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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 | 39,993 | 08:00:02 |
| 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 : 3684M
Elecosoft PLC
11 May 2020
11 May 2020
Elecosoft plc
("Elecosoft", the "Company" or the "Group")
Results for the Year Ended 31 December 2019
Notice of AGM and publication of Annual Report
Based on audited annual accounts
Elecosoft plc (AIM: ELCO), the construction software specialist, is pleased to announce its results for the year ended 31 December 2019.
Financial Highlights
-- Revenue up 14% to GBP25.4m (2018: GBP22.2m) of which 57% was recurring maintenance, support and subscription revenue (2018: 55%)
-- Reported operating profit up 43% to GBP3.8m (2018***: GBP2.7m) -- Profit before tax up 45% to GBP3.5m (2018***: GBP2.4m) -- Reported basic earnings per share up 43% to 3.3p (2018***: 2.3p) -- Adjusted operating profit* up 15% to GBP4.5m (2018***: GBP4.0m) -- Adjusted earnings per share* up to 4.1p (2018***: 3.8p) -- Free cash flow** up 29% to GBP4.1m (2018***: GBP3.1m) -- Net cash GBP1.1m, with GBP7.2m cash at year end (2018: GBP1.8m net bank debt)
(* Adjusted profit measures exclude acquisition related expenses and amortisation of acquired intangible assets.)
(* Non-gaap measures, see note 8.)
(** Free cash flow represents cash generated in operations less purchase of intangible assets and property, plant and equipment, net of finance costs and tax plus any proceeds from disposals of property, plant and equipment.)
(*** 2018 restated for the impact of IFRS16)
Operational Highlights
-- Major release of Powerproject (R) XV.
-- Elecosoft products Powerproject SaaS, IconSystem and ShireSystem listed on "G-Cloud 11" the Crown Commercial Services ("CCS") digital marketplace, a service for supply of cloud applications and public sector procurement.
-- Release of new Site Progress Mobile application in the UK, Sweden and Germany. -- Major release of ShireSystem software version better supporting facilities management. -- ShireSystem release of its Mobile Pro application for iOS. -- IconSystem successfully secured orders in hospitality. -- New Staircon all-time-high sales in the US market.
-- Release of Artificial Intelligence ("AI") visualisation tool for interior flooring segment.
-- UK Construction Computing Award win for sixth successive year. -- All CMYA Gold winners used Powerproject.
Executive Chairman, John Ketteley said:
"Elecosoft delivered a year of growth, cash generation and product innovation in 2019, despite the uncertain trading conditions experienced in the lead up to Brexit. We increased our revenues by 14 per cent, our profit before tax by 45 per cent and our earnings per share by 43 per cent. Powerproject XV, our latest project management programme, also won the "Hammers" award for the UK Project Planning and Management Software of the year, for the sixth time.
During the year under review, we also eliminated our net bank debt of GBP1.8m as at 31 December 2018 and generated a net cash position as at 31 December 2019 of GBP1.1m. One cannot underestimate the severity the challenges being experienced in all world markets as a consequence of the impact of Coronavirus, and accordingly since the beginning of 2020, we have concentrated on cash generation and conservation, adjusting product consultancy and training programmes so that they can be delivered better over the web - and thus far, these actions have proved effective in dealing with the Coronavirus threat. "
Printed copies of the Annual Report and Accounts for the year ended 31 December 2019 and Notice of the Annual General Meeting will be sent to those Shareholders who requested to receive them. The Report and Accounts are also available for download from the Elecosoft website at www.ir.elecosoft.com .
For further information, please contact: Elecosoft plc Tel: +44 (0)20 7422 8000 John Ketteley, Executive Chairman Jonathan Hunter, Chief Operating Officer Ben Moralee, Group Finance Director finnCap Limited Tel: +44 (0)20 7220 0500 Geoff Nash/ Kate Bannatyne (Nomad) Camille Gochez (ECM) Newgate Communications Tel: +44 (0)20 3757 6880 Elisabeth Cowell / Isabelle Smurfit elecosoft@newgatecomms.com
About Elecosoft plc
Elecosoft is a specialist international provider of software and related services to the Architectural, Engineering, Construction and Owner/Operator (AECO) industries and digital marketing industries from centres of excellence in the UK, Sweden, Germany and the US. Elecosoft's market leading software solutions are developed by teams in the United Kingdom, Sweden and Germany; and its software solutions cover project management, construction site management, estimating, timber engineering, 3D design and visualisation, property management and cloud based digital marketing solutions. Elecosoft is listed on the Alternative Investment Market in London (AIM: ELCO).
Executive Chairman's Statement
Elecosoft delivered a year of continuing growth, cash generation and product innovation in the year ended 31 December 2019 and despite the uncertain trading conditions experienced during the year, we increased our revenues by 14 per cent, our profit before tax by 45 per cent and our earnings per share by 43 per cent.
During the year under review, we also eliminated our net bank debt of GBP1.8m as at 31 December 2018 and generated a net cash position as at 31 December 2019 of GBP1.1m. As a consequence, Elecosoft is better placed to meet the challenge of Coronavirus that we all face at the beginning of 2020.
Trading
Revenues
Group revenues for the year ended 31 December 2019 amounted to GBP25.4m (2018: GBP22.2m), 14 per cent higher than in the previous year, and 16 per cent higher at constant currencies. Group revenues are generated principally from sales of specialist construction and property related software programs that are used for Project Management, Site Management, Estimating, Engineering, CAD/ Design, Information Management, AI Visualisation, Property Management and Maintenance, which are major elements of the construction process.
Elecosoft was previously focused on the development of software and related services for the Architectural, Construction and Engineering sectors. However, with the acquisition of IconSystem and ShireSystem in the UK, and ActiveOnline in Germany in the past three years, we have expanded successfully into providing software solutions for the property management, retail and manufacturing sectors, and this has enabled Elecosoft increasingly to supply combinations of our software to our customers to facilitate the delivery of complex solutions that are needed in their operations.
UK revenues accounted for GBP9.4m in the year under review (2018: GBP8.2m), 15 per cent higher than last year and equivalent to 37 per cent of total group revenues; and overseas revenues accounted for GBP16.0m (2018: GBP14.0m) 14 per cent higher than last year, which was occasioned in part by lower foreign currency rates against Sterling, particularly in Sweden.
Overseas revenues accounted for 63 per cent of total group revenues, which were generated as follows:
-- Scandinavia: GBP6.5m (2018: GBP6.8m - impacted by adverse foreign exchange movement against Sterling);
-- Germany: GBP4.5m (2018: GBP3.4m - attributable to increased revenues for Powerproject and ActiveOnline);
-- US GBP1.0m (2018: GBP0.8m - attributable to sales of Staircon in North America and ActiveOnline); and
-- Rest of World: GBP3.9m (2018: GBP3.0m - driven by our Netherlands business and ActiveOnline Revenues).
We continue to enjoy excellent relationships with our customers, many of whom have collaborated extensively with our own software developers in the design and development of the software programs and features they require. We, in turn, seek to support our customers in the use of our software and in making adjustments to it when requested to do so. Our recurring revenue was 57 per cent of our total revenue which is an indication of the importance to us of our strong customer relationships.
Over the years, Elecosoft has also supplied its software products to universities and other educational establishments in the UK, Sweden, Germany, the US and Australia for educational purposes. I am pleased to say that the number of educational establishments, to which we have provided our software programs free of charge has reached 100 this year and I am informed that, as a consequence, more than 8,000 students will have access to Elecosoft's software programs in their studies this year. I would also like to take this opportunity to congratulate my colleagues who have been directly involved in dealing with Elecosoft's educational support programme and to thank them for their commitment to such a worthwhile project.
Profits
Operating profit for the year under review was GBP3.8m (2018: GBP2.7m) an increase of 43 per cent; profit before tax and exceptional acquisition related expenses was GBP3.6m (2018: GBP3.1m) an increase of 17 per cent; profit before tax was GBP3.5m (2018: GBP2.4m) an increase of 45 per cent and profit after tax was GBP2.7m (2018: GBP1.8m) an increase of 50 per cent.
Finance
The Board is conscious of the need to concentrate on satisfying the need for adequate cash generation in these markets. It is also mindful of the requirement to comply with the terms of our banking facilities. I am therefore pleased to report that cash generated from operations in the year under review amounted to GBP6.7m (2018: GBP5.0m), an increase of 33 per cent. As at 31 December 2019, Elecosoft had net bank cash of GBP1.1m, which compared with its net bank debt of GBP1.8m at 31 December 2018. Group net assets at 31 December 2019 amounted to GBP17.9m (31 December 2018: GBP15.5m) and intangible assets amounted to GBP22.8m at 31 December 2019 (2018: GBP23.3m).
Software Development
Market-leading software development is key to the success of our business and is developed by our teams of experienced developers in the UK, Germany, Sweden and Spain. The need to monitor and improve our existing software programs on a regular basis will be obvious. However, there has always been a need to nurture software innovation and this year I am delighted to report that our German colleagues successfully developed and launched our first Artificial Intelligence tool at the 2020 Domotex Show in Hanover and this was very well received.
Other software projects on which our software development teams were working in close collaboration with our customers in the UK and Germany in 2019 were (i) Powerproject XV, (ii) our latest Site Progress Mobile applications in the UK, Sweden and Germany and (iii) ShireSystems' Mobile Pro application for iOS in the UK. As a consequence of this software development activity, our software development expenditure in the year under review increased to GBP3.1m (2018: GBP2.8m), including expenditure on major software development projects totalling GBP1.2m (2018: GBP1.0m), which were capitalised in the year.
Software Highlights
Having for years supplied our software to the Public Sector in the United States, I am pleased to inform you that Elecosoft was approved during the year by HM Government to supply its products to the Public Sector in the UK and the opportunity for us now to do so was clearly a very welcome development. We have also listed a number of our leading software programs on the Government's G-Cloud 11 framework, and we look forward to supplying the UK Public Sector with our cloud--based market leading software solutions, including, Project Planning, Project Management, Building Information Management and Maintenance Management software programs and related services. We are confident that the Public Sector will benefit from the efficiencies that our latest software solutions will deliver.
I am also proud to inform you that Elecosoft's Powerproject software won the award for the UK's Best Project Planning Software for the sixth year running at the 2019 Construction Software Awards ("The Hammers"); I am even more delighted to report that all six Gold Medal Winners of the Construction Manager of the Year Awards ("CMYA") were users of Powerproject.
Brexit
2019 saw a considerable amount of political uncertainty, which contributed to delays in decision making and orders placed by the UK construction and architectural industries, and across the retail, manufacturing and property sectors. However, the UK formally left the European Union at the end of January 2020 and this provided some clarity for decision making. As a Group, Elecosoft has been able to minimise the impact that uncertainty created by Brexit has played because the Elecosoft Group has natural hedges of local income and expenditure; and combining this with tight cost controls, we have ensured adequate cash being generated and held in each country in which we operate.
Elecosoft Employees
Elecosoft employees are a strong and talented group of people who work with skill, enthusiasm and humour in all the markets we serve; the average number of employees in the Elecosoft team has increased from 228 in 2018 to 251 in 2019 and as mentioned above we will be doing all we can for their wellbeing during the Coronavirus crisis.
Coronavirus
It is difficult to gauge at this stage the impact that Coronavirus will have on the economy, but the signs are that it is becoming a seriously disruptive problem for industry and the markets that we serve. Our prime concern as the situation develops is the wellbeing of all our employees and accordingly our management are continually assessing the potential impact of Coronavirus developments, which may adversely impact our business and our employees in particular.
As a consequence, we have already succeeded in transferring all our operations, including development, training, support, finance and management into home working environments in each country in which we operate. Our local operating units have and will continue to adopt and implement operational policies and recommendations for dealing with the Coronavirus situation recommended by national governments. I would like to thank and congratulate every employee of Elecosoft for the way in which they have set about dealing with the disruption and for the initiative, thoroughness, understanding and speed that they have shown in transferring all of our business units in all the countries we serve into a very well connected and co-ordinated home working environment which will enable us to continue to provide our customers with virtually full service.
We consider that Coronavirus will inevitably place pressure on our cash resources and our finance colleagues will be assessing the potentially beneficial impact of Government actions to provide financial support in those countries in which we have a presence and will also be considering ways to conserve as much as possible of our existing cash resources.
Proposed Dividend
Elecosoft's strong trading performance and cash generation in 2019, and, ironically, the strong start to trading in 2020, would normally have warranted the payment of an increased final dividend.
However, having regard to the uncertainties created by the Coronavirus situation and the need to conserve our cash resources, the Board has decided to not recommend a final dividend.
Outlook
It is already clear that the Coronavirus outbreak is one of the most difficult challenges that the present generation has ever had to resolve and it can only be resolved by governments acting in concert applying medically proven solutions across the globe. However, in the meantime we must conduct our business in a manner which will make a contribution to the implementation of the wider strategy.
This involves collaborating with governments and following their directions, always having in mind the best interests of our employees, our customers and our shareholders. This has been our policy thus far. We have been reasonably successful in remaining engaged with our customers and this will be our policy going forward and, despite the present difficulty caused by Coronavirus, I believe that Elecosoft has the necessary resilience while we await the success of concerted government action in dealing with it.
Although Elecosoft performed well in 2019 and in the first three months of 2020, we must now do our best to confront the impact of Coronavirus worldwide, the breakout of which in the first instance impacted on our employees, and then on our customers. However, I hope that the availability of our software, service and software training as a result of our home working strategy will assist our customers to maintain the momentum of their businesses and to facilitate a return to more normal levels of activity as circumstances allow.
John Ketteley
Executive Chairman
7 May 2020
Consolidated Income Statement
For the year ended 31 December 2019
Hot Features
Premium
2019 2018
(restated)
GBP'000 GBP'000
------------------------------------------- ---- ---------- -----------
Continuing operations
Revenue 25,398 22.220
Cost of sales (2,647) (2,684)
Gross profit 22,751 19,536
Amortisation and impairment of intangible
assets (1,445) (1,124)
Acquisition and corporate
finance related expenses (143) (689)
Other selling and administrative
expenses (17,351) (15,057)
Selling and administrative expenses (18,939) (16,870)
----------
Operating profit 3,812 2,666
Finance income - -
Finance cost (339) (272)
Profit before tax 3,473 2,394
Tax (772) (598)
----------------------------------------------------- ---------- -----------
Profit for the financial
period 2,701 1,796
--------------------------------------------- ---- ---------- -----------
Attributable to:
Equity holders of the parent 2,701 1,796
--------------------------------------------- ---- ---------- -----------
Earnings per share - (pence
per share)
--------------------------------------------- ---- ---------- -----------
Basic 3.3 p 2.3p
Diluted 3.3 p 2.3p
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2019
2019 2018
(restated)
GBP'000 GBP'000
---------------------------------------------- -------- -----------
Profit for the
period 2,701 1,796
Other comprehensive income:
------------------------------------------------ -------- -----------
Items that will be reclassified subsequently
to profit and loss:
Translation differences on
foreign operations (51) (82)
Other comprehensive income net
of tax (51) (82)
Total comprehensive income for
the period 2,650 1,714
------------------------------------------------- -------- -----------
Attributable
to:
Equity holders of the
parent 2,650 1,714
------------------------------------------------ -------- -----------
Consolidated Statement of Changes in Equity
For the year 31 December 2019
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
(restated)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- --------- --------- --------- ------------ --------- ----------- --------
At 1 January 2018 774 - 575 (66) (283) 10,486 11,486
Adjustments for prior
periods (IFRS 16) - - - - - (162) (162)
At 1 January 2018 (restated) 774 - 575 (66) (283) 10,324 11,324
Dividends - - - - - (188) (188)
Share-based payments - - - - 106 - 106
Issue of share capital 44 2,050 429 - - - 2,523
Transactions with owners 44 2,050 429 - 106 (188) 2,441
-------------------------------- --------- --------- --------- ------------ --------- ----------- --------
Profit for the period - - - - - 1,796 1,796
Other comprehensive income:
Exchange differences
on translation of net
investments in foreign
operations - - - (82) - - (82)
Other - (1) - - - 1 -
-------------------------------- --------- --------- --------- ------------ --------- ----------- --------
Total comprehensive income
for the period - (1) - (82) - 1,797 1,714
-------------------------------- --------- --------- --------- ------------ --------- ----------- --------
At 31 December 2018 (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
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 822 2,047 1,002 (198) (108) 14,359 17,924
================================ ========= ========= ========= ============ ========= =========== ========
Consolidated Balance Sheet
At 31 December 2019
2019 2018 As at 1 January
(restated) 2018 (restated)
GBP'000 GBP'000 GBP'000
------------------------------------- --------- ----------- ----------------
Non-current assets
Goodwill 15,598 15,746 11,480
Other intangible
assets 7,242 7,536 3,432
Property, plant and equipment 734 912 513
Right-of-Use assets 2,048 2,440 2,657
Deferred tax assets 118 139 219
Total non-current assets 25,740 26,773 18,301
--------------------------------------- --------- ----------- ----------------
Current assets
Inventories 46 8 16
Trade and other receivables 4,339 4,491 3,738
Current tax assets 105 54 37
Cash and cash equivalents 7,236 6,036 4,737
Total current
assets 11,726 10,589 8,528
-------------------------------------- --------- ----------- ----------------
Total assets 37,466 37,362 26,829
-------------------------------------- --------- ----------- ----------------
Current liabilities
Bank overdraft - - (1,012)
Borrowings (1,645) (1,648) (790)
Lease liabilities (558) (659) (565)
Trade and other payables (1,704) (1,600) (1,496)
Provisions (142) (144) (209)
Current tax liabilities (117) (343) (241)
Accruals and deferred
income (7,747) (7,713) (6,593)
Total current
liabilities (11,913) (12,107) (10,906)
-------------------------------------- --------- ----------- ----------------
Non-current liabilities
Borrowings (4,490) (6,202) (1,580)
Lease liabilities (1,691) (1,980) (2,257)
Deferred tax liabilities (1,407) (1,553) (721)
Non-current provisions (41) (41) (41)
Total non-current liabilities (7,629) (9,776) (4,599)
--------------------------------------- --------- ----------- ----------------
Total liabilities (19,542) (21,883) (15,505)
-------------------------------------- --------- ----------- ----------------
Net assets 17,924 15,479 11,324
========================================== ========= =========== ================
Equity
Share capital 822 818 774
Share premium
account 2,047 2,049 -
Merger reserve 1,002 1,004 575
Translation reserve (198) (148) (66)
Other reserve (108) (177) (283)
Retained earnings 14,359 11,933 10,324
Equity attributable to shareholders
of the parent 17,924 15,479 11,324
======================================== ========= =========== ================
Consolidated Statement of Cash Flows
For the year ended 31 December 2019
2019 2018
(restated)
GBP'000 GBP'000
----------------------------------------------------- -------- -----------
Cash flows from operating activities
Profit before
tax 3,473 2,394
Net finance costs 339 272
Depreciation charge 902 778
Amortisation charge 1,445 1,124
Profit on sale of property,
plant and equipment (8) (16)
Share-based payments
charge 70 106
Decrease in provisions (2) (63)
Cash generated in operations
before working capital movements 6,219 4,595
Decrease/(increase) in trade
and other receivables 152 (753)
Decrease/(increase) in inventories
and work in progress (39) 15
Increase in trade and other
payables and accruals and deferred
income 337 1,160
Cash generated in
operations 6,669 5,017
Interest
paid (268) (151)
Net income tax paid (1,052) (618)
Net cash inflow from operating
activities 5,349 4,248
------------------------------------------------------- -------- -----------
Investing activities
Purchase of intangible
assets (1,237) (1,064)
Purchase of property, plant
and equipment (110) (123)
Acquisition of subsidiary undertakings
net of cash acquired - (7,169)
Proceeds from sale of property,
plant, equipment and intangible
assets 67 83
Net cash inflow from investing
activities (1,280) (8,273)
------------------------------------------------------- -------- -----------
Financing activities
Proceeds from new
bank loan - 6,025
Repayment of bank
loans (1,646) (807)
Repayment of leasing liabilities (755) (701)
Equity dividends paid (275) (188)
Issue of share capital - 2,083
Net cash (outflow)/inflow from financing activities (2,676) 6,412
-------------------------------------------------------- -------- -----------
Net increase in cash and cash
equivalents 1,393 2,387
------------------------------------------------------- -------- -----------
Cash and cash equivalents at beginning of
period 6,036 3,725
Effects of changes in foreign
exchange rates (193) (76)
Cash and cash equivalents at
end of period 7,236 6,036
------------------------------------------------------- -------- -----------
Cash and cash equivalents comprise:
Cash and short-term
deposits 7,236 6,036
Bank overdrafts - -
7,236 6,036
----------------------------------------------------- -------- -----------
Extract from Notes to the Consolidated Financial Statements
1. Revenue
Revenue disclosed in the income statement is analysed as follows:
2019 2018
GBP'000 GBP'000
Licence sales 6,046 5,540
Recurring maintenance, support
and subscription revenue 14,435 12,326
Services income 4,917 4,354
--------------------------------- -------- --------
Total revenue 25,398 22,220
--------------------------------- -------- --------
2. Segment information
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 licences, software maintenance and support and related services. Consequently, the Executive Directors review the three revenue streams but as the costs and profits are not monitored or recorded in the same way the information is presented as one segment and as such the information is presented in line with management information.
2019 2018
(restated)
Software Software
GBP'000 GBP'000
Revenue 25,398 22,220
------------------------------ --------- -----------
Adjusted EBITDA 6,302 5,257
Amortisation and impairment
of purchased intangible
assets (855) (529)
Depreciation (902) (778)
------------------------------
Adjusted operating profit 4,545 3,950
Amortisation of acquired
intangible assets (590) (595)
Acquisition expenses (143) (689)
------------------------------ --------- -----------
Operating profit 3,812 2,666
Net finance cost (339) (272)
------------------------------ --------- -----------
Segment profit before tax 3,473 2,394
Tax (772) (598)
------------------------------
Segment profit after tax 2,701 1,796
============================== ========= ===========
Operating profit 3,812 2,666
Amortisation of intangible
assets 1,445 1,124
Depreciation charge 902 778
Acquisition expenses 143 689
Adjusted EBITDA 6,302 5,257
============================== ========= ===========
Development project costs are expensed as incurred unless they meet the accounting policy requirements for capitalisation. The software projects that have been capitalised in the twelve months to 31 December 2019 are explained in the Financial Review. Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, and adjusted to exclude acquisition expenses.
2. Segment information continued
2019 2018
(restated)
Software Software
GBP'000 GBP'000
Group assets and liabilities
Segment assets 37,466 37,362
Unallocated assets - -
------------------------------ --------- -----------
Total Group assets 37,466 37,362
------------------------------- --------- -----------
Segment liabilities 19,542 21,883
Unallocated liabilities - -
------------------------------ --------- -----------
Total Group liabilities 19,542 21,883
------------------------------- --------- -----------
Geographical, Product and sales channel information
Revenue by geographical area represents continuing operations revenue from external customers based upon the geographical location of the customer.
Revenue by geographical destination is as follows:
2019 2018
GBP'000 GBP'000
UK 9,436 8,227
Scandinavia 6,548 6,772
Germany 4,487 3,442
USA 1,021 777
Rest of Europe 3,407 2,482
Rest of World 499 520
25,398 22,220
---------------- -------- --------
Revenue by product group represents continuing operations revenue from external customers.
Revenue by product group is as follows:
2019 2018
Software
for: GBP'000 GBP'000
------------------------ -------- --------
Project management 10,090 9,774
Site management 395 411
Estimating 2,737 2,843
Engineering 2,232 2,350
CAD/Design 1,969 2,070
Information management 1,400 1,180
Visualisation 4,150 2,395
Maintenance management 2,425 1,197
25,398 22,220
------------------------ -------- --------
The Group utilises resellers to access certain markets. Revenue by sales channel represents continuing operations revenue from external customers.
Revenue by sales channel is as follows:
2019 2018
GBP'000 GBP'000
Direct 24,149 20,950
Reseller 1,249 1,270
25,398 22,220
---------- -------- --------
2. Segment information continued
Non-current assets excluding deferred tax by geographical area represent the carrying amount of assets based in the geographical area in which the assets are located.
Non-current assets by geographical location are as follows:
2019 2018
(restated)
GBP'000 GBP'000
UK 15,005 15,472
Scandinavia 7,565 7,748
Germany 3,117 3,483
USA 1 2
Rest of Europe 52 68
Rest of World - -
25,740 26,773
---------------- -------- -----------
Information about major customers
Revenues arising from sales to the Group's largest customer were below the reporting threshold of 10% of Group revenue (2018: Below 10% reporting threshold).
3. Operating profit
The continuing operations operating profit for the period is stated after charging/(crediting) the following items.
2019 2018
(restated)
GBP'000 GBP'000
---------------------------------------------------- -------- -----------
Software product development 1,862 1,770
Depreciation of property, plant and
equipment 241 191
Depreciation of right-of-use assets 661 587
Amortisation of acquired intangible
assets 590 595
Amortisation of other intangible
assets 855 529
Profit on disposal of property, plant
and equipment (8) (16)
Foreign exchange (gains)/losses 110 (31)
Fees payable to the Company's
auditor for:
The audit of the parent company and consolidated
financial statements 108 43
Fees payable to the Company's auditor and its
associates for other services:
The audit of the Company's
subsidiaries 81 64
Other services 7 4
Operating lease rentals:
Plant, equipment and
vehicles 290 267
Properties 238 214
Acquisition
expenses 143 689
----------------------------------------------------- -------- -----------
4. Employee information
The average number of employees during the period, including Directors, in continuing operations was made up as follows:
2019 2018
Number Number
Sales & marketing 58 56
Client services 82 74
Software development 66 58
Management and administration 45 40
251 228
------------------------------- ------- -------
Staff costs during the period, including Directors amounted to:
2019 2018
GBP'000 GBP'000
Wages and salaries 10,983 9,584
Social security 2,295 1,951
Pension costs 589 679
Share-based payments 71 105
13,938 12,319
Less: Development staff
costs capitalised (1,234) (1,014)
----------------------------
12,704 11,305
------------------------- -------- --------
Pension costs relate to contributions to defined contribution pension schemes. Development staff costs are charged to projects and capitalised if those projects meet the criteria for capitalisation.
5. Dividends
Dividends paid during the year comprised a final 2018 dividend of 0.40p per ordinary share (2018: 0.40) and a 2019 interim dividend of 0.30p per ordinary share (2018: 0.28p).
Shareholders were offered an opportunity to receive the 2018 final dividend in the form of new shares in lieu of the proposed final dividend. The 2019 interim dividend was declared as a scrip dividend, with shareholders having the option to receive an alternative cash dividend of the same value.
Cash dividends of GBP275,000 (2018: GBP188,000) were paid during the year as follows.
2019 2018 2019 2018
pence pence
Ordinary Shares per share per share GBP'000 GBP'000
------------------------------- ----------- ----------- -------- --------
Declared and paid during the
year
Interim - current
year 0.30 0.28 134 88
Final - previous year 0.40 0.40 141 100
0.70 0.68 275 188
------------------------------ ----------- ----------- -------- --------
Scrip dividends were issued in the year as follows.
Value of shares issued
Shares issued (GBP'000)
------------------ -------------------------
Ordinary Shares 2019 2018 2019 2018
--------------------------- -------- -------- ------------ -----------
Declared and paid during
the year
Interim - current year 171,658 153,240 133 126
Final - previous year 248,585 414,178 186 202
420,243 567,418 319 328
-------------------------- -------- -------- ------------ -----------
The Directors have not recommended a final dividend (2018: 0.40 pence) having regard to the uncertainties created by the Coronavirus situation.
6. Basic and diluted earnings per share
2019 2018 (restated)
---------------------------------------- ----------------------------------------
Weighted Weighted
Net profit average Net profit average
attributable number attributable number
to shareholders of shares EPS to shareholders of shares EPS
GBP'000 (millions) (pence) GBP'000 (millions) (pence)
Basic earnings per
share 2,701 81.1 3.3 1,796 77.4 2.3
Diluted earnings
per share 2,701 82.0 3.3 1,796 78.2 2.3
Adjusted basic earnings
per share 3,322 81.1 4.1 2,967 77.4 3.8
Shares held by the Employee Share Ownership Trust are excluded from the weighted average number of shares in the period.
7. Post-balance sheet events
The assessment of the Coronavirus situation will need continued attention and will evolve over time. In our view, Coronavirus is considered to be a non-adjusting post statement of financial position event and no adjustment is made in the financial statements as a result. The rapid development and fluidity of the Coronavirus virus make it difficult to predict the ultimate impact at this stage. We have outlined in the Strategic Report and Significant Accounting Policies the actions management have taken to maintain the momentum of the Group's activities. Management will continue to assess the impact of Coronavirus on the Group and Company, however, it is not possible to reasonably quantify the impact at this stage.
8. 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 Year ended
31 December 31 December
2019 2018
(restated)
GBP'000 GBP'000
------------------------------------------- ------------ ------------
Operating profit 3,812 2,666
Acquisition related expenses 143 689
Amortisation of acquired intangible
assets 590 595
Adjusted operating profit 4,545 3,950
------------------------------------------- ------------ ------------
Profit before tax 3,473 2,394
Acquisition related expenses 143 689
Amortisation of acquired intangible
assets 590 595
Adjusted profit before tax 4,206 3,678
------------------------------------------- ------------ ------------
Tax charge (772) (598)
Amortisation of acquired intangible
assets (112) (113)
Adjusted tax charge (884) (711)
------------------------------------------- ------------ ------------
Profit after tax 2,701 1,796
Acquisition related expenses 143 689
Amortisation of acquired intangible
assets 478 482
Adjusted profit after tax 3,322 2,967
------------------------------------------- ------------ ------------
Cash generated in operations 6,669 5,017
Purchase of intangible assets (1,237) (1,064)
Purchase of property, plant and equipment (110) (123)
Acquisition related expenses 143 689
Adjusted operating cash flow 5,465 4,519
------------------------------------------- ------------ ------------
Notes
1. Elecosoft plc ("the Company") and its subsidiaries (together "the Group") are primarily involved in software sales and development. Elecosoft plc, a Public Limited Company incorporated and domiciled in England, is the Group's ultimate parent Company. The address of Elecosoft plc's registered office is 66 Clifton Street, London, EC2A 4HB and the principal place of business is 66 Clifton Street, London, EC2A 4HB.
Statutory accounts for 2018 have been delivered to the Registrar of Companies and those for 2019 will be delivered in due course. The Company's auditors Grant Thornton UK LLP, have reported on the 2019 accounts; their report was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498 (2) or (3) Companies Act 2006. Whilst the financial information included in this announcement has been computed in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS") this announcement does not itself contain sufficient information to comply with IFRS.
The principal accounting policies used in preparing this preliminary results announcement are those that the Company will apply in its statutory accounts for the year ended 31 December 2019 and are unchanged from those disclosed in the Company's Annual Report and Accounts for the year ended 31 December 2018 except for the adoption of new standards effective 1 January 2019 as described in notes to the financial statements for the year ended 31 December 2018. The adoption of those new standards did not have a material impact on the financial statements.
Full financial statements for the year ended 31 December 2019 will be posted to shareholders in due course.
2. The Group's activities, together with the factors likely to affect its future development, performance and position are set out in the Operating Review and Financial Review.
3. The Group's clients include many top contractors in the building and construction sector in the UK, Sweden, Germany, Benelux and the United States with no significant client concentration. The software products and services provided by the Group are reasonably embedded in their client's core operations and 57% (2018: 55%) of the Group's revenue is from recurring revenue contracts.
These maintenance contracts are renewed throughout the year although there is a slightly greater weighting in the fourth quarter. For these reasons, the Group has good visibility on any potential deterioration in its trading outlook and potential risk to the business. Not-withstanding the Group has net current liabilities of GBP187,000 at 31 December 2019 (2018: GBP1,518,000) these amounts are after deferred income of GBP5,862,000 (2018: GBP5,660,000) relating to annual maintenance contracts which are non-refundable. Historically, there is a low level of maintenance cancellations each year and the Board closely monitors clients that are potentially at risk of cancellation as well as the pipeline of new business.
The Group has both cash and undrawn credit facilities available to support its business operations and therefore the Board believes that the Group is well-positioned to manage the business risks. Revenue, operating profit and cash flow budgets have been prepared at business unit level. After making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in preparing its consolidated financial statements
4. The information herein has been prepared on the basis of the accounting policies adopted for the year ended 31 December 2019, set out in the Company's Annual Report and Accounts and as previously disclosed in the Company's Annual Report and Accounts for the year ended 31 December 2018.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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May 11, 2020 02:00 ET (06:00 GMT)
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