Alongside improvements in the underlying performance of the core business, the Group continues to expand its footprint inorganically.

Building on the divestment of the ARCON business and acquisition of BestOutcome in 2023, the Group acquired the Romanian-based Vertical Digital Group for £1.1m in April 2024. This added agile and enhanced R&D capabilities for Eleco’s innovation roadmaps as well as technical consultancy for customers. We continue to identify and actively pursue potential M&A opportunities in our chosen geographic and end-to-end customer offer.

H1 2024 builds on the improved business performance in 2023. As planned, we delivered enhanced revenue and profitability.

Recurring revenues represented 74 per cent of total revenues in the period (H1 2023: 72 per cent). ARR (Annual Recurring Revenue) was up 31 per cent to £25.8m (H1 2023: £19.7m). TRR (Total Recurring Revenue) increased by 24 per cent to £12.0m (H1 2023: £9.7m). Total revenue increased by 21 per cent to £16.3m (H1 2023: £13.5m) or 12 per cent, excluding revenue contribution from acquisitions.

Showing improved operational leverage, Adjusted EBITDA increased by 27 per cent to £3.3m (H1 2023: £2.6m), with Adjusted profit before taxation up 22 per cent to £2.2m (H1 2023: £1.8m). Adjusted EPS was 2.1 pence (H1 2023: 1.7 pence).

The Company also continues to enjoy strong cash generation, despite the Vertical Digital acquisition and an increased final dividend payment to our loyal shareholders in the period. Cash as at 30 June 2024 was £12.0m (at 30 June 2023: £9.4m; at 31 December 2023: £10.9m).

I am pleased to report that we continue to make strides to both minimise our own internal carbon footprint but also find ways to support our customers in their journey to meet Net Zero. The ESG Implementation Team is progressing internal measures and initiatives following on from our materiality assessment.

While we expanded our Great Place to Work® certifications this year, we are also undertaking further assessments of our employee offer and internal
training and progression. Likewise, we have updated some additional Group policies and work is underway to further enhance our risk-based governance framework.

We continue to invest in senior leadership roles at both Group and subsidiary company levels to support the next stage of Eleco’s journey and its scaling up ambitions.

Our employees, fostered by our Eleco-specific corporate culture, remain central to our success and achievements. On behalf of the Board, my many thanks go to them for their continued efforts, dedication and support.

Eleco has a progressive and sustainable dividend policy. In line with the continued success of the Group and its growth in profitability, the Board is again increasing the interim dividend to 0.30 pence per share (H1 2024: 0.25 pence per share), a 20 per cent uplift. This interim dividend is payable on 4 October 2024 to shareholders on the Register on 20 September 2024, and the ex-dividend date will be 19 September 2024.

We have delivered significant improvements in operational and financial business performance during H1 2024.

Our prospects are dynamic and exciting, and we are well positioned to further deliver on our strategic plans via both inorganic and organic growth. We are a high recurring revenue software business that is central to our customers’ success and delivers a level of predictable performance on behalf of our shareholders.

Looking forward, we remain confident of continued international growth and the Group continues to trade in line with market expectations for the full year 2024.