Eleco Public Share Discussion Threads

[ansc] 28/3/2017 12:23

Having had a little more time to study yesterday's figures, one fact surprisingly omitted yesterday was that gross profit margins during the past year have increased (my calculation) by 55% to 11.2%. The ICON system having a beneficial effect already?

[ansc] 28/3/2017 12:12

Another extract worthy of a mention from yesterday's announcement:

Executive Chairman, John Ketteley said:

"I am pleased to report a significantly improved trading and financial performance by Elecosoft in 2016. Elecosoft is fast becoming a truly international provider of market leading construction software applications for digital construction, 5D BIM, project management, estimation, 3D architectural design, timber engineering, and visual marketing software applications. I am therefore pleased to say that the current year has started well, our financial position is strong and Elecosoft is particularly well placed post-Brexit from a trading standpoint."

In that summing-up, I can't see any reason to sell.

[smithie6] 27/3/2017 22:44

....and there lies part of the attraction to the shares imo

;-)

( added turnover should be more profitable,
& of course if they were ever to reduce their development spend then the profit jumps up)

12 months till next annual results !

[phodson28] 27/3/2017 22:36

Smithie it was 2am my time when I read the results half asleep just remember thinking the recent growth percent looked low vs profit growth percent will have a good read when I finish work...

[smithie6] 27/3/2017 20:32

..I was very happy with revenue growth...

Noting that many clients stay as clients..since happy..

Adding clients for specialist product in competitive selection processes takes time....& co. has booked good growth imo....over 20% in some regions...

& imo setting up to now have 5 execs. shows a lot of confidence...( that able to shoulder the higher bod cost etc & also keep shareholders happy with profit numbers..)

[phodson28] 27/3/2017 17:59

Not read through the results in detail, will check tonight (i am in the US on a different timezone), but on a quick read through they look good. My only slight concern was on revenue growth. The share price has held which surprised me, i thought we would track down and then recover later in the week. I think this is a good sign that the sellers on results day had there shares absorbed and we should move upwards from here over the coming weeks.

[smithie6] 27/3/2017 14:14

..ah...well done to everyone at ELCO..

[smithie6] 27/3/2017 13:54

..sp..

It jumped from 36p area to 41p ish before results...

Its holding about there....good enough for me.

Looks like a number of bed & isa or sipp trades going thru. Or reversing !

[smithie6] 27/3/2017 13:51

ansc

.."only an extract"...phew..glad you didnt post/paste it all !!

;-)

.but yes...good perf. & good possibilities

---

You have any views on having 5 execs ?
Seems a lot.
You think Ketteley is lining up to retire in coming yrs ?

[rathkum] 27/3/2017 13:42

finnCap today reaffirms its corporate investment rating on Eleco PLC [LON:ELCO] and raised its price target to 50p (from 40p).

[ansc] 27/3/2017 11:24

Also worthy of mentioning:

Balance Sheet and Cash Flow

Shareholder's equity increased to GBP9.7m, up GBP1.8m, 23% at 31 December compared to 2015.

Net borrowings, including finance leases, increased by GBP0.5m to GBP1.3m (2015: GBP0.8m) as a result of additional borrowings of GBP1.8m to complete the Icon acquisition.

Trade and other receivables increased to GBP3.7m (2015: GBP2.9m) as anticipated and in line with the growth of the Group. This represented 54 days sales outstanding compared to 48 for the prior period. Trade and other payables increased to GBP1.5m (2015: GBP1.3m) and accruals were slightly higher at GBP1.6m (2015: GBP1.4m) in line with Group activities.

Cash generated from operations amounted to GBP2.4m in the year up from GBP1.6m in 2015. Free cash flow increased to GBP1.2m compared to GBP0.7m in 2015, a continuing upward trend reflective of the Group performance overall.

[ansc] 27/3/2017 11:14

Extracted from the chairman's report, well worth reading again:

Operating Review

A strong, stable and progressive year with our wider software portfolio delivered revenue and profit growth beyond market expectations. With a new management team and renewed focus on our core strengths and strategy to grow Elecosoft as a leading provider of innovative integrated solutions we stepped out of blocks and led from the start amongst growing competition. Although we experienced some challenges and timing delays in our use of resellers this year, we continue to have our sights set on expanding through them going forward. The performance of our leading applications of Asta Powerproject(R) and Bidcon(R) within project management and estimating was outstanding, with double digit growth achieved both in the UK and Sweden which contributed to a successful year and surpassed a number of key milestones.

-- Revenue grew to GBP17.8m up from GBP15.3m
-- Profit before tax of GBP1.5m up from GBP1.0m

Our Focus on Sales Growth

With an underlining growth performance across our core revenue lines of licences, maintenance and services, the Group delivered results significantly ahead of industry sector bench marks. With a prominent influence through our direct model approach, we have proven that amongst a number of major global competitors Elecosoft is highly regarded as a provider of quality software and services. Revenue growth is pivotal to our long term strategy and with an improved performance in all graphical areas, Elecosoft is in a strong position to maintain our current momentum. A summary of revenue growth on 2015 is as follows:

-- UK revenue increased by 13%
-- Scandinavia revenue increased by 13%
-- Germany revenue increased by 29%
-- Rest of Europe increased by 22%
-- Rest of World increased by 17%

Historically, our software portfolio has centred on the PC market but with ever increasing competition and expansion into other verticals we have a growing number of SaaS product offerings that sit alongside and complement our existing applications. Through continued investment in our direct approach and through channel expansion, Elecosoft is in a strong position to maintain progressive growth over and above the broader market.

Growing International Awareness

With a wide portfolio of products that cover project management, construction site management, estimating, timber engineering, 3D design and visualisation, cloud based digital marketing and data storage solutions we have some great opportunities in reaching out to a wider audience with our integrated offering. With a continuing trend across the globe to standardise processes through common data exchanges and a collaborative approach to sharing of data, Elecosoft is strongly placed to deliver international awareness and growth.

In recent years, we have established the cross selling of our products to help deliver on local government legislations which in turn has positioned Elecosoft as a major player in the provision of 4D & 5D BIM. Our marketing teams have successfully developed and implemented promotional plans for market sector and territory growth to help drive the increased awareness out to the end client through increased use of webinars, exhibition attendance, event speaking and corporate sponsorship. With the acquisition in January of one of Asta Powerproject's Dutch resellers, we have also delivered on the plans to improve the performance of the business and also commenced the transition approach to selling more products to existing and new customers.

Our colleagues in Sweden delivered a sterling performance with the new management team that was orchestrated the previous year and also expanded their international reach by establishing new resellers in New Zealand, Canada, Finland and Denmark for Bidcon(R), Statcon(R) and Staircon(R). We have seen successful expansion within the interior market with key business wins in China and the US through our modular marketing solution for simplifying and automating databased marketing activities throughout the marketing chain.

Brand Awareness

Elecosoft is now a well-established technology organisation focused on delivering leading edge applications across multiple sectors with strong brand identity both at company and product level. The company has been very successful in leveraging the Elecosoft name into established market spaces with clear and directive marketing campaigns directed from the Group management team. Our new website now reflects a product identity through the six main disciplines of focus, these being:

Project Management

Asta Powerproject(R) has continued to gain market share within its core focus on construction and infrastructure organisations across the globe. Many leading contractors worldwide have delivered major projects utilising the project management tool and have expanded their use on growing bolt-on tools such as Asta Powerproject(R) BIM and Site Progress Mobile. The application is now available in 13 languages and continues to be enhanced based on the client feedback and industry requirements.

Estimating

Our cost estimating software Bidcon(R), remains a key part of our integrated solution selling into new and existing customers. With a strong adoption in its home market in Sweden, Bidcon(R) is now leading the way alongside Asta Powerproject(R) in providing a full 5D BIM solution to the wider audience either through our direct model or via the growing reseller channel.

CAD/Design

Our prominent position in Germany with Arcon Evo(R) and o2c(R) is maintained with continued development of the product based on customer feedback and technology advancements. This in turn is growing the product awareness and is being used to expand the use of the software into new markets through our eCommerce offering and a reseller channel.

Visualisation

Our reach into the Interiormarket through our Esign portfolio highlights the significant steps we've made in gaining 80% of the European floor manufactures who use our offering to successfully marketing their interior products through Digitalisation, Visualisation, Configuration and Product Information Management (PIM). During 2016 we've seen good progress on wider global adoption with floor manufacturers in China and the US working with our German colleagues on adopting our offering.

Engineering

Our portfolio of timber engineering applications maintain their strong market presence in the UK, Sweden, Germany and Benelux and have recently seen adoption through resellers in Canada, Finland and Denmark. With local territories demands of increased housing stock and commercial timber structures through focus on modular construction, our applications of Staircon(R), Framing and Statcon(R) serve the needs of design, manufacturing and site management processes.

Information Management

The management of information in any business is critical to gaining success and with our Marketing manager offering to the floor manufacturers which sits alongside our visualisation tools, we've seen further adoption within existing and new clients. This is assisting organisations to efficiently control multi-channel marketing from a central database and saves considerable time and expenses in the company-wide data workflow.

With the acquisition of Icon taking place in late October, the opportunity to expand its current offering outside the retail sector is a strong focus moving forward. Icon's one-stop property asset information system is a web-based building information management system that is used from concept design, through construction and fit-out to completion and management. This clearly complements our existing project management and cost estimating suite of programs and presents a great opportunity in further upselling within the existing client base across our territory bases.

Award Winning Software

Offering the best possible proposition to our customers has remained our core focus and is central to driving the growth of our software offering in both our direct markets and reseller channel. Our customers have continued to recognise the quality of our products, service and extending range of products, evidenced by the continued success of our award winning software. Asta Powerproject(R) achieved for the 3rd year in succession the Project Management/Planning Software of the Year Award at the Construction Computing Awards 2016. Recognition was also made for our cost estimating application, Bidcon(R), as this was voted runner-up in the Estimation & Valuation Software category. We believe this reflects the strengthening recognition of our consumer brand.

The retention rate of our customers is important to support our growth and this has remained in line with historical trends. We have introduced to our markets product releases across the whole software portfolio that reflect the requirements of our customers. We have seen progression in our eCommerce product offering with our CAD and visualisation 22 applications and have continuous plans to expand the reach into new territories using effective web platforms.

Outlook

2016 delivered a milestone year in revenue and profit growth and looking forward the teams within Elecosoft are excited about the future and look forward to contributing to another fruitful year both in our direct markets and growing international reach through the reseller channel network.

[smithie6] 27/3/2017 09:52

...nice results...

..step & repeat...'keep on trucking'

[ansc] 27/3/2017 09:45

Am having a problem with my wi-fi connection this morning so haven't had time to read through the whole announcement yet. Through my rose-tinted glasses, however, the first impression is that the results are pretty spectacular ..... all things considered. For the life of me, I can't understand why any investor would want to jump ship at this juncture.

A scrip issue, now there's a novelty, I haven't seen one of those for years. One other thing which struck me was the massive improvement in the financial situation.

The company broker's forecast will be interesting.

[cfro] 27/3/2017 09:27

Very quiet here Ic2, just how i like it. :-)

The Icon acquisition looks interesting and as it is has not long been acquired it is yet to make a full contribution to profits. So we have that to look forward to in the next results.

[interceptor2] 27/3/2017 08:32

A very good set of results here this morning and pleased to read that this year has started well. They did say that the Icon acquisition would be earnings enhancing this year, so it will be interesting to watch progress during the year.

Basic EPS was 1.7p which is bang on the broker estimates, but the adjusted EPS came in at 2.12p, this is a fair ratio to use because the small acquisition adjustment and director termination fees are one off in nature.

Edit, Seems our posts crossed cfro, so pleased to see that you highlight the adjusted EPS figure that is fair imo.

[cfro] 27/3/2017 08:28

Brilliant results today. Very pleased with them.

Fair to use the adjusted EPS figure of 2.1p which is 94% increase. Current trading has started well.

Some good board appointments too.

[smithie6] 26/3/2017 18:49

Phodson
..agree with you on those pts

especially
"what is the current trading/forecast for the coming year,"

I think the current share price is fully up with the turnover and profit level.....so the forecast will dictate things this week imho....fingers crossed

[phodson28] 26/3/2017 16:29

My prediction is that the share price will be volatile on Monday but settle higher by the end of the week. Clearly the market is expecting a good set of results and some of this is already priced in. Key is how good are they and what is the current trading/forecast for the coming year, as share price is reflective of future expectations more than past performance. Good luck all. P

[smithie6] 25/3/2017 19:47

Phod

...price has been rising over recent months..

My view on big trades over recent months is that big fish are adding to positions...

(Although some buyers from 25p cld be taking gteed big % quick profit before results if they know somewhere they can do the same turn again...)

..be interesting to see the share price movement on Monday....a small risk phps of buyers from 25p wanting to sell...who knows

[smithie6] 25/3/2017 19:40

...often difficult to read the tea leaves imo...

MMs can take shares ppl are selling...using the new ISDX mkt....& only show trades where ppl are buying on AIM mkt...

& then all the AIM watchers think everyone is buying..

...sadly MMs or big players can move the price or mislead the mkt in illiquid stocks (especially if they have a big sell or buy order to fill; if they dip the share price by 25% in an illiquid stk they know that many PIs will sell !)..but normally the mkt is bigger than the MMs & ppl trade at prices defined by buyers & sellers..

[phodson28] 25/3/2017 14:28

The 20k and 50k trades are a bit puzzling i see them going back in trade history, most are marked as a Y trade which is a late trade, i'm not convinced they are all sells though the price on them at the time they were executed often looks close to the mid point of the buy and ask. I am wondering whether they are linked to MM's providing liquidity to the shares rather than an individual buying or selling. Would welcome peoples thoughts...

[smithie6] 25/3/2017 13:16

Cfro
.."building a position over recent weeks"

Bloomin eck...how much wonga you got in this...or maybe I shouldnt ask ?!

[smithie6] 24/3/2017 18:39

Rathkum
..you're very welcome

;-)

---

In last few days its like we've had a divi of 2p.....twice !
;-)

---

Strange old world...sits at 36p for 2 months then pops up 4-5p in the blink of an eye with no new news...

---

A good % of trades in recent days have been bed & isa type trades imo...+ few chunky buys...but I guess everyone spotted that...(its still pretty illiquid...& likely to stay that way unless a big hldr starts unloading, unlikely imo)

[cfro] 24/3/2017 18:07

Welcome jamielein. :-)

I have been building a position here also last few weeks. would like to add further but will wait the results now Monday before deciding.