Eleco Public Share Discussion Threads

[ansc] 22/9/2021 18:59

If the ADVFN trade marks are to be believed, non-sensible price movement today - 1,779 shares purchased, 128,943 shares sold yet the share price is marked up 1p!

[virginialouise] 21/9/2021 14:19

I go along with that, but as all shares seem to be snapped up and have been for sometime, is someone stake building? In any case it seems very interesting and exciting.

[ansc] 20/9/2021 11:11

In my book, always reassuring to read that directors have purchased shares in their company especially when following a promising trading update which accompanied sparkling interim figures.

[virginialouise] 20/9/2021 07:52

It's not before time that the Chairman became a shareholder!

[brummy_git] 20/9/2021 07:43

Very encouraging news to see the exec Chairman Serena Lang (£100k worth) & CEO Jonathan Hunter (£15k) both buying shares last week in leading buildtech software developer Elecosoft - after Wednesday's excellent H1 results.

[brummy_git] 17/9/2021 15:46

2 great update interviews here on Eleco

Hit the bottom of the 2 'red play' buttons
www.voxmarkets.co.uk/articles/stocks-to-follow-with-justin-waite-and-paul-hill-7c37ed7

www.youtube.com/watch?v=jA4Zdcrm18M&t=1s

[ansc] 17/9/2021 07:29

Yesterday, according to ADVFN trades marked, 4,159 more shares were sold than bought and the share price dropped c.9p. Using that same 'formula', if I buy another 4,159 shares today, will the share price go back up 9p?

(lol)

[illiswilgig] 16/9/2021 11:38

??

As I said I took it out of context. Not sure this market cares too much why. Quite capricious at the moment.

The previous para gives the context.

'the company is moving towards a SaaS subscription model for many new customers. Inevitably, this will soften revenues and profits in the short term as revenues are spread over a longer period of time and costs are added to drive growth. However, the shift will drive growth in customer lifetime value, lower customer acquisition costs and increase our recurring revenues as we move away from a perpetual licensing model.'

short term holders will not want to wait 18 months. The opportunity cost is too great. Better to chase something else..... Darktrace, Kape and so on.....?

The statement is the glass half empty cautious view from the company. Alternatively they may sign up a few more customers than expected and reduction in margin (profitability) is lower or more temporary than expected.

But given the amount of re-arranging of deck-chairs going on and the costs of increased direct sales teams, I think that they are right to be cautious.

I do think they are taking the right steps. Their US sales do not appear to have been impressive through 'partner' resellers. I can't see a breakthrough in the current model - the direct sales approach may well yield higher sales and higher margin but at increased upfront cost and with execution risk.

I like the operational team - but the board I have found less than impressive since JBK left. I hope the new team works out. I sold a few bought in the last year - but my core holding (accumulated since 2005) I will continue hold and watch with interest,

cheers

[smithie6] 16/9/2021 11:13

'We therefore expect a temporary reduction in our level of profitability over the next 18 months '

because of ??

[ansc] 15/9/2021 12:57

Agreed, their outlook (which is all that matters to me) continues to make them a long-term hold for me.

[illiswilgig] 15/9/2021 11:35

always an element of sell on the day. Those who bought in anticipation a few weeks ago have done well. If there is no immediate upside why not sell and move on. Not my style of investing though.

Also in the outlook statement was this gem

'We therefore expect a temporary reduction in our level of profitability over the next 18 months '

I've deliberately taken it out of context - as others will do. I do wish that had been worded differently or that companies would give a figure rather than hiding behind a vague statement.

cheers

[edmonda] 15/9/2021 10:20

#ELCO H2 has started well, albeit as the company aggressively transitions from perpetual licensing (23.5% of H1’21 turnover, up 8% vs H1’19) to recurring revenues (55%, and +10% vs H1’19), this will inevitably temper top and bottom line progression. It will involve longer sales recognition and greater upfront investment (all self-funded) in order to later reap the rewards of predictable and more profitable income streams (eg SaaS). By switching from a product-led to a customer centric organisation, we believe this perfectly positions the group to flourish in the new cloud & digital age.

We think the Board is doing all the right things - and have raised our valuation from 135p to 150p/share, thanks to the improved earnings visibility, CLVs and the risk/reward profile.

Moreover the stock trades at a considerable discount to peers, on 4.1x 2021 EV/revenues and 17.5x EV/EBITDA compared to 9.7x and 28.5x for the sector. Eventually this gap should close, which over a 3-5 year period, could (in theory) propel the price substantially higher.

[brummy_git] 15/9/2021 10:09

Leading Buildtech software firm Elecosoft posted terrific H1 numbers today.

In this fascinating interview, CEO Jonathan Hunter takes me through the company’s compelling ‘growth’ strategy alongside the numerous exciting opportunities ahead.

www.linkedin.com/posts/paul-hill-a5994116_eleco-plc-interim-results-interview-14-activity-6843832264988639232-xA4G

[petewy] 15/9/2021 09:30

Revenue up 13 per cent to £13,831,000 (2020 H1: £12,215,000); up 12 per cent at constant currencies
Recurring revenues increased 8% to £7,543,000 (2020 H1: £6,953,000) (includes maintenance, support, subscription and SaaS revenue)
Adjusted EBITDA* up 11 per cent to £3,649,000 (2020 H1: £3,283,000)
Operating profit up 14 per cent to £2,366,000 (2020 H1: £2,071,000)

results look healthy. Why the drop in price?

[chrisdgb] 14/9/2021 15:29

Hoping for some nice results tomorrow and fascinating to hear the growth plans....

[thelongandtheshortandthetall] 05/9/2021 21:18

^^beautiful 5yr chart.

[thelongandtheshortandthetall] 03/9/2021 19:56

ansc. Very good hold 22yrs!

QTX market cap £234m profit before tax 5-6m
ELCO market cap £121 profit before tax 4-5m

QTX is a high quality operation but I don't see why ELCO can't get there too. Maybe next year ELCO could be £200m.

[ansc] 03/9/2021 18:44

You're welcome, petewy, the thread acts as a useful diary for me as well. ELCO has been by far my best investment ever (spanning 22 years) and, with their promising prospects, will remain as my core portfolio holding for a while longer.

[petewy] 03/9/2021 16:31

Thanks for this board ansc. I bought in at about f0ur years ago and have monitored it thru this board since.

[ansc] 03/9/2021 14:10

It was a bit of a struggle but hopefully this diary data is now up-to-date so any potential new ELCO investor wont have too much hassle doing research ... all newcomers are very welcome!

[thelongandtheshortandthetall] 03/9/2021 13:09

Haha. She knew your weakness there mate👍

[brummy_git] 03/9/2021 12:31

Agreed - My wife has just used Eleco's visualisation software to buy some kitchen floor tiling online from Karndean. Really fab

[thelongandtheshortandthetall] 03/9/2021 12:12

The flooring visualisation software is very clever.
I can see that tech being as standard even in the smallest carpet/tile supply shop and they've got to buy it off someone. Might as well be Eleco.

The construction scheduling software must be incredibly sticky. Once a construction firm is signed up it must be virtually impossible to leave.
They'd need to run two systems at the same time as they transition - virtually impossible surly. Well that my thinking.

[brummy_git] 03/9/2021 12:00

That's the plan.

My guess is that the shift towards ‘all things digital’ across the construction / homebuilding industries is boosting demand for ELCO's flagship PowerProject software.

Alongside generating strong growth for its online floorings / soft-furnishings visualisation tools (ie Interiorstudio & Materialo) as consumers continue to switch more towards internet shopping for carpets, floor tiles, curtains, etc.