Audited Results for the Year Ended 31 December 2020.

Executive Chairman’s statement

The year under review has shown Eleco’s resilience during a period of uncertainty, with profit before tax and net cash both improving in a meaningful way. I am extremely proud of the way our colleagues responded to the Covid-19 pandemic and continue to do so. I am also grateful to our customers for their willingness to embrace new ways of working with us, especially for services that are traditionally face-to-face such as training and consultancy. This enabled us to prioritise the health and wellbeing of our employees, customers, resellers and suppliers whilst playing our part in reducing the spread of the virus.

+ 1 9 %
Operating profit
+ 1 12 %
Profit before tax
+ 1 18 %
Basic earnings per share

Executive Chairman’s statement continued…

In March 2020, we closed all offices and implemented home working for all our employees. Not knowing what the impact of the pandemic was likely to be on our business we quickly put in place tighter financial controls and cost management whilst ensuring that our focus remained on our customers. There was an immediate financial impact on training and services which ground to a halt when the countries in which we operate went into lockdown, leading us to furlough a small proportion of staff for Q2. The teams quickly moved to on-line training in small blocks with good uptake but much lower revenues and as the year progressed our team and our customers worked together to embrace changing delivery of training fully to on-line and our furloughed staff were quickly returned to working.

Despite the unprecedented disruption to businesses worldwide, overall revenues were in line with the prior year, recurring revenues were at 56 per cent (2019: 53 per cent) and profit before tax was up 12 per cent on 2019 at £3.9m. We also improved our net cash position from £1.1m as at 31 December 2019 to £6.2m at 31 December 2020, all of which puts the Company in a strong position to drive its growth strategy. Based upon these results, the Board has taken the decisions to repay furlough payments that are possible to be repaid. This is £98,000 furlough repayments of the £150,000 which will be repaid in the coming months.

The Company’s resilience in these challenging times is testament to the dedication and commitment of the whole team at Eleco and I am hugely grateful for their hard work and dedication, especially during these difficult times when they have worked tirelessly to support our customers whilst managing the impact of Covid-19 on them personally.

Financial highlights
  • Revenues are in line with last year at £25.2m (2019: £25.4m)
  • Recurring revenues increased to 56% (2019: 53%) (includes maintenance, support, subscription and SaaS revenue)
  • Reported operating profit up 9% to £4.2m (2019: £3.8m)
  • Profit before tax up 12% to £3.9m (2019: £3.5m)
  • Reported basic earnings per share up 18% to 3.9p (2019: 3.3p)
  • Adjusted operating profit* up 12% to £5.1m (2019: £4.5m)
  • Adjusted basic earnings per share* up 17% to 4.8p (2019: 4.1p)
  • Free cash flow** up 36% to £5.5m (2019: £4.1m)
  • Net cash £6.2m, with £10.7m cash at year end (2019: £1.1m net cash)
  • Final recommended dividend of 0.40p
Operational highlights
  • Continued to expand our customer base and maintained high customer retention levels.
  • Transitioned the global workforce to home working in the face of Covid-19 restrictions. Continued our daily business and customer support and training without any disruption to customers.
  • Released our ShireSystem Wallboard leading performance indicator module which visually shares relevant, actionable data with a number of stakeholders.
  • Continued to invest in the development of Memmo, our SaaS site management software which received a positive response with both new and existing customers in our Swedish markets.
  • Released Powerproject subscription licencing.
  • Released the first version of Bidcon Connect enabling customers to get read access to estimations in the cloud.
  • Winner of best ‘Project Management Software of the Year’ of the seventh consecutive year at the UK Construction Computing Awards.
Proposed Dividend

In light of Eleco’s resilient trading performance and cash generation in 2020, the Board has decided to recommend a final scrip dividend of 0.40 pence per share, with a cash alternative dividend of 0.40 pence per share.

Payment of the final dividend will follow approval by shareholders at the Annual General Meeting.  The record date is the close of business on 14 May 2021; the ex-dividend date will be 13 May 2021.

Outlook

The start to trading this year has been strong, with revenues for the two months to February 4 per cent higher than the equivalent, pre-Covid-19 period in 2020.

We are confident that our business will begin to bear the fruit of its new refined vision and strategy over the next 12 months and beyond. Market trends are in our favour, providing strong tailwinds for our future growth and, as a cash generative, IP backed, award-winning provider of software solutions to the construction and built environment sectors, we have a strong foundation for future growth. We look forward to updating the market in respect to our execution milestones, including progress with R&D, international expansion and extending our management team.

Importantly, the market opportunity for Eleco is compelling; the markets we serve are experiencing an accelerated adoption of technology due to the pandemic, rising material costs and increased regulation. The strong start to trading that we have experienced since the beginning of 2021 attests to this. With a strong customer base and a high level of recurring revenue, we look to 2021 and beyond with confidence and to building further shareholder value.