Eleco Public Share Discussion Threads

[chrisdgb] 05/4/2016 08:34

Doesn't seem to be much stock around...could get squeezy on good results.

[chrisdgb] 04/4/2016 08:00

Looking forward to these final results, should get us back towards the 30p mark..

[ansc] 03/3/2016 12:10

Thanks, rathkum, a great spot. I'm itching a buy a few more at this ridiculous price but 'my cup runneth over' already. Sub 22.0p, however, and I won't be able to resist!

[rathkum] 24/2/2016 09:12

Had level 2 until last year but discontinued as my portfolio has been whittled down to just a handful of stocks.

[ansc] 19/2/2016 10:08

chrisdgb: finnCap have confirmed that there has not been any recent reiteration of their 35p target price [which followed their appointment as ELCO's NOMAD last year].

I agree, rathkum, most encouraging seeing as the company is one of the front-runners in respect of BIM. However, we both know that their share price is usually news driven (the recent 'Midas' spike!) so, with the annual results announcement likely to be the next newsworthy event - last year on 5th May but hopefully slightly earlier this year - I'll be sitting on my hands for a couple of months; there is still a constant trickle of sellers which should keep the price in check.

o/t: Do you find it worthwhile being an ADVFN level 2 user?

[rathkum] 18/2/2016 08:52

Well spotted ansc and very encouraging. Tempted to add a few more once I receive the proceeds next month from the Interbulk takeover. Eagerly waiting for the finals after which I hope a re-rating is on the cards.

[ansc] 16/2/2016 10:30

Jason Ruddle (MD of Elecosoft UK) speaking at the EU BIM Task Group meeting - 5th February

[chrisdgb] 16/2/2016 08:19

Bloomberg state the date as 3rd February update..

[ansc] 15/2/2016 18:11

Chris: Where did you see the finnCap reiteration? I'm on their mailing list and haven't received anything recently.

[chrisdgb] 15/2/2016 11:29

I see finncap have maintained their 35p share price target....

[ansc] 12/2/2016 16:33

Bouygues UK excels with tough time-scale project using Asta Powerproject


[a long read but worth the effort]

[ansc] 03/2/2016 10:43

A good spot, rathkum. One day the market might just come to realise the potential of this seemingly well-hidden gem. Once that happens ......

[ansc] 22/1/2016 11:26

The Mingy Machs operate simply to make as much money out of naive punters as they possibly can and anyone who allows themselves to get panicked into selling because of general market sentiment shouldn't be investing in the stock market in the first place; I doubt whether we've seen the last of the lemmings entering the water just yet ..... I hope not!

[chrisdgb] 22/1/2016 09:36

Simply the wrong price for the prospects, a great example of the opportunities presented by the market falls..

[ansc] 21/1/2016 15:49

Gaining recognition; Norwood [one of the top contracting firms in the USA Mid-Atlantic region] converts to Asta Powerproject:

[ansc] 19/1/2016 19:23

Shouldn't do any harm:

Elecosoft to exhibit at the Master Investor Show 2016

[ansc] 15/1/2016 14:48

Thanks, rathkum.

I'm still as optimistic as ever for Elecosoft and they are one of just four shares I'll consider buying during 2016 as and when the opportunity arises ..... like now, had another 10k just now which, of course, got marked as a 'sale'.

As far as I'm concerned, the company has achieved a great deal during the past 24 months and are pressing on, not content to let the grass grow under their feet. I'm hoping that 2016 will turn out to be a year for consolidation and that the latter part of 2017 turns out be when the fun really starts. Management know that they are still a relative minnow swimming alongside big boys but appear to be making the right moves to change that. Have paid my money and happy to take the risk even in the current blood-bath of a market.

Fingers (and everything else!) crossed.

[rathkum] 14/1/2016 22:31

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.

[ansc] 14/1/2016 11:49

I suspect that we've got rid of some of the 'Midas tip punters', rathkum, who knew nothing about the company but once they saw the price weakening jumped ship; good riddance.

The Mingy Machs, once they could see the trend, helped these on the way by widening their spread (i.e. 23/25p) so that any buy under 24p (mine, I acted too quickly!) got recorded as a sale and panic ensued. I could do with another 20k but I'll hold fire this time just in case we get a repeat performance!

Best wishes for 2016 btw.

[rathkum] 14/1/2016 10:54

What was that all about. See the market makers have been milking us poor souls this morning.

The swines wrong footed my 5,000 & 10,000 buys yet again.

[ansc] 14/1/2016 10:00

I never thought I'd be able to buy @ 23.9999p again; marked as a 'sale' of course!

[mrpotatohead] 21/12/2015 13:35

big year ahead?

[ansc] 28/11/2015 09:02

22 October 2015

Elecosoft plc ("Elecosoft" or the "Company")

Divestment of Consultec Arkitekter & Konstruktörer AB ("CA&K")

The Board of Elecosoft announces the divestment of the architectural services component of its Swedish business, Consultec Arkitekter & Konstruktörer AB, to Tyrens AB ("Tyrens"), the international architectural consultants, for proceeds of GBP872,000 (11.1m Swedish Krona) (the "Disposal") receivable on completion of the Disposal. The Disposal of CA&K strengthens the Company's focus on construction software operations whilst providing additional working capital to pursue further growth opportunities. The Disposal is not deemed a substantial transaction pursuant to the AIM Rules.

Following the transaction Elecosoft's international operations will consist principally of software development, and software sales operations together with training and software consultancy support in its core overseas markets including Sweden, Germany, the USA and Benelux.

Elecosoft Sweden has previously collaborated with Tyrens on a number of successful software development projects and the two companies are actively exploring other opportunities to work together.

As a result of the divestment, Elecosoft will have achieved another milestone in its transformation into a specialist international software developer and provider of market leading construction software worldwide.

John Ketteley, Executive Chairman of Elecosoft, said:

"The divestment of our Swedish architectural services business to Tyrens, and our continuing collaboration with Tyrens on software projects, are consistent with our aim of establishing Elecosoft as a leading international specialist in the development and supply of construction software. We look forward to further progress as we are able to focus on our profitable core business."


24 November 2015

Elecosoft plc ("Elecosoft")

Elecosoft UK wins 'Project Management/Planning Product of 2015' at this year's Construction Computing Awards - "The Hammers"

Elecosoft announces that its market leading project management software, Asta Powerproject(R), has won the 'Project Management/Planning Product of 2015' at this year's Construction Computing Awards ceremony, also known as "The Hammers". This is the second year running that Asta Powerproject(R) has won this award.

"The Hammers" awards are open to all providers of technology, tools and solutions for the effective design, construction, maintenance and modification of commercial buildings, residential and social housing and civil engineering projects of all sizes in the UK construction industry.

Jason Ruddle, Managing Director of Elecosoft UK, commented: "Winning this award against such a strong field of global competitors for a second year in a row reflects our continued commitment to providing market leading solutions to our customers. It is testament to the skill and flair of our team of developers based at Telford and also to the valued support and collaboration which we have received during the year from the many construction companies who use Asta Powerproject."