services from the largest US carpet tile manufacturer, the largest home improvement retailer in Germany and the largest laminate manufacturer in China and, I am given to understand, in the world. I also am very pleased to say that ESIGN has received approval from Apple of its new augmented reality mobile application, which has been very well received in the market.
19/8/2016
13:01
rathkum: Take a look at Sopheon and see how the share price has nearly quadrupled in under a year once the market woke up to its growth potential. Similar market cap to Elecosoft but lower on revenue and PBT. Elecosoft has a long way to go before it gets taken out at a much higher price. And LGW500 is advising you sell up.LOL
21/7/2016
16:50
rathkum: Thanks to Brexit it is beggars belief that the ELCO market capitalisation to historical sales ratio is now less than 1 given the current share price, tempting me yet again to add hopefully my last tranche at 20.7p. One wonders how the likes of Lombard Risk, Kalibrate,Brady etc.can command such a generous rating.
10/6/2016
21:00
rathkum: Elecosoft - Update BUSINESS DESCRIPTION Elecosoft (ELCO) is a London AIM listed software company. This software business was established in 1994 and serves the Swedish, German and United Kingdom construction industry with particular focus towards architectural, engineering and construction ("AEC"). ELCO's has software product knowledge around visualisation, CAD/design, estimation, engineering, site control, project management. The company is increasingly wrappings its software functionality into a building information modelling (BIM) products. The company's core software smarts sits in its estimation software 'Bidcon' which came out of Sweden and its Project Management software 'Asta Powerproject' from the United Kingdom. The company's competence and background around visualization, CAD/CAM software, estimating and project management lend themselves nicely to the ongoing development of the ELECO BIMCloud product. ELCO traditional markets are UK (32% of sales 2015), Sweden/Europe ex Germany (48% of sales), Germany (15% of sales) and rest of world (5% of sales) with Elecosoft Asta announcing a flagship United States reference client in 2015 with the US State Department of Transport. The company only emerged as a pure software company in 2015 after exiting other construction businesses. ELCO sell multiple software products mostly through its direct European sales teams (93% direct) while re-sellers are used in international markets (7%). The company had 178 employees in 2015 with historical revenue splits 30% initial licence fees, 48% maintenance/support and 22% services revenue. The Project Management software team is located in the UK, Visualization/3D CAD in Germany while Estimation and Engineering resides in Sweden. The Swedish business 'Consultec' includes both engineering and estimation software, with the Swedish architecture services business divested in late 2015. The calendar 2016 year will be the first full financial year that ELCO operated as a software only business, albeit it only had a small Swedish services business divested in 2015. From a distance it appears there has been quite a lot of change at the executive level with the CEO (April 2016) and Financial Director (June 2015) departing under the helm of the Executive Chairman (controls 12% of the scrip) while the ElecoSoft UK CEO was appointed Group Chief Operating Officer from April 2016. ELECOSOFT PRODUCT RANGE - by User Roles / Core Function / Product Name (s) Designers / Floor Visualization / Interiormarket, ESIGN Software (Germany)* Architects / CAD Design / Arcon Evo, o2c (Germany)* Estimators / Estimation, Project Planning / Bidcon (Sweden) Structural Engineers / Engineering / Staircon, Statcon, Framing CAM/CAM (Sweden) Site Managers / Site Control / Matrix (UK) Project Managers / Project Management / Asta Powerproject, Asta Powerproject BIM, Sitecon, ElecoM@trix (UK)* Main Contractors / Building Information Modelling (BIM) / ELECO BIMCloud (* denotes the inclusion of the above functionality) (UK) The flagship product is the Project Management software 'Asta Powerproject' with ELECO BIMCloud also offering substantial potential. The cloud product 'ELECO BIMCloud' is focused around collaboration and pulls much of the above products functionality (Project Management, 3D data compression, Cloud Functionality, Data exchange) while offering some integration with third party software (i.e. Autodesk Revit). The company believe the UK Government mandate on the use of building information modelling (BIM) systems from 2016 is providing a positive impetus in the uptake of BIMCloud. There is however some slowing in construction spend in the UK as the economy holds its breath around Brexit. Elecosoft has a strong presence in European small/mid tier construction companies and stand to benefit if their project management and BIM products can get some traction. The likes of Australian SaaS company Aconex buying German cloud and collaboration company Conject Holding GmbH at 2.7 times EV/Historical Sales may quicken the shift to pure cloud delivered building software and pressure Elecosoft. We also saw Oracle buy construction billing SaaS company Textura on 6.7 times EV/Historical Sales which highlights the current listed markets are rewarding pure cloud software business models. ELECOSOFT BRAG SHEET 90 the top 100 contractors/builders in the UK use Elecosoft. 49 from the top 100 building companies in Europe use Elecosoft. 14 of the leading construction companies in Germany use Elecosoft. Asta Power Project voted best project management and planning software at the 2014 and 2015 UK Construction Computing Awards. ESIGN software GmbH 'FloorMarket' product used by 70% manufacturers in European counties. 100,000 users of Asta Power Project ELCO argue the construction systems market is fragmented with small players unable to compete because of limited software development budgets, while larger companies don't have the depth and specialty knowledge in their applications that ELCO does. While this may be true the emergence of pure SaaS delivered project management and estimation software is a threat to Elecosoft's predominately server/desktop based technology. ELCO are bundling more of their intellectual property into their new BIM product which is where the market is heading albeit cloud native applications have distinct advantages over server and hybrid developed models. The ELCO software products look to have their architecture largely developed in the server environment so it will take time, innovation and money to properly position the company into true SaaS offering. There are some questions around Elecosoft's true commitment to consolidate their technology stack, integrate technology and move towards a pure SaaS model. 2015 SUMMARY The company 2015 revenues grew 9% in constant currency but headline growth numbers were muted by Sterling strength. The functional divisional revenues are split out below. Project management £7.50 million +11% Estimation £2.6 million (11%) Engineering £2.4 million (6%) Visualization £1.44 million (6%) CAD/Design £1.0 million (3%) Site management £0.40 million 0% In 2015 the company spent £2.3 million on software development (£2.6 million in 2014), with £0.665 million capitalized (2014 £0.553 million capitalized) and £2.0 million expensed. This equates to total software development spend as a percentage of sales of 15.1% which is about right for a software company. The flagship project management solution Astra Powerproject was the engine room for project management divisional growth of +11%. ELCO reported £1.8 million EBITDA, PBT of £1.0 million while generating £0.55 million free cash in the 2015 calendar/financial year. 2015 SOFTWARE DEVELOPMENT FOCUS Rewrite and release Arcon Evo CAD design software in 2015 New Bidcon product incorporating functionality from number of legacy products (2015/2016) Continue to develop BIMCloud functionality Look for software integration opportunities 2016 SOFTWARE DEVELOPMENT FOCUS Sitecon development Integration between Elecosoft applications (Big Push) VALUATION DISCUSSION ELCO has circa 75 million shares on issue so using the current 24p share price, the company is capitalized at £18.0 million pounds, while generating 2015 sales of £15.26 million. The ELCO market capitalization to historical sales ratio is 1.18 times. The company had net debt of £0.44 million at 31 December 2015, giving an enterprise value (EV) of £18.44 million and an EV/Historical Revenues ratio of 1.20 times. The historical EV/Recurring revenues (2015 maintenance revenue = £7.28 million) ratio was 2.54 times. The company generated EBITDA and operating profit of £1.8 and £1.0 million in 2015, which places the company on historical EV/EBITDA and an EV/EBIT multiples of 10.2 and 18.4 times respectively. The company guided they expect significant revenue and profit growth in 2016. ELCO subsequently updated the market in May 2016, that revenues for the 4 months to the end of April 2016 were +10% against the corresponding period in 2015. This suggests EV/Revenues for 2016 could now be sitting around 1.1 times. The opportunity for optimistic investors is Elecosoft can grow its revenues at 10% plus for the next few years, which gets the company on the road to revenues of £20 million and EBITDA of £4 million (20% operating margins). Investors could easily ascribe an EV/EBITDA multiple of 12.5 times to any globally focussed software company earnings suggesting a share price of 67p is achievable within 1-2 years. In the meantime with balance sheet repair having largely occurred investors can expect dividends to restart and move towards 1p or 4% yield conceivable in 1-2 years. The downside is pure-play SaaS construction software dominate the market superseding traditional software vendors in an environment where Elecosoft lacks Board/Management stability with question marks around the software development and technology road-map. http://australiansmall-capcompanies.blogspot.co.uk/2016/06/elecosoft-update.html?view=sidebar
19/4/2016
17:20
ansc: I agree with your interpretation regarding today's sells, rathkum, as the shock of reading Nick Caw's departure gave me serious food for thought last night; until my chat with JK this morning, I had given a lot of thought as to my next move. Even John mused that the announcement could probably have been handled better. With the cloud lifted, I have no qualms about staying put. Eps grew by 38% last year and I can envisage at least 50% growth being achievable in 2016. With a prospective eps of at least 1.6p for 2016, the current share price of 25p is far too cheap (imv). I always felt that finnCap's target price of 35p last year was a bit fanciful but I'll willingly go along with that figure now. Looking forward to the AGM [26th May].
19/4/2016
15:44
rathkum: ansc - I felt the results announcement yesterday merited a small rise in the share price. It appears some investors felt uncomfortable and rightly so with Nick Caw's departure guessing as to the nature of his departure, hence a fair number of sells. Good of John to clear the uncertainty.
15/2/2016
11:29
chrisdgb: I see finncap have maintained their 35p share price target....
14/1/2016
22:31
rathkum: I wish you the same ansc. Here's hoping for a prosperous year for Elecosoft. Here's an progress update from the article I posted way back in the summer. Going Global - 2015 Progress Update We went through the exercise sometime back of reviewing the 100 micro-cap companies listed in the UK, categorized under the Software and Computer Services sector and over 200 similar companies listed on the NASDAQ in the United States. We also looked at select micro and small cap listed software companies in Europe and Asia. We are looking for companies that are taking their software/systems/smart hardware to the global stage, so we are really looking for classical growth companies, which have quite strong underlying business models. This strength in the business model in early stage companies typically takes the form of enterprise value to sales at less than 2 times and enterprise value to recurring revenues at less than 3 times. As companies matures their enterprise value to sales and enterprise to EBITDA ratios starts heading towards 3 and 12 times respectively and the Price to Earnings ratio falls to 20 times or less. We have boiled down the few hundred companies to just 10 names which have attractive investment characteristics in our opinion. This number fell to 9 after Cimatron (NASDAQ: CIMT) received a takeover offer from 3D Systems (NYSE: DDD) at a 50 percent premium to the price it was trading at when we started covering the company. We will be looking to build this list going forward. The key FINANCIAL METRICS we look for in these early stage nano-cap and micro-cap companies include: (I) Enterprise Value/Sales metrics less than 2 times (II) Enterprise Value/Recurring Revenue less than 3 times (III) High levels of investment in software development at more than 15 percent of sales These traits indicate management are building sustainable businesses with some inbuilt ability to manage the bumps on the road that come with all small companies. We also want to see intellectual property and know-how investment as this is the only way a company will ultimately compete on the international stage. We accept investors are making small leaps of faith from time to time and in all likelihood not all these company's will fire. The ideal companies exhibit quite of a few of the QUALITATIVE TRAITS in our opinion and there really is no perfect combination, rather we like to see a high concentration of the following characteristics. 1.Domain knowledge, innovation, decent R and D (greater than 15% of sales). 2.Cashflow positive, or trending positively. 3.Recent Industry awards 4.Decent balance sheet, ideally with lazy cash balances, retained earnings, 5.Limited annual dilution through equity issuance to staff (less than 3 percent per year) 6.Revenue growth (higher the better). 7.High gross profit margins (gets more complicated with accounting conventions around cloud software businesses) 8.Lucrative industry settings (peers earn decent operating profit margins > 15%). 9.High percentage of recurring revenue (subscription, maintenance etc). 10.Decent client base, ideally with global revenue spread and recent client wins. 11.Good amount of executive share ownership with recent buying 12.Some youth on the Board. 13.Busy website with client interfacing activities (seminars, conference attendances, webinars, case studies). 14.Set-backs are explainable and addressable. 15.Open and transparent company. Elecosoft (LSE: ELCO) trades at very acceptable ratios of 1.2 times historical sales with EV/Recurring Revenues a similarly attractive metric of 3.1 times. On first glance the building software appears to cover the wide space of estimation, visualization, project management, CAD/CAM design, compression technology and the emerging area building information management (BIM). The 2014 launch of the bundled product 'ELECO BIMCloud' which incorporates much of Elecosoft's functionality has the potential to be game changing software that should benefit from 2016 regulatory changes around BIM in the UK. The company trades on an EV/EBITDA multiple of 11.3 times for 2015, albeit there is some capitalization of software development. The company's Astra Powerproject has recently won its second construction computing awards in 2015, while Elecosoft continues to refine its business strategy with its recent divestment of its Swedish architectural services business. The 2016 outlook looks pretty solid, although building software built in the cloud may have some advantages over Elecosoft's software which is primarily built around local server architecture. ................ SUMMARY There have been negative issues with these software companies in 2015, and there will always be issues with these companies in 2016, but that's small-cap investing. The likes of Elecosoft, MSG Life and Mitek Systems have moved up in share-price, while others have been stationary or drifting back a touch but nothing terminal. The US investments have benefited from a strong USD. The names which appear to have some sort of positive top-line or current growth momentum include Elecosoft, Kalibrate, Mitek Systems. The names that rank well in 2015 from a qualitative (see 1-14 points above) perspective include Elecosoft, Brady, Kalibrate, Mitek Systems and QAD Inc. The poor ranking names include Daktronics and Top Image Systems. The decent value names include Kalibrate, MSG Life and QAD inc, with Elecosoft and Brady looking ok. Takeover candidates include Brady, Kalibrate, Lombard Risk, QAD, Top Image Systems. The names that are struggling from a trading perspective in 2015 include Brady, Daktronics, QAD inc and Top Image Systems.
19/8/2015
12:00
rathkum: Elecosoft in the top 8 among software companies according to this blogger. Posted Yesterday by Australian small-cap companies Going Global - Small thinking BIG We went through the exercise of reviewing the 100 micro-cap companies listed in the UK, categorized under the Software and Computer Services sector and over 200 similar companies listed on the NASDAQ in the United States. We also looked at select micro and small cap listed software companies in Europe and Asia. We are looking for companies that are taking their software/systems/smart hardware to the global stage, so we are really looking for classical growth companies, which have quite strong underlying business models. This strength in the business model in early stage companies typically takes the form of enterprise value to sales at less than 2 times and enterprise value to recurring revenues at less than 3 times. As the company matures the enterprise value to EBITDA starts heading towards 10 times and the Price to Earnings ratio falls to 20 times or below. We have boiled down the few hundred companies to just 8 names which have attractive investment characteristics in our opinion. This number fell to 7 after Cimatron (NASDAQ: CIMT) received a takeover offer from 3D Systems (NYSE: DDD) at a 50 percent premium to the price it was trading at when we first mentioned the company. The attractions we look for in these early stage nano-cap and micro-cap companies include (I) lowly Enterprise Value/Sales metrics, (II) high levels of recurring revenue and (III) high levels of investment in software development which indicates management are building sustainable businesses based around intellectual property and know-how. We accept investors are making small leaps of faith and in all likelihood not all these company's will fire. The ideal companies exhibit quite of a few of the below characteristics in our opinion and there really is no perfect combination, rather we like to see a high concentration of the following characteristics. Domain knowledge, innovation, decent R and D (~15% of sales). Cashflow positive, or trending positively. Decent balance sheet, ideally with lazy cash balances, retained earnings, limited dilution. Revenue growth (higher the better). Lucrative industry settings (peers earn decent operating profit margins). High percentage of recurring revenue (subscription, maintenance etc). Decent client base, ideally with global focus, recent client wins. Good amount of executive share ownership with recent buying, some youth on the Board. Website is busy with client interfacing activities (seminars, conference attendances, webinars). Set-backs are explainable and addressable. Open and transparent company. Elecosoft (LSE: ELCO) trades at very acceptable ratios of 1.2 times historical sales with EV/Recurring Revenues a similarly attractive metric of 3 times. On first glance the building software appears to cover the wide space of estimation, visualisation, project management, CAD/CAM design, compression technology and building information management (BIM). The 2014 launch of the bundled product 'ELECO BIMCloud' which incorporates much of this functionality has the potential to be game changing software product that should benefit from 2016 regulatory changes in the UK. The company trades on an EV/EBITDA multiple of 11.3 times for 2015, albeit there is some capitalisation of software development. Daktronics (NASDAQ: DAKT) designs, manufactures and sells computer-programmable information display systems, including massive sports screens. The $506 million capitalised company (at share price $11.57) has $80 million net cash sitting on its balance sheet, with sales of $655 million expected in the April 2016 year. Investors are looking for an EBITDA of $57.4 million leaving the company on a very reasonable EV/EBITDA multiple of 7.4 times. The price to earnings is a tad more ritzy at 21 times for 2016. The market leadership in this niche area of information displays, as well as respectable financial metrics are the attraction for investors. The £36 million capitalised UK company Kalibrate Technologies (LSE: KLBT) trades on an EV/Sales metric of 1.6 times for 2015, with its most compelling investment metric being its EV/Recurring revenue ratio of just 2.5 times. The fully taxed 2015 price to earnings ratio at 20.6 times is pretty ritzy however. The story driving the company’s growth is pretty compelling with deregulation of fuel pricing in many countries around the world requiring more sophisticated systems to handle variable pricing strategies in petrol stations. I also like the fact the biggest source of competition are in-house developed systems, which are less likely to keep up with the functionality and compliance reporting required in today’s fuel market. I’m forecasting 10% revenue growth in 2016, with top line revenue growth one of the better facets of this company. The story is complicated by the move to cloud in its infancy, with cloud sales resulting in less immediate profit recognition, while being more profitable over the medium term. The £38 million capitalised Lombard Risk Management (LSE: LRM) sells risk management and compliance software to a blue chip client base of banks and financial institutions. Lombard’s most compelling investment feature has been its top line revenue growth which has been growing at over 19% per annum (2012-2015). The biggest detractor has been that free cashflow generation which was negative in 2015. The outflow is largely explained by the combined technology and research and development spend exceeding 35% of sales revenue, in each of the last 3 years. The investment rationale, is this large technology spend has peaked and can start falling as a percentage of sales, finally propelling the company into decent free cashflow generation in 2016 and beyond. The Founder being replaced as CEO in 2015 may signal the Board recognises the importance of cashflow generation going forward. The company trades on reasonable EV/Revenues ratio of 1.5 times for 2015 and reasonable EV/Recurring revenues ratio of 3.5 times. This name is also not without corporate appeal and historically has been involved in takeover discussions. The €72 million euro capitalised German company MSG Life (Germany:MSGL) provides software and consulting services to German life insurance companies as well as health insurance software to US companies. The company is guiding revenues of €105 million euros and EBITDA of €8 million euros in 2015. MSG Life trades on a cheap EV/Sales metric of just 0.6 times and an attractive EV/EBITDA of 8.4 times. The company even trades a respectable Price to Earnings ratio of 13.1 times for 2015. The EV/Recurring maintenance revenue is 4.3 times which is on the more expensive side of the software companies mentioned in this article. One of the downsides for MSG Life is the company has a very poor historical track record of profit delivery. QAD Inc (NASDAQ: QADA) provides enterprise resource planning software to manufacturers globally. The most compelling feature for investors is this husband and wife run software company, trades on an EV/Sales ratio of circa 1.2 times for 2016. The other compelling investment metric for QAD is its EV/Recurring revenue sits at 2.1 times. While these metrics are very attractive for a software company the price to earnings multiple for the same year at 31.1 times is pretty ritzy. The company is capitalised at around $475 million USD (QADA share price = $26.44, QADA share price =$21.50) and is covered by 5 brokers in the US. The investment rationale here is QAD can raise its EBIT/Sales margins from a miserable 6.2% (2015) to something approaching 15% in future years. The speed the company can normalise its operating margins towards peer margins will determine how quickly shareholders will get rewarded. The company currently has around $105 million net cash on its balance sheet post its recent capital raise with an acquisition likely to be additive to earnings. The $63 million USD capitalised Top Image Systems (NASDAQ: TISA) provides document capture software, enabling business to efficiently extract data from paper documents, email, mobile, and computerise the data, routing it to the appropriate area within the enterprise. The company’s mobile imaging technology gives it the ability to sell the software on a per usage basis in what should be a booming mobile market for data capture. Top Image Systems trades on very reasonable EV/Sales metrics of 1.4 times for 2015 which is its most compelling investment metric. After the recent acquisition of cloud based documents management company ‘eGistics̵7; around half the company’s income is now recurring in nature with its EV/Recurring revenues a healthy 2.6 times. The company is profitable with medium term guidance being EBITDA/Sales margins are heading towards 15%. The investment rationale is the combination of 10-15% organic revenue growth and a more scalable business model should result in operating profit margins strengthening and shareholders rewarded. Elecosoft (ELCO) - Software for the construction industry BUSINESS DESCRIPTION Elecosoft (ELCO) is a London AIM listed integrated software and services company. This software business was established in 1994 and largely serves the Swedish, German and United Kingdom construction industry or more particularly the architectural, engineering and construction ("AEC") sectors. ELCO's software business is focused on visualisation, CAD/design, estimation, engineering, site control, project management and going forward this will be wrapped up into a building information modelling or BIM product. The company's core software smarts sits in its estimation software 'Bidcon' which came out of Sweden and its Project Management software 'Asta Powerproject' from the United Kingdom. The company's competence and background around visualization, CAD/CAM software, estimating and project management lend themselves nicely to the 2014 launch of their ELECO BIMCloud product. ELCO's traditional 'home markets' are UK (26% of sales 2014), Sweden (48% of sales), Germany (15% of sales) and rest of world (11% of sales in 2014) although Elecosoft Asta project management software recently landed a decent reference client in the USA (US State Department of Transport). The company only emerged as a pure-play in 2014, after a number of very difficult trading years. ELCO sell multiple products mostly though their direct European sales teams (sales 95% direct) while using resellers for other international markets. The company had 186 employees as at 31 December 2014 with historical revenue splits 24% initial licence fees, 45% maintenance and 31% services. The project management teams are located in the UK, visualisation and 3D CAD Germany while estimation and engineering are based in Sweden. The Swedish business 'Consultec' includes both engineering and estimation software as well as architecture services (modern timbers), Design services (buildings), Estimating services (ventilation and electrical), and construction services (industrial buildings). The Consultec website raises the point that by providing distinct building services in Sweden this makes them better placed to provide relevant software to the industry. Consultec has circa 90 employees with revenues declining from £8.3 to £7.9 million in 2014 with ELCO subsequently restructuring this business. The calendar 2014 year was the first financial year that ELCO operated as a software only company albeit there was a fair bit still happening. The company changed banks, employed a new CEO and CFO (who has since left) and raised fresh equity capital (priced at 20.75p). The CEO ran the software business of ELCO between 2005-2007 and returned to the company from Microsoft in mid 2014. The flagship product is the project manager software 'Asta Powerproject' with ELECO BIMCloud launched in 2014, also offering potential. ELCO's software product range is closely aligned to many of the roles undertaken in typical construction projects. ELECOSOFT PRODUCT RANGE - by User Roles / Core Function / Product Name (s) Designers / Visualization / Interiormarket, ESIGN Software (Germany)* Architects / CAD Design / Arcon Evo, o2c (Germany)* Estimators / Estimation, Project Planning / Bidcon (Sweden) Structural Engineers / Engineering / Staircon, Statcon, Framing CAM/CAM (Sweden) Site Managers / Site Control / Matrix (UK) Project Managers / Project Management / Asta Powerproject, Sitecon, ElecoM@trix (UK)* Main Contractors / Building Information Modelling (BIM) / ELECO BIMCloud (* denotes the inclusion of the above functionality) (UK) The company launched cloud product 'ELECO BIMCloud' at the end of 2014 which is focused around collaboration and pulls much of the above products functionality (Project Management, 3D data compression, Cloud Functionality, Data exchange) while offering some integration with third party software (i.e. Autodesk Revit). The company believe the UK Government mandate on the use of building information modelling (BIM) systems from 2016 should provide a positive impetus in the uptake of BIMCloud. The company has a reasonable presence in Europe as the below brag sheet suggests so legitimately do stand to benefit especially if BIM is more widely mandated. ELECOSOFT BRAG SHEET 69 from the top 75 contractors in the UK use Elecosoft. 20 from the top 22 contractors in Sweden use Elecosoft. 14 of the leading construction companies in Germany use Elecosoft. Asta Power Project voted best project management and planning software at the 2014 UK Construction Computing Awards. ESIGN software GmbH 'FloorMarket' product used by 42 manufacturers in 9 European counties. 100,000 users of Asta Power Project ELCO argue the construction systems market is fragmented with small players unable to compete because of limited software development budgets, while larger companies don't have the depth and specialty knowledge in their applications. ELCO are bundling more of their intellectual property into their new BIM product. The ELCO software products look to have their architecture largely developed in the server environment so it will take time and money to properly position them into the cloud or a SaaS product. In 2014 the company spent £2.6 million on software development, with £0.55 million capitalised (2013 £0.4 million capitalised) and £2.05 million expensed. This equates to software development spend as a percentage of sales of 15.8%. CURRENT SOFTWARE DEVELOPMENT FOCUS Rewrite and release Arcon Evo CAD design software in 2015 New Bidcon product incoporating functionality from number of legacy products (2015/2016) Continue to develop BIMCloud functionality Look for software integration opportunities VALUATION DISCUSSION ELCO has circa 75 million shares on issue so at the current 25p share price, the company is capitalized at £18.75 million pounds, while generating sales of £16.5 million in 2014. The capitalisation to historical sales ratio was 1.15 times. The company had net debt of £1.6 million at 31 December 2014, giving an enterprise value (EV) of £20.4 million and an EV/Historical Sales ratio of 1.25 times. The EV/Recurring revenues (2014 maintenance revenue = £7.35 million) ratio was 2.8 times. The company generated EBITDA and operating profit of £1.5 and £0.9 million in 2014, which places the company on an EV/EBITDA and an EV/EBIT of 13.6 and 22.7 times respectively. The flagship product Asta Power Project grew revenues double digit in 2014, with the Power Project and BIMCloud product expected to be the strongest growing products going forward. Asta - Deeper Dive The UK business accounted for 26% of sales in 2014 or circa £4.3 million. Astra is the fastest growing of Elecosoft's software applications and recorded a decent US sales to the US State Department of Transport through a re-seller. Its also Asta PowerProject that forms the basis of the BIM cloud which has decent growth expectations in 2016 and 2017. BIM came to market in late 2014 Everything linked to architecture design models. 70 BIM providers in the market globally. 100,000 users globally use AstaPowerProject. Makes the design models available over consumer technology Designed to IFC standards (Industry Foundation Class) - Current version is IFC4. UK leader in BIM (Business Informational Modeling) Asta PowerProject is a Planning tool (US call them scheduling tools) Asta PowerProject has dash boards, which is a summation of projects. Works with AutoDesk Revit, ArchiCAD, VectorWorks, Sketchup,Tekla Asta are Learning themselves and evolving. Lots to be gained by collaboration. UK is taking the lead in the adoption of BIM which is changing the way projects are delivered. "Scheduling software in PowerProject is tried and tested, and combined with 3D functionality its an obvious marriage" [Client comment]. Can link to third party price data bases.
03/7/2015
12:13
ansc: Seeing as you do not appear to have had the courage to speak to ELCO's chairman yourself on this matter, I've spoken to him myself. All I will say is that none of your four suppositions above are correct. If you are that concerned about the possibility of the company's share price collapsing for whatever reason, why not take the obvious route for peace of mind by disposing of your holding. I feel sure the share price would not collapse if you chose to do so.
Eleco share price data is direct from the London Stock Exchange
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