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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Eleco Public Limited Company | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 97.00 | 96.00 | 98.00 | 97.00 | 97.00 | 97.00 | 9,523 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Computer Programming Service | 26.57M | 2.4M | 0.0291 | 33.33 | 79.83M |
From Apr 2019 to Apr 2024
TIDMELCO
RNS Number : 9421Z
Eleco PLC
24 September 2020
24 September 2020
Eleco Public Limited Company
("Eleco", the "Company" or the "Group")
Interim Results for the Six Months Ended 30 June 2020
Eleco Public Limited Company (AIM: ELCO), the AIM-listed international construction software specialist, is pleased to announce its unaudited results for the six months ended 30 June 2020.
Financial Highlights
-- Revenue down 4 per cent to GBP12,215,000 (2019 H1: GBP12,711,000); down 3 per cent at constant exchange rates
-- 57% of revenue recurring (2019 H1: 53% of revenue) -- Operating profit up 19 per cent to GBP2,071,000 (2019 H1: GBP1,746,000) -- Adjusted operating profit* up 11 per cent to GBP2,366,000 (2019 H1: GBP2,138,000) -- Profit before tax up 23 per cent to GBP1,930,000 (2019 H1: GBP1,567,000) -- Basic earnings per share up 19 per cent to 1.9p (2019 H1: 1.6p) -- Adjusted earnings per share** up 10% to 2.2p (2019 H1: 2.0p) -- Free cash flow*** up 76 per cent to GBP3,711,000 (2019 H1: GBP2,111,000) -- Net cash GBP4,435,000 (2019 H1: GBP198,000 net bank debt)
(* Adjusted profit measures exclude acquisition and corporate finance related costs and amortisation of acquired intangible assets.)
(** Adjusted earnings per share represents adjusted profit after tax, divided by a weighted average number of shares.)
(*** Free cash flow represents net cash inflow from operating activities less net cash outflow from investing activities.)
Operational Highlights
-- ShireSystem further diversified software offering to Top 4 Sectors of Food & Drink Manufacturing, Health & Social Care, Chemical & Pharmaceutical and Construction
-- Construction planning community offered complimentary Powerproject training to planners on furlough
-- Extended licence agreements to enable customers to work remotely -- Implemented full home working to maintain support for customers
-- Offered virtual training and consultancy to enable customers to maximise their use of the software
Chairman, Serena Lang said: "The challenges for the first half of the year were significant for many companies and I am pleased to report that Eleco performed creditably during these times.
Continuing successfully to address the near-term challenges that the current economic conditions present and focusing on our future growth strategy will be ever more important as we continue to recover from the impact of Covid-19.
Our excellent suite of products, loyal customer base and the strength of our Executive team and employees gives me the confidence that we will be able to continue to ride the wave of the storm and focus on the major opportunities ahead of us."
For further information, please contact: Eleco Public Limited Company Tel: +44 (0)20 7422 8000 Serena Lang, Chairman Jonathan Hunter, Interim Chief Executive Officer Ben Moralee, Group Finance Director finnCap Limited Tel: +44 (0)20 7220 0500 Geoff Nash / Kate Bannatyne (Nomad) Richard Chambers (ECM) Newgate Communications Tel: +44 (0)20 3757 6880 Elisabeth Cowell / Isabelle Smurfit elecosoft@newgatecomms.com
About Eleco Public Limited Company
Eleco plc is an AIM-listed (AIM:ELCO) specialist international provider of software and related services to the Architectural, Engineering, Construction and Owner/Operator (AECO) industries and interior furnishing industries from centres of excellence in the UK, Sweden, Germany, Netherlands and the US.
The Company's market leading, Elecosoft, software solutions are developed by teams in the United Kingdom, Sweden and Germany; and its solutions cover project management, estimating, timber engineering, CAD and visualisation, asset and facility management and cloud based digital marketing solutions.
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Chairman's Statement
John Ketteley, after 23 years in the role, has decided it is the right time for him to stand down as Executive Chairman of Eleco and hand the reins over as we report on the results for the 6 months to 30(th) June. On behalf of all our stakeholders, I would like to take this opportunity to thank John for his enormous contribution over the last 23 years in developing the Elecosoft business and delivering the profitable and growing software business we have today. We wish him all the very best for the future.
I congratulate Jonathan Hunter, our current COO, on his appointment as Interim CEO. Having worked closely with John for the last decade, Jonathan is acutely familiar with the operations and is well placed to lead the business going forward. I very much look forward to working closely with him and the Executive team over the coming months.
Eleco performed well in the first half of 2020, dealing effectively with the Covid-19 threat to its business and delivering a creditable operational and trading performance as very difficult market conditions developed in the period.
This has been made possible by the thorough planning and rapid response in dealing with the initial threat of the Covid-19 breakout by our management and I thank all our employees for adapting to their new working environment whilst continuing to provide our customers with continued excellent service. The initiatives that were taken enabled the Group to remain resilient and cash generative.
Trading Performance
Revenues
Revenues in the first half of 2020 were GBP12,215,000 (2019: GBP12,711,000), a decrease in turnover of 4 per cent; or 3 per cent at constant currencies. In my view, our sales, marketing and support colleagues are to be congratulated on their performance given the challenges affecting most of our markets in the period.
Revenues from recurring maintenance, support, and other subscription-based contracts amounted to GBP6,953,000 (2019: GBP6,763,000), equivalent to 57 per cent of total unaudited revenues (2019: 53 per cent).
Profit
Operating Profit for the period was GBP2,071,000 (2019: GBP1,746,000), an increase of 19 per cent, after crediting GBP133,000 (2019: GBPnil) relating to the UK Government's Covid-19 Job Retention Scheme and the comparable schemes in Sweden and Germany and after charging GBPnil (2019: GBP97,000) of acquisition and corporate finance related costs.
Adjusted operating profit, before charging acquisition and corporate finance related expenses GBPnil (2019: GBP97,000) and amortisation of acquired intangible assets of GBP295,000 (2019: GBP295,000) was GBP2,366,000 (2019: GBP2,138,000), representing an increase of 11 per cent that reflects the continuing strength of our core business and a strong focus on cost management during the period.
Profit before tax was GBP1,930,000 (2019: GBP1,567,000), an increase of 23 per cent.
The earnings per share for the period was 1.9 pence (2019: 1.6 pence), an increase of 19 per cent.
Software
Our software portfolio, developed by our inhouse development teams, is the lifeblood of our business. Total software development spend (both capitalised and expensed elements) in the period amounted to GBP1,623,000 (2019: GBP1,524,000) and reflect our continuing efforts to enhance our software offering to the market. Software development expenditure capitalised in the period totalled GBP760,000 (2019: GBP633,000).
Financial Performance
We worked hard to improve the Group's already strong financial position and, as at 30 June 2020, Eleco had net cash balances of GBP4,435,000 (2019: GBP198,000 net bank debt), an amount which included GBP396,000 of deferred VAT payments as allowed under HMRC guidance (2019: Nil).
Operational Highlights
While retaining existing customers, we have also noted a welcome increase in the number of new accounts that we have gained across different industries in the period. For example, ShireSystem further diversified its customer base in the UK with additions from Food & Drink Manufacturing, Health & Social Care, Chemical & Pharmaceutical and Construction.
Elecosoft supported the construction planning community during a difficult period for the industry by providing complimentary Powerproject training and temporary software licences to planners who had been placed on furlough. We also supported some of our construction customers by offering complimentary extended licence agreements to enable them to work remotely during the Covid-19 lockdown.
We held a number of well received, complimentary webinars, which dealt with construction delays, pauses and using our software to support the reopening of construction sites.
Other varied opportunities that have enabled us to provide service to our customers include:
-- ShireSystem CMMS prevented downtime for Kingspan Insulated Panels across nine sites in six countries.
-- Eleco's subsidiary ESIGN launched its new Artificial Intelligence visualisation tool at Domotex, Hanover, in January 2020.
-- Powerproject Vision aided the Carey Group to boost business visibility and control.
-- Minsur used Powerproject 4D BIM to visualise and report on complex tailings reprocessing plant construction.
-- Project planning precision enabled with Powerproject at Oxford University's Beecroft physics building.
-- John Sisk & Sons deployed Site Progress Mobile to deliver woodland cabins for Center Parcs.
Recent events have demonstrated the need for us to satisfy our customers' requirements to be able to work more remotely and our software developers and trainers are increasingly seeking opportunities to support our customers in achieving their goals in this regard.
Company Name Change
The Board made the decision to re-instate the former company name, Eleco plc. We had experienced confusion by customers and shareholders between the business brand and the subsidiaries' businesses and the Company's name. There will now be a clearer distinction between the operational activities under the Elecosoft brand, launched in 2015, and the Company itself.
Interim Dividend
Eleco's strong trading performance and cash generation in the six months to 30 June 2020, would normally have warranted the payment of an interim dividend. However, having regard to the uncertainties created by the Covid-19 pandemic, the Board has decided to not recommend an interim dividend.
Outlook
The Board believes that there is a greater need now than ever before for our customer base to adopt technology that brings innovation and efficiency. Elecosoft's suite of solutions continues to be focused on delivering improved efficiencies to our customers, thus enabling them to reduce their own and their customers' costs and project risk. The actions we have taken and the continuing availability of our software, training and services, will enable us to assist our customers to maintain the momentum of their businesses in the year ahead despite the prevailing difficulties they face.
The challenges for the first half of the year were significant for many companies and I am pleased to report that Eleco performed creditably during these times and that all affected staff have been taken off furlough and returned to full time work.
Continuing successfully to address the near-term challenges that the current economic conditions present and focusing on our future growth strategy will be ever more important as we continue to recover from the impact of Covid-19.
Our excellent suite of products, loyal customer base and the strength of our Executive team and employees gives me the confidence that we will be able to continue to ride the wave of the storm and address the major opportunities ahead of us.
Serena Lang
Chairman
24 September 2020
Condensed Consolidated Income Statement
for the financial period ended 30 June 2020
Hot Features
Premium
Six months to 30 June Year Ended
--------------------------
2020 2019 31 December
(unaudited) (unaudited) 2019
Notes GBP'000 GBP'000 GBP'000
---------------------------------- ------ ------------ ------------ ------------
Revenue 3,4 12,215 12,711 25,398
Cost of
sales (1,298) (1,319) (2,647)
Gross profit 10,917 11,392 22,751
Amortisation and impairment
of intangible assets (786) (653) (1,445)
Acquisition and corporate finance
related expenses - (97) (143)
Other selling and administrative
expenses (8,060) (8,896) (17,351)
------------------------------------ ------ ------------ ------------ ------------
Selling and administrative
expenses (8,846) (9,646) (18,939)
Operating profit 4,5 2,071 1,746 3,812
Finance income 6 - - -
Finance
cost 6 (141) (179) (339)
Profit before tax 1,930 1,567 3,473
Tax (414) (279) (772)
Profit for the
financial period 1,516 1,288 2,701
----------------------------------- ------ ------------ ------------ ------------
Attributable
to:
Equity holders
of the parent 1,516 1,288 2,701
----------------------------------- ------ ------------ ------------ ------------
Earnings per share
Basic earnings
per share 7 1.9p 1.6p 3.3p
----------------------------------- ------ ------------ ------------ ------------
Diluted earnings
per share 7 1.8p 1.6p 3.3p
----------------------------------- ------ ------------ ------------ ------------
Condensed Consolidated Statement of Comprehensive Income
for the financial period ended 30 June 2020
Six months to 30 June Year Ended
--------------------------
2020 2019 31 December
(unaudited) (unaudited) 2019
GBP'000 GBP'000 GBP'000
---------------------------------- ------------ ------------ ------------
Profit for the
period 1,516 1,288 2,701
Other comprehensive income:
Items that will be reclassified
subsequently to profit or loss:
Translation differences
on foreign operations 58 8 (51)
Other comprehensive income
net of tax 58 8 (51)
Total comprehensive income for
the period 1,574 1,296 2,650
------------------------------------- ------------ ------------ ------------
Attributable
to:
Equity holders
of the parent 1,574 1,296 2,650
----------------------------------- ------------ ------------ ------------
Condensed Consolidated Statement of Changes in Equity
for the financial period ended 30 June 2020
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
At 1 January 2020 (restated) 822 2,047 1,002 (198) (108) 14,359 17,924
Dividends - - - - - - -
Share-based payments - - - - (9) - (9)
Issue of share capital 1 15 - - - - 16
Transactions with owners 1 15 - - (9) - 7
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
Profit for the period - - - - - 1,516 1,516
Other comprehensive
income:
Exchange differences
on translation of net
investments in foreign
operations - - - 58 - - 58
Total comprehensive
income for the period - - - 58 - 1,516 1,574
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
At 30 June 2020 (unaudited) 823 2,062 1,002 (140) (117) 15,875 19,505
=============================== ========= ========= ========= ============ ========= ========== ========
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
At 1 January 2019 (restated) 818 2,049 1,004 (148) (177) 11,933 15,479
Adjustments for prior
periods (IFRS 16) - - - - - - -
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
At 1 January 2019 (restated) 818 2,049 1,004 (148) (177) 11,933 15,479
Dividends - - - - - (141) (141)
Share-based payments - - - - 12 - 12
Issue of share capital 2 - (2) - - - -
Transactions with owners 2 - (2) - 12 (141) (129)
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
Profit for the period - - - - - 1,288 1,288
Other comprehensive
income:
Exchange differences
on translation of net
investments in foreign
operations 1 - - 8 - - 9
Total comprehensive
income for the period 1 - - 8 - 1,288 1,297
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
At 30 June 2019 (restated
unaudited) 821 2,049 1,002 (140) (165) 13,080 16,647
=============================== ========= ========= ========= ============ ========= ========== ========
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
At 1 January 2019 (originally
stated) 818 2,049 1,004 (148) (177) 11,933 15,479
Adjustments for prior
periods (IFRS 16) - - - - - - -
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
At 1 January 2019 (restated) 818 2,049 1,004 (148) (177) 11,933 15,479
Dividends - - - - - (275) (275)
Share-based payments - - - - 70 - 70
Issue of share capital 4 (4) - - - - -
Transactions with owners 4 (4) - - 70 (275) (205)
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
Profit for the period - - - - - 2,701 2,701
Other comprehensive
income:
Exchange differences
on translation of net
investments in foreign
operations - - - (51) - - (51)
Other - 2 (2) 1 (1) - -
Total comprehensive
income for the period - 2 (2) (50) (1) 2,701 2,650
------------------------------- --------- --------- --------- ------------ --------- ---------- --------
At 31 December 2019
(restated) 822 2,047 1,002 (198) (108) 14,359 17,924
=============================== ========= ========= ========= ============ ========= ========== ========
Condensed Consolidated Balance Sheet
at 30 June 2020
30 June
--------------------------
2020 2019 31 December
(unaudited) (unaudited) 2019
Notes GBP'000 GBP'000 GBP'000
------------------------------- ------ ------------ ------------ ------------
Non-current assets
Goodwill 15,643 15,684 15,598
Other intangible
assets 9 7,223 7,445 7,242
Property, plant and equipment 702 821 734
Right-of-Use assets 2,033 2,151 2,048
Deferred tax assets 87 155 118
Total non-current assets 25,688 26,256 25,740
--------------------------------- ------ ------------ ------------ ------------
Current assets
Inventories 16 85 46
Trade and other receivables 3,035 3,920 4,339
Current tax assets 82 54 105
Cash and cash equivalents 9,779 6,763 7,236
Total current
assets 12,912 10,822 11,726
-------------------------------- ------ ------------ ------------ ------------
Total assets 38,600 37,078 37,466
-------------------------------- ------ ------------ ------------ ------------
Current liabilities
Borrowings 10 (1,648) (1,647) (1,645)
Lease liabilities (589) (588) (558)
Trade and other
payables (1,529) (1,304) (1,704)
Provisions (142) (144) (142)
Current tax liabilities (87) (375) (117)
Accruals and deferred
income 11 (8,263) (7,786) (7,747)
Total current
liabilities (12,258) (11,844) (11,913)
-------------------------------- ------ ------------ ------------ ------------
Non-current liabilities
Borrowings 10 (3,696) (5,314) (4,490)
Lease liabilities (1,663) (1,767) (1,691)
Deferred tax liabilities (1,437) (1,465) (1,407)
Non-current provisions (41) (41) (41)
Total non-current liabilities (6,837) (8,587) (7,629)
--------------------------------- ------ ------------ ------------ ------------
Total liabilities (19,095) (20,431) (19,542)
-------------------------------- ------ ------------ ------------ ------------
Net assets 19,505 16,647 17,924
================================== ====== ============ ============ ============
Equity
Share capital 823 821 822
Share premium
account 2,062 2,049 2,047
Merger reserve 1,002 1,002 1,002
Translation reserve (140) (140) (198)
Other reserve (117) (165) (108)
Retained earnings 15,875 13,080 14,359
Equity attributable to shareholders
of the parent 19,505 16,647 17,924
========================================== ============ ============ ============
Condensed Consolidated Statement of Cash Flows
for the financial period ended 30 June 2020
six months to 30
June Year Ended
--------------------------
2020 2019 31 December
(unaudited) (unaudited) 2019
GBP'000 GBP'000 GBP'000
--------------------------------------------- ------------ ------------ ------------
Cash flows from operating
activities
Profit before
tax 1,930 1,567 3,473
Net finance costs 141 179 339
Depreciation charge 426 450 902
Amortisation charge 786 653 1,445
Profit on sale of property,
plant and equipment - (4) (8)
Share-based payment
charge (9) 12 70
Decrease in provisions - - (2)
Cash generated in operations before working
capital movements 3,274 2,857 6,219
Increase in trade and other
receivables 1,304 571 152
Decrease/(increase) in inventories and
work in progress 30 (75) (39)
Decrease in trade and other payables
and accruals and deferred income 341 (223) 337
Cash generated in
operations 4,949 3,130 6,669
Interest
paid (112) (150) (268)
Interest
received - - -
Net income tax paid (354) (239) (1,052)
Net cash inflow from operating
activities 4,483 2,741 5,349
----------------------------------------------- ------------ ------------ ------------
Investing activities
Purchase of intangible
assets (760) (633) (1,237)
Purchase of property, plant
and equipment (35) (50) (110)
Acquisition of subsidiary
undertakings net of cash acquired - - -
Proceeds from sale of property,
plant, equipment and intangible
assets 23 53 67
Sale of businesses net of
expenses - - -
Net cash outflow from investing
activities (772) (630) (1,280)
----------------------------------------------- ------------ ------------ ------------
Financing activities
Proceeds from new
bank loan - - -
Repayment of bank
loans (812) (823) (1,646)
Repayments of obligations
under finance leases (375) (392) (755)
Issue of share capital - - -
Equity dividends
paid - (141) (275)
Intercompany - - -
Net cash (outflow)/inflow from financing
activities (1,187) (1,356) (2,676)
------------------------------------------------ ------------ ------------ ------------
Net increase in cash and cash
equivalents 2,524 755 1,393
----------------------------------------------- ------------ ------------ ------------
Cash and cash equivalents
at beginning of period 7,236 6,036 6,036
Effects of changes in foreign
exchange rates 19 (28) (193)
Cash and cash equivalents
at end of period 9,779 6,763 7,236
----------------------------------------------- ------------ ------------ ------------
Cash and cash equivalents
comprise:
Cash and short term
deposits 9,779 6,763 7,236
Bank overdrafts - - -
9,779 6,763 7,236
--------------------------------------------- ------------ ------------ ------------
Notes to the Condensed Consolidated Interim Financial Statements
1. General information
The company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 66 Clifton Street, London, EC2A 4HB. The company changed its name from Elecosoft plc to Eleco plc on 17 July 2020.
The company is listed on the Alternative Investment Market ("AIM").
The condensed consolidated interim financial information does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group's consolidated financial statements for the year ended 31 December 2019 have been filed at Companies House. The audit report was not qualified and did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006.
2. Basis of preparation
The condensed consolidated interim financial statements for the six months to 30 June 2020 have been prepared in accordance with the accounting policies which will be applied in the twelve months financial statements to 31 December 2019. These accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and as adopted for use in the European Union that are effective at 30 June 2020.
The condensed consolidated interim financial statements are unaudited. They do not include all the information and disclosures required in the annual financial statements, and therefore should be read in conjunction with the Group's published financial statements for the year ended 31 December 2019. The comparative figures for the year ended 31 December 2019 are not the Company's statutory accounts for that period but have been extracted from these accounts. The accounting policies applied in these interim financial statements are the same as those applied in the annual financial statements for the year ended 31 December 2019, with the addition of a Government Grant policy.
The Directors, having considered the Group's current financial resources, have concluded that they are adequate for the Group's present requirements. Therefore, the condensed consolidated interim financial information has been prepared on the going concern basis.
Estimates
Application of the Group's accounting policies in preparing condensed consolidated interim financial statements requires management to make judgements and estimates that affect the reported amount of assets and liabilities, revenues and expenses. Actual results may ultimately differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2018.
Risks and uncertainties
A summary of the Group's principal risks and uncertainties was set out on page 10 of the 2019 annual report and accounts. The Board considers these risks and uncertainties are still relevant to the current financial year and the impact of changes in the UK economy is reviewed in the Chairman's statement contained in this report.
The Interim Report was approved by the Directors on 24 September 2020.
3. Revenue
Revenue disclosed in the income statement is analysed as follows:
Six months to 30 Year to
June 31 December
---------------------
2020 2019 2019
(restated) (restated)
GBP'000 GBP'000 GBP'000
------------------------------------ -------- ----------- -------------
Licence sales 2,721 3,018 5,877
Recurring maintenance, support and
subscription revenue 6,953 6,763 13,557
Services income 2,541 2,930 5,964
12,215 12,711 25,398
------------------------------------ -------- ----------- -------------
The categories of revenue have been updated to include subscription-based revenue in recurring maintenance, support and subscription revenue, and prior period amounts have been adjusted to conform them to the current year presentation.
Revenue is recognised for each category as follows:
-- Licence sales - recognised at the point of transfer (delivery) of the licence to a customer.
-- Maintenance, support and subscriptions - as these services are provided over the term of the contract, revenue is recognised over the life of the contract.
-- Services - recognised on delivery of the service.
For the year ended 31 December 2019, reclassification of revenue types has been made with a net effect that GBP878,000 has been reclassified from Recurring to Services, while GBP169,000 has been reclassified from Licence to Services.
4. Segmental information
Operating segments
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments and to assess their performance.
The chief operating decision maker has been identified as the Executive Directors. The Group revenue is derived entirely from the sale of software licenses, software maintenance and support and related services. Consequently, the Executive Directors review the three revenue streams, but as the costs are not recorded in the same way, the information is presented as one segment and as such the information is presented in line with management information.
Six months to 30
June Year ended
-------------------
31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
------------------------------------------ --------- -------- ------------
Revenue 12,215 12,711 25,398
------------------------------------------- --------- -------- ------------
Adjusted EBITDA 3,283 2,946 6,302
Amortisation and impairment of purchased
intangible assets (491) (358) (855)
Depreciation (426) (450) (902)
------------------------------------------- --------- -------- ------------
Adjusted operating profit 2,366 2,138 4,545
Amortisation of acquired intangible
assets (295) (295) (590)
Acquisition expenses - (97) (143)
------------------------------------------- --------- -------- ------------
Operating profit 2,071 1,746 3,812 Net finance cost (141) (179) (339) ------------------------------------------- --------- -------- ------------ Segment profit before tax 1,930 1,567 3,473 Tax (414) (279) (772) ------------------------------------------- --------- -------- ------------ Segment profit after tax 1,516 1,288 2,701 ------------------------------------------- --------- -------- ------------ Operating profit 2,071 1,746 3,812 Amortisation of intangible assets 786 653 1,445 Depreciation charge 426 450 902 Acquisition expenses - 97 143 ------------------------------------------- --------- -------- ------------ Adjusted EBITDA 3,283 2,946 - 6,302 ------------------------------------------- --------- -------- ------------
Geographical, product and sales channel information
Revenue by geographical segment represents revenue from external customers based upon the geographical location of the customer.
Six months to 30
June Year ended
-------------------
31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
---------------- --------- -------- ------------
UK 4,645 4,704 9,436
Scandinavia 2,995 3,380 6,548
Germany 2,216 2,206 4,487
USA 438 442 1,021
Rest of Europe 1,750 1,717 3,407
Rest of World 171 262 499
12,215 12,711 25,398
---------------- --------- -------- ------------
Revenue by product group represents revenue from external customers.
Year ended
Six months to 30 June 31 December
------------------------
2020 2019 2019
GBP'000 GBP'000 GBP'000
------------------------ ----------- ----------- ------------
Project management 4,708 5,104 10,090
Site management 187 192 395
Estimating 1,381 1,403 2,737
Engineering 988 1,100 2,232
CAD/Design 836 1,037 1,969
Information management 584 710 1,400
Visualisation 2,205 2,020 4,150
Maintenance management 1,326 1,145 2,425
12,215 12,711 25,398
------------------------ ----------- ----------- ------------
The Group utilises resellers to access certain markets. Revenue by sales channel represents revenue from external customers.
Year ended
Six months to 30
June 31 December
-------------------
2020 2019 2019
GBP'000 GBP'000 GBP'000
---------- --------- -------- ------------
Direct 11,628 12,077 24,149
Reseller 587 634 1,249
12,215 12,711 25,398
---------- --------- -------- ------------
5. Operating profit
Operating profit for the period is after charging the following items:
Year
ended
Six months to 30
June 31 December
-------------------
2020 2019 2019
GBP'000 GBP'000 GBP'000
----------------------------------------- --------- -------- ------------
Software product development 864 891 1,862
Depreciation of property, plant and
equipment 141 158 241
Depreciation of right-of-use assets 285 292 661
Amortisation of acquired intangible
assets 295 295 590
Amortisation of other intangible assets 491 358 855
Share based payments (9) 12 70
Employer furlough scheme (133) - -
Profit on disposal of property, plant
and equipment - (4) (8)
Foreign exchange (gains)/losses (10) 23 110
Acquisition and other
project related expenses - 97 143
------------------------------------------ --------- -------- ------------
6. Net finance cost
Finance income and costs disclosed in the income statement is set out below:
Year ended
Six months to 30 June 31 December
------------------------
2020 2019 2019
GBP'000 GBP'000 GBP'000
-------------------------------------------- ----------- ----------- ------------
Finance costs:
Bank overdraft and loan interest (104) (136) (259)
Interest expense for leasing arrangements (37) (43) (80)
Total net finance
cost (141) (179) (339)
--------------------------------------------- ----------- ----------- ------------
7. Earnings per share
The calculations of the earnings per share are based on profit after tax attributable to the ordinary equity shareholders of the Company and the weighted average number of shares in issue for the reporting period.
Six months to 30 June
--------------------------------------------------------------------
Year to 31 December
2020 2019 2019
--------------------------------- --------------------------------- --------------------------------
Weighted
Profit Weighted Profit Weighted Profit average
attributable average attributable average attributable number
to number to number to of
shareholders of shares EPS shareholders of shares EPS shareholders shares EPS
(GBP'000) (millions) (p) (GBP'000) (millions) (p) (GBP'000) (millions) (p)
---------- ------------- ----------- ----- ------------- ----------- ----- ------------- ----------- ----
Basic
earnings
per
share 1,516 81.3 1.9 1,288 81.1 1.6 2,701 81.1 3.3
Diluted
earnings
per
share 1,516 82.0 1.8 1,288 81.9 1.6 2,701 81.8 3.3
Adjusted
earnings
per
share 1,755 81.3 2.2 1,621 81.1 2.0 3,322 81.1 4.1
---------- ------------- ----------- ----- ------------- ----------- ----- ------------- ----------- ----
Shares held by the Employee Share Ownership Trust are excluded from the weighted average number of shares in the period. Adjusted profit attributable to shareholders is reconciled to reported profit attributable to shareholders in note 13.
8. Dividends
No dividends have been paid in the six months to 30 June 2020 (2019: 0.40 pence per ordinary share).
Scrip dividends were issued in the six months to 30 June 2020 as follows:
Year to 31
Six months to 30 June December
-----------------------------------------
2020 2020 2019 2019 2019 2019
shares shares shares
Ordinary shares issued GBP'000 issued GBP'000 issued GBP'000
-------------------------- --------- --------- -------- -------- -------- --------
Declared and paid during
the year
Interim - current year - - - - 171,658 133
Final - previous year - - 248,585 186 248,585 186
- - 248,585 186 420,243 319
--------- ---------- ------------------------- -------- -------- -------- --------
Cash dividends of GBPnil (2019: GBP141,000) were paid in the six months to 30 June 2020 as follows:
Year to 31
Six months to 30 June December
------------------------------------
2020 2020 2019 2019 2019 2019
per per per
Ordinary shares share GBP'000 share GBP'000 share GBP'000
-------------------------- ------- -------- ------- -------- ------- --------
Declared and paid during
the year
Interim - current year - - - - 0.30 134
Final - previous year 0.40 - 0.40 141 0.40 141
0.40 - 0.40 141 0.70 275
-------------------------- ------- -------- ------- -------- ------- --------
The Directors have not recommended an interim dividend (2019: 0.30 pence per ordinary share).
9. Other intangible assets
Other intangible assets comprise capitalised development costs, acquired customer relationships and purchased intangible assets. Additions in the six months to 30 June 2020 represent purchased intangible assets of GBPnil (2019: GBPnil) and internal development costs capitalised of GBP760,000 (2019: GBP633,000) Internal development relates to software development projects that meet the accounting policy criteria for capitalisation.
10. Cash and borrowings
The net cash position of the group as at 30 June 2020 is set out below.
At 31
At 30 June December
---------------------
2020 2019 2019
(restated)
GBP'000 GBP'000 GBP'000
Cash and cash equivalents 9,779 6,763 7,236
Bank loans (5,344) (6,961) (6,135)
Bank overdrafts - - -
Lease liabilities (2,252) (2,355) (2,249)
2,183 (2,553) (1,148)
-------------------------------- -------- ----------- ----------
Maturity profile of borrowings
In one year
or less (1,648) (1,647) (1,645)
Between one and two years (1,648) (1,647) (1,648)
Between two and five years (2,048) (3,667) (2,842)
(5,344) (6,961) (6,135)
-------------------------------- -------- ----------- ----------
The Group's borrowings include a five-year fixed term loan of GBP8.0m with Barclays Bank.
The new facility is repayable over five years, with equal quarterly instalments of GBP400,000. The interest rate has been fixed for three years at 3.768%. The group also retains its existing GBP1.0m overdraft facility. Security provided to the bank comprises a cross guarantee and debenture between Elecosoft plc and certain group subsidiaries.
11. Accruals and deferred income
At 31
At 30 June December
------------------
2020 2019 2019
GBP'000 GBP'000 GBP'000
Accruals 2,020 1,957 1,885
Deferred income 6,243 5,829 5,862
8,263 7,786 7,747
----------------- -------- -------- ----------
Deferred income represents income from software maintenance and support contracts and is taken to revenue in the income statement on a straight-line basis in line with the service and obligations over the term of the contract.
12. Related Party Disclosures
Transactions between Group undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
The Directors of the Company had no material transactions with the Company during the year, other than a result of service agreements.
An amount of GBP36,667 (2019: GBP37,500) was paid to JHB Ketteley & Co Limited under a lease for occupation by the Group of 66 Clifton Street, London, EC2A 4HB and GBP2,500 (2019: GBP2,500) for a contribution to the office costs at Burnham-on-Crouch. J H B Ketteley is a director of JHB Ketteley & Co Limited.
An amount of GBP14,400 (2019: GBP9,900) was paid to Political Lobbying & Media Relations Ltd (PLMR) in respect of website development costs. K Craig is a director of PLMR.
13. Additional performance measures
The Group uses adjusted figures, which are not defined by generally accepted accounting principles ("GAAP") such as IFRS. Adjusted figures and underlying growth rates are presented as additional performance measures used by management, as they provide relevant information in assessing the Group's performance, position and cash flows. We believe that these measures enable investors to track more clearly the core operational performance of the Group, by separating out items of income or expenditure relating to acquisitions, disposals and capital items. Our management uses these financial measures, along with IFRS financial measures, in evaluating the operating performance of the Group.
Year ended
Six months to 30
June 31 December
-------------------
2020 2019 2019
GBP'000 GBP'000 GBP'000
------------------------------------------- --------- -------- ------------
Operating profit 2,071 1,746 3,812
Acquisition related expenses - 97 143
Amortisation of acquired intangible
assets 295 295 590
Adjusted operating profit 2,366 2,138 4,545
------------------------------------------- --------- -------- ------------
Profit before tax 1,930 1,567 3,473
Acquisition related expenses - 97 143
Amortisation of acquired intangible
assets 295 295 590
Adjusted profit before tax 2,225 1,959 4,206
------------------------------------------- --------- -------- ------------
Tax charge (414) (279) (772)
Acquisition related expenses - - -
Amortisation of acquired intangible
assets (56) (59) (112)
Adjusted tax charge (470) (338) (884)
------------------------------------------- --------- -------- ------------
Profit after tax 1,516 1,288 2,701
Acquisition related expenses - 97 143
Amortisation of acquired intangible
assets 239 236 478
Adjusted profit after tax 1,755 1,621 3,322
------------------------------------------- --------- -------- ------------
Cash generated in operations 4,949 3,130 6,669
Purchase of intangible assets (760) (633) (1,237)
Purchase of property, plant and equipment (35) (50) (110)
Acquisition related expenses - 72 143
Adjusted operating cash flow 4,154 2,519 5,465
------------------------------------------- --------- -------- ------------
Adjusted operating cash flow 4,154 2,519 5,465
Net interest paid (112) (150) (268)
Tax paid (354) (239) (1,052)
Proceeds from disposal of PPE 23 53 67
Acquisition expenses - (72) (143)
Free cashflow 3,711 2,111 4,069
------------------------------------------- --------- -------- ------------
14. Exchange rates
The following exchange rates have been applied in preparing the condensed consolidated financial statements:
Year to 31 December
Income statement Balance sheet 2019
------------------- ---------------- ----------------------
Six months to
30 June As at 30 June Income Balance
2020 2019 2020 2019 Statement sheet
----------------------- --------- -------- ------- ------- ------------ --------
Swedish Krona to
Sterling 12.17 11.97 11.52 11.79 12.06 12.39
Euro to Sterling 1.15 1.14 1.10 1.12 1.14 1.18
US Dollar to Sterling 1.27 1.29 1.24 1.27 1.28 1.33
----------------------- --------- -------- ------- ------- ------------ --------
15. Government Grants
Grants related to income are presented as part of the profit and loss and have been deducted against the related expense in the period.
Grants, across the Group, amounted to GBP133,000 during the six months ended 30 June 2020.
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END
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