Eleco Public Share Discussion Threads

[brummy_git] 26/4/2021 15:33

BTW, I suspect Smithie6 is a guy called Dexter Burt. He threw rocks at Eleco 2 years back, & released a big research report claiming the shares were only worth 45p.

hxxps://www.share-talk.com/dexter-burt-ciphersense-research-unique-perspective-on-micro-to-small-cap-stocks/#gs.z5rtoj

[illiswilgig] 26/4/2021 14:42

Somebodies unhappy?

RNS today to requisition a general meeting..... focusing upon the remuneration report and remuneration committee......

I am never a fan of high levels of free share handouts....so it will be interesting to see where this goes....as long as it does not interfere with the operations...but I see that the CEO and CFO are not mentioned in the rns which focuses on Ms Lang and Kevin Craig - who appear to have their snouts in the trough......?

General Meeting Requisition........

Eleco plc announces that it has received a requisition notice (the "Requisition Notice") pursuant to section 303(1) of the Companies Act 2006 ("Act") requiring that the board convenes a general meeting of shareholders for the purposes of considering and, if thought fit, approving the following resolutions, which in the case of resolutions 1 and 2 will be ordinary resolutions and, in the case of resolutions 3 and 4 will be special resolutions:

Ordinary Resolutions

1. That Kevin Craig stand for re-appointment as a director

2. That Serena Lang stand for re- appointment as a director

Special Resolutions

3. That each director of the Company shall retire from office and stand for re-appointment as a director at each annual general meeting of the Company following the date of this resolution.

4. That the Remuneration Committee Report contained within the Company's Annual Report and Accounts 2020 at pages 37-41 (inclusive) be approved.

The Requisition Notice has been delivered by JM Finn Nominees Ltd and Fiske Nominees Ltd, two of the Company's shareholders, who in aggregate hold 11.1% of the Company's voting share capital.

The Board is considering the content of the Requisition Notice, which it intends to respond to in accordance with the requirements of the Act. In the meantime, the Board would advise shareholders to take no further action at this time.

A further announcement will be made in due course.

[brummy_git] 21/4/2021 05:46

I'm staying long ELCO. Investment case is simply too strong

[thelongandtheshortandthetall] 20/4/2021 21:26

It'll come good IMO.
The drop is probably in hope of shaking out holders - well that sounds good anyway. Might be true :)

[ansc] 20/4/2021 18:38

The share price dropping like a stone over the last two days yet the Market Manipulators refused to even give me a quote (to buy 5k) online this afternoon ... ridiculous!

[ansc] 19/4/2021 18:35

12.5k shares sold today and the share price is marked down 4p, supply and demand working well once again!

[ansc] 15/4/2021 15:28

Arrived back home this morning to find the company's 2020 Annual Report on the doormat; have been a shareholder for 21 years and this one is by far the meatiest during that time ..... their first AR (I always keep my first in any company as a shareholder) contained 40 pages, this one 115!

Not being an accountant, 90% of any AR is beyond my comprehension but quickly whizzing through, one or two items caught my eye: two new names as substantial shareholders - IBIM2 Ltd (unless that's the new name of J O Capital Management who've disappeared off the list) and Tikvah Management; disappointingly, although the company has clearly enjoyed a stellar year, not one of the directors has seen fit to buy any more shares [in fact, our new 'chair' still doesn't hold any] and between them hold a measly 0.61% of the company share capital; on the other hand, 1,050,000 share options were granted to directors.

That said, I'll still be keeping hold of my shareholding

[illiswilgig] 07/4/2021 12:40

-longandshort-

I agree. The videos can be accessed via the equity development youtube channel - I just searched the terms and it came up,

I found the January21 video just with JH to be much more useful. Particularly for his obvious confidence in the opportunities and the way that the SaaS model obscures growth as short term revenue is depressed. No charisma, mind you - and maybe a little bit shy of public speaking - but he is on top of his products and market.

Whereas SL obviously thinks a lot of her abilities. Sooner she steps back to non-exec the better in my view. Though that's not to say she's not useful, with JK disappearing so swiftly in the middle of a pandemic I suspect that JH will have benefitted from a period with a 'mentor' as the MD responsibilities were added to the day job.

cheers

[thelongandtheshortandthetall] 07/4/2021 09:38

It's a two headed monster at the moment.
You could see the overlap of power positioning during the recent interview with Paul Hill. Sorry I can't post the link right now.
Personally I would like to see JH be given full authority and Elco go forward with clarity.

That aside, Eleco is a great little business. Going from strength to strength in a sector that is embracing their software wares.

[smithie6] 07/4/2021 09:31

thanks for sharing your views.

I hadn't realised that JH position was as COO. The realities & intricities of exec. chair , non-exec. chair, CEO, COO is over my head. Most cos. on AIM have 1 operating 'boss' & 1 financial 'boss' & it's not too complicated to understand.

My guess on the rationale of Kettley appointing an exec Chairperson & not a non-exec. was that he didn't want to put JH as the top exec. & that the current situation is temporary & that JH might be the top exec. once the bod sees he is up to it, with the exec. chair becoming non-exec.

[illiswilgig] 06/4/2021 16:05

Hello Smithie,

You asked my opinion.

In my opinion there is more than one way to skin a cat. (though for the avoidance of doubt - that's just what I've heard I haven't tried it myself.)

And what I am trying to say is that there is more than one way to get to the same destination. The BoD may have chosen a different route than you or I.

And none of this means that I am defending the Bod. Indeed I suspect we are not so far apart on the irritating corporate speak and the need for the company to step up a gear (or two).

Looking at the Position at the 2018 Preliminary Results - the BoD positions at issue were

John Ketteley - Executive Chairman
Serena Lang - Non-Executive Deputy Chairman
Jonathan Hunter - Chief Operating Officer (and executive director)

There was no Managing Director/CEO.

Anyway. Fastforward and on 24th September 2020 - pandemic and all - John Ketteley announced his decision to retire and stepped down with immediate effect. It's not clear why - and the pandemic will have complicated issues - but he is in his late 70's so it may well have been prompted by health issues?

Given that the Bod were meeting on Zoom - I can imagine that they saw the simplest way forward was for the non-executive deputy chairman to step up to executive chairman and replace John Ketteley pending a recruitment process and appointment of a CEO - a new post - when the chairman would become non-executive.

You and I might disagree. But we weren't there.

In the meantime, pending the recruitment process, Jonathan Hunter COO - was appointed to interim CEO, which in practice would have made not difference to his day job as COO.

Or it might be equally appropriate to consider it as a probationary period?

This achieves the same end result - and from the position of the BoD it allows appropriate corporate governance over the creation of a new board position, CEO, even though in reality he was already on the BoD as COO.

You or I might well have been more direct and appointed the COO to CEO, but that is rarely the way that a BoD works, or the Audit sub-committee. It's hard to say what the rest of tbe Bod thought - I wasn't there.


cheers

[smithie6] 06/4/2021 13:10

are we agreed that the claimed change in strategy is just false propaganda (& self trumpet blowing) from the new chairperson ?

& that the claimed new strategy is "identical" to what the strategy always was !!

----

while, yes, putting a promo video on youtube is something new
but should any chairperson being promoting the co. shares in such a rampy way, & is it allowed ?
(since cos. are reqd. imo to merely report their results to the mkt together with their hopes & risks, & are not allowed by FCA rules to recommend for a PI to buy them)

[ansc] 31/3/2021 13:03

The company broker has raised their target price to 125p (they have always tended to be conservative imo).

[smithie6] 31/3/2021 11:46

illiswilgig

- why in your opinion has the new chairperson been appointed as an exec. ?

- & why as a temp. exec. chairperson & then leaving the chairperson job & returning to be a NED ?

I don't see any explanation in any of the statements from anyone at the company ??!!

if you know then can you share that ?

(the only guess I have is that the departing exec. chairperson doesn't want the MD to be the highest ranking exec. at the co. after he has left; which to me would seem strange since the MD has been at the co. for some years & is experienced/respected imo.

I'm interested to see your opinions.)

[smithie6] 30/3/2021 19:22

why was a non-exec. appointed as an exec. chairman & not as a non-exec. chairman ?

I don't see any reasoning in your post.

as I wrote, if the co. was correctly set up by the previous bod with Kettley at its head for X years
& the current MD also at a senior position for many years

I don't understand why the bod felt an exec. chairman was needed.

AIM cos. do not have a temporary exec. chairman unless there is a rescue type situation & that isn't the situation at ELCO.

Kettley didn't trust J.Hunter (who is experienced/respected) to be the MD without an exec. chairman above them ??

------

You agree with my point that organic growth has always been lowish at ELCO ?

(& ELCO, in on-line prelim results, intentionally avoids mentioning what it is !)

You agree with my point that you can have good construction project software but getting a construction company to stop using a competitors product & switch to using your ELCO product, obviously that is very difficult. You propose any solution ?

In 2018 results I think it mentions that X% of USA construction cos. use Powerproject. And some users there of Staircon.
ELCO seems, based on the numbers, to have failed to have grown that turnover.

-------

& yes, I don't like the rampy words in the prelims from the new chair person & to me it has no value & is just them self justifying or sounding off. & their rampy words do nothing to show how growth can be achieved in USA & 'rest of the world'. (turnovers down 10% & 20% last year !).....since 2018, at least, the growth in USA hasn't happened.
(I recall a contract in mining in S.America being won but it doesn't seem to have lead to more.....& I think that the miners have kept going thru Covid, the world keep consuming copper, ally, gold, platinum, nickel etc)

[smithie6] 30/3/2021 09:23

what is the organic growth in turnover % (ie. excluding acquisitions)

close to zero ? or 0-5% ?

[smithie6] 30/3/2021 09:03

am I correct that profit is down, because they just moved more costs out of the profit calculation ?

( to call some costs 'the purchase of intangible assets')

& turnover in usa was down

----

the chairman's statement
....blah blah,
rampy rubbish imo
just self justification

so now sales people are going to try to get sales from existing customers
& the co. will try to take care of customers

uh, like they weren't doing all of that before !


in the UK the co. has been serving the sector for donkeys years & the co. has always worked hard to work closely with clients & keep 'em happy
& to meet clients developing needs

so the chairwomen's blah blah is just self justification trumpet blowing imo

..if they have take on the extra management staff they mention, then it means higher costs

----

& why have they appointed a temporary exec. chair person ?
did the previous execs & board (experienced/skilled) not have everything correctly set up ?

----

USA
ELCO is going to try to sell directly to small & medium companies
while agents/distributors will sell to big companies.
Will agents tolerate that, being bypassed ?!

the co. would like to grow sales outside of uk, Germany & Sweden.
sales in USA were ~£900k, & were down 10% !!
& ELCO has been trying to grow sales in USA for years. Clearly it hasn't happened.

There are established competitors there, like ELCO is very established in the UK, arriving from abroad & getting companies to change from using a competitor's software (which they know how to use) to using yours (which they don't know how to use) it is obviously very difficult & has "not" been happening.

Rest of world sales, £400k, down 20% from £500k.

DOWN 20% !!

Unless the sun starts rising in the west I can't see how ELCO is suddenly going to start achieving high growth in overseas markets even though the new chairman starts warbling about it as a target. Just hot air, self trumpeting. Chair person's word can be thrown in the bin imo. What the MD (J.Hunter) might say or do, that is worth noting imo.

[energeticbacker] 29/3/2021 14:42

Investor's Champion comments: the Chairman’s statement commented how the markets Eleco serves are experiencing an accelerated adoption of technology due to the pandemic, rising material costs and increased regulation. It looks well-placed to thrive.

[macc1] 29/3/2021 08:13

Morning all, here's a video with for Eleco's FY results:

[chrisdgb] 29/3/2021 08:11

Still so cheap on a global basis....

[edmonda] 29/3/2021 07:51

Clarity of thought and simplicity of message are two vital components of any strategy. This morning, together with releasing ‘in line’ 2020 results, BuildTech software developer Eleco revealed its new ‘client led’ (vs product before) growth plan. Explaining how over the next 3-5 years, it aims to not only accelerate LFL revenues towards market norms (c.10% pa), but also deliver healthy profit margins and cash conversion. Not unambitious targets considering its transition to an ARR model from 56% today (53% 2019), alongside the challenges posed by rivals Autodesk, Nemetschek & Bentley Systems.

Moreover, there are several ‘hot spots’ where the business’ software is perfectly suited. Namely data centres, smart factories, online warehouses and connected ‘Home &/or Build-to-Rent’ – often taking on the key project ‘control room’ role. In fact if successful, we think there is every chance that Eleco could actually surpass its own stretching goals in due course.

Meaning that for investors the upside potential could be significant, since little of this appears to be factored into the shares (see below), which trade on 2.9x 2021 EV/revs and 10.5x EV/EBITDA vs 9x & 26x for peers.

See our updated research below and watch an interview with the management team (30 mins):