TIDMELCO
RNS Number : 1848Z
Eleco PLC
13 September 2022
13 September 2022
Eleco Plc
("Eleco", "Group" or "the Company")
Interim Results for the Six Months Ended 30 June 2022
The Board of Eleco plc (AIM: ELCO), the AIM-listed international
construction software specialist, is pleased to announce its
unaudited results for the six months ended 30 June 2022.
Financial Highlights
-- Recurring revenue up 9% to GBP8.2m (2021: GBP7.5m), showing delivery on our SaaS transition
-- Revenue of GBP13.4m (2021: GBP13.8m) and GBP13.8m at constant currency
-- Adjusted EBITDA* of GBP2.8m (2021: GBP3.6m)
-- Profit before tax of GBP1.7m (2021: GBP2.3m)
-- Basic earnings per share of 1.6p (2021: 2.2p)
-- Adjusted earnings per share** of 1.9p (2021: 2.6p)
-- Cash generative with free cash flow*** of GBP2.1m (2021: GBP2.8m)
-- Interim dividend of 0.20 pence (2021: 0.20 pence)
The Board remains confident in delivering in line with market
expectations for the full year
* Adjusted to exclude amortisation of intangible assets,
depreciation charge and former Directors' payments.
** Adjusted earnings per share represents adjusted profit after
tax, divided by a weighted average number of shares.
*** 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.
Operational Highlights
-- Successfully commenced phase two of the Group's SaaS
strategy, to offer subscription licences to existing customers,
thereby supporting customer success initiatives
-- Development of a new Permit to Work module for Eleco's
scalable maintenance and facilities software, ShireSystem, for
release in H2 2022. This will be a key component in assisting
customers with managing safety and compliance procedures
-- Development of the Last Planner web solution which will allow
on-site and final stage planning for customers. We plan to release
to market in 2023
-- A leading UK construction and regeneration group, Morgan
Sindall, reported how they have been using Powerproject to drive
productivity and manage modular building techniques
-- Project management specialists Treo chose Eleco's leading
project management tool, Powerproject, to manage scheduling in
their South African mining and mineral processing projects
-- Furthered ESG initiatives by becoming Carbon Neutral
-- Certified as a Great Place to Work(R) and implemented
wellbeing and personal development programmes for employees
-- Winner of the Megabuyte Quoted 25 Award for Best Performing Software Company in Industrials
Chairman, Serena Lang, said:
"Eleco delivered a positive performance in the first half of
2022, with growth in subscription revenues, a key indicator in our
transition to a SaaS business. We operate in a very exciting market
and are well positioned to meet the growing demands of the built
environment thanks to our planning and productivity-driving best in
class software.
Over the next six months, we will remain focused on growing our
recurring revenues. We are migrating all hosting to a single cloud
provider, driving connectivity across the Group, which will allow
us to scale more effectively. We continue to explore M&A
opportunities that would support our growth strategy.
Importantly, we remain well capitalised and I would like to
thank our talented team and valued customers for their support. We
remain confident of meeting market expectations for the full year
to 31 December 2022."
Details of conference call for equity analysts
There will be a webinar / conference call for equity analysts at
11:30am UK on Tuesday 13 September hosted by CEO Jonathan Hunter
and Interim CFO Rose Clark. Any equity analysts wishing to register
should contact SEC Newgate at eleco@secnewgate.co.uk where further
details will be provided.
Details of webinar for investors
As a result of the bank holiday on Monday 19 September, Eleco
announces that Jonathan Hunter and Rose Clark will now provide a
live presentation via the Investor Meet Company platform on Tuesday
20 September 2022 at 9:00am UK.
The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via your
Investor Meet Company dashboard up until 9am the day before the
meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet Eleco via:
https://www.investormeetcompany.com/eleco-public-limited-company/register-investor
Enquiries:
Eleco plc +44 (0)20 7422 8000
Jonathan Hunter, Chief Executive Officer
Rose Clark, Interim Chief Financial Officer
finnCap Limited +44 (0)20 7220 0500
Geoff Nash/ James Balicki (Corporate Finance)
Charlotte Sutcliffe / Harriet Ward (ECM)
SEC Newgate UK +44 (0)20 3757 6882
Elisabeth Cowell / Bob Huxford / Isabelle eleco@secnewgate.co.uk
Smurfit
About Eleco Plc
Eleco plc is an AIM-listed (AIM:ELCO) specialist international
provider of software and related services to the built environment
through its operating brands Elecosoft and Veeuze from centres of
excellence in the UK, Sweden, Germany and the Netherlands. The
Company's software solutions are trusted by international customers
and used throughout the building lifecycle from early planning and
design stages to construction, interior fit out, asset management
and facilities management to support project management,
estimation, visualisation, Building Information Modelling (BIM) and
property management.
Chairman's Statement
I am pleased to report that during the first half of 2022, Eleco
has once again achieved a robust performance. During a period of
significant macro-economic and geo-political upheaval and increased
pressure on overheads and talent, the business has continued to
deliver on its growth strategy.
Our strategy to focus on delivering best of breed products to
core customer segments within a selection of geographies and
transitioning our business to SaaS has generated recurring revenue
growth of 9% to GBP8.2m compared with the previous year (H1 2021:
GBP7.5m). This means that recurring revenue now accounts for
approximately 61% of total revenue, up from 55%. Eleco was also
strongly cash generative , providing us with the resilience to
navigate the inflationary pressures affecting businesses around the
world.
We have continued to invest in product development in line with
our customer-centric approach, having launched new versions of our
core building lifecycle products. We also released our Artificial
Intelligence (AI) wall tool in our visualisation business, and it
is already being well received by our paint manufacturing
customers.
Delivering on our strategy for organic growth
Overall recurring revenue at constant currency increased by 11%,
demonstrating the positive progress we are making in the delivery
of our strategy.
We previously stated that our total reported revenue growth will
temporarily soften during our SaaS transition and the financial
performance during the period is in line with our expectations. In
moving to a SaaS model, we are giving choice for our customers and
enhanced Customer Lifetime Value as well as underpinning visibility
of income for our shareholders.
We have continued to strengthen our business, achieving new
customer growth in the UK, growth in the US and strong demand in
the Swedish market, where we secured our largest deal of the year
so far. Existing customers continue to expand their software usage
and we are seeing more demand for hosted solutions.
In line with our previously announced strategy to focus on our
core customer segments and businesses, we are holding our German
ARCON architectural CAD business, for sale. This will further
streamline the business and the Board believes that the customers,
staff and product life can thrive within a business with a common
customer base and product type.
Due to geo-political factors and inflationary pressures, which
have severely impacted the timing of operational programmes for our
customers, there has been a slowdown in demand for services and
sales of new licences across Eleco's portfolio, especially in
Germany where the economy has been hit more severely by
repercussions of the invasion of Ukraine. However, the Group is
successfully absorbing these pressures thanks to our strong cash
balance, with profits remaining in line with expectations.
Overall, we have continued to increase our customer numbers and
monthly recurring revenue, making progress in our goal to become a
word-class customer-centric organisation.
Board Update and Environmental, Social and Governance (ESG)
The first half of this year saw us strengthen our ESG
disclosures. We formed an ESG committee, chaired by Mark Castle,
and set Key Performance Indicators that we are measuring against in
2022. A key element of this is to consume renewable energy across
our business, building on the 25% of our energy which currently
comes from renewable energy suppliers. We are pleased to announce
that Eleco is now carbon neutral, having offset our 2021 carbon
emissions and we will continue to focus on sustainability and
reducing our impact on the environment. Additionally, we are also
very focused on how we, as a software player can help our customer
base reduce their carbon footprint and the impact the built
environment has on sustainability.
Attraction and retention of talent continues to be a core focus
in a tight market, and we have continued to invest in our people
throughout the period, recognising that a strong, engaging culture
is key to this. We are delighted to have received the Great Place
to Work(R) certification for our UK and Swedish regions, which is
an acknowledgement of the commitment we have made to our people
initiatives.
This is a great foundation to build upon as we continue to
embrace our vision of becoming an employer people want to work with
and for. The wellbeing of our people is a key pillar of our overall
strategy and we have invested in an Employee Assistance Programme
and Employee Hub, as well as encouraging our employees to spend
time volunteering for a charitable cause.
Work continues on our policy framework, with updates to our
Whistleblowing Policy as well as the introduction of an
Anti-Slavery and Human Trafficking Policy during the first quarter.
Matters of governance remain a key focus for the Board as we build
on the changes made to its composition in the prior year, ensuring
that Eleco is stewarded by a diverse mix of views and
experience.
Our Group Leadership Team was further strengthened through the
appointment of a Chief Technology Officer and I am delighted that
in October we will welcome Neil Pritchard onto the Board as Chief
Financial Officer.
Dividend
Dividends paid in the six months to 30 June 2022 were 0.40 pence
per ordinary share (2021: 0.40 pence).
Having regard to the trading performance and cash generation in
the period, the Board has decided to declare a dividend of 0.20
pence (2021: 0.20 pence), which would be covered 8 times by
unaudited earnings for the period of 1.6 pence per share.
The interim dividend will be paid on 7 October 2022 to
shareholders on the register at the close of business on 23
September 2022 and the ex-dividend date will be 22 September
2022.
Outlook
Eleco is operating in a very exciting market and is well
positioned to meet the growing demands of the built environment
thanks to our planning and productivity-driving software.
Over the next six months, we remain focused on growing our
recurring revenues. We are migrating all hosting to a single cloud
provider, driving connectivity across the Group and allowing us to
scale more effectively.
Our people are important to the success of Eleco, and we will
build on the positive momentum we have already seen with our people
initiatives. We will continue to upskill, build career pathways and
provide a working environment that motivates, retains and attracts
new talent in what is a competitive environment.
Our strategy continues to focus on both organic recurring
revenues and profit growth, as well as exploring M&A
opportunities that will support our strategy.
Eleco delivered a positive performance in the first half of
2022, with growth in subscription revenues. Importantly we were
also able to strengthen our financial position considerably and I
would like to thank our talented team and valued customers for
their support. We are confident of meeting market expectations for
the full year to 31 December 2022.
Serena Lang
Chairman
12 September 2022
Condensed Consolidated Income Statement
for the financial period ended 30 June 2022
Six months
to 30 June
------------------------
Year
ended
2022 2021 31 December
(unaudited) (unaudited) 2021
Notes GBP'000 GBP'000 GBP'000
================================= ===== =========== =========== ===========
Revenue 3, 4 13,435 13,831 27,344
Cost of sales (1,607) (1,318) (2,754)
================================= ===== =========== =========== ===========
Gross profit 11,828 12,513 24,590
================================= ===== =========== =========== ===========
Amortisation and impairment
of intangible assets (744) (846) (2,361)
Former Directors' payments - (69) (69)
Other selling and administrative
expenses (9,290) (9,232) (18,061)
================================= ===== =========== =========== ===========
Selling and administrative
expenses (10,034) (10,147) (20,491)
================================= ===== =========== =========== ===========
Operating profit 4, 5 1,794 2,366 4,099
Finance cost 6 (61) (106) (173)
================================= ===== =========== =========== ===========
Profit before tax 1,733 2,260 3,926
Tax (394) (463) (1,195)
================================= ===== =========== =========== ===========
Profit for the financial
period 1,339 1,797 2,731
================================= ===== =========== =========== ===========
Attributable to:
Equity holders of the parent 1,339 1,797 2,731
================================= ===== =========== =========== ===========
Earnings per share (pence
per share)
Basic earnings per share 7 1.6p 2.2p 3.3p
Diluted earnings per share 7 1.6p 2.2p 3.3p
================================= ===== =========== =========== ===========
Condensed Consolidated Statement of Comprehensive Income
for the financial period ended 30 June 2022
Six months to 30 June
2022 2021 Year ended
(unaudited) (unaudited) 31 December
GBP'000 GBP'000 2021
GBP'000
================================================ ============= ============ ============
Profit for the period 1,339 1,797 2,731
================================================ ============= ============ ============
Other comprehensive income:
================================================ ============= ============ ============
Items that will be reclassified subsequently to
profit or loss:
Translation differences on foreign operations (115) (107) (258)
================================================ ============= ============ ============
Other comprehensive (loss) net of tax (115) (107) (258)
================================================ ============= ============ ============
Total comprehensive income for the period 1,224 1,690 2,473
================================================ ============= ============ ============
Attributable to:
Equity holders of the parent 1,224 1,690 2,473
================================================ ============= ============ ============
Condensed Consolidated Statement of Changes in Equity
for the financial period ended 30 June 2022
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
2022 832 2,406 1,002 (279) (5) 19,890 23,846
================ =========== ============= ============ ================ =========== ============ =============
Dividends (329) (329)
Share-based
payments - - - - 69 - 69
Elimination of
exercised
share based
payments - - - - (69) 69 -
Issue of share - - - - - - -
capital
---------------- ----------- ------------- ------------ ---------------- ----------- ------------ -------------
Transactions
with owners - - - - - (260) (260)
================ =========== ============ =============
Profit for the
period 1,339 1,339
Other
comprehensive
income:
Exchange
differences
on
translation
of net
investments
in foreign
operations - - - (115) - - (115)
---------------- ----------- ------------- ------------ ---------------- ----------- ------------ -------------
Total
comprehensive
income
for the period - - - (115) - 1,339 1,224
================ =========== ============= ============ ================ =========== ============ =============
At 30 June 2022
(unaudited) 832 2,406 1,002 (394) (5) 20,969 24,810
================ =========== ============= ============ ================ =========== ============ =============
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
2021 825 2,182 1,002 (8) (2) 17,525 21,524
Dividends - - - - - (329) (329)
Share-based
payments - - - - 40 - 40
Elimination of
exercised
share based
payments - - - - (66) 66 -
Issue of share
capital 6 218 - - - - 224
================ =========== ============= ============ ================ =========== ============ =============
Transactions
with owners 6 218 - - (26) (263) (65)
================ =========== ============= ============ ================ =========== ============ =============
Profit for the
period - - - - - 1,797 1,797
Other
comprehensive
income:
Exchange
differences
on
translation
of net
investments
in foreign
operations - - - (107) - (1) (108)
================ =========== ============= ============ ================ =========== ============ =============
Total
comprehensive
income
for the period - - - (107) - 1,796 1,689
================ =========== ============= ============ ================ =========== ============ =============
At 30 June 2021
(unaudited) 831 2,400 1,002 (115) (28) 19,058 23,148
================ =========== ============= ============ ================ =========== ============ =============
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
2021 825 2,182 1,002 (8) (2) 17,525 21,524
Dividends - - - - - (493) (493)
Share-based
payments 81 - 81
Elimination of
exercised
share based
payments (83) 83 -
Issue of share
capital 7 253 - - - - 260
================ =========== ============= ============ ================ =========== ============ =============
Transactions
with owners 7 253 - - (2) (410) (152)
================ =========== ============= ============ ================ =========== ============ =============
Profit for the
period - - - - - 2,731 2,731
Other --
comprehensive
income:
Exchange
differences
on
translation
of net
investments
in foreign
operations (270) - 12 (258)
================ =========== ============= ============ ================ =========== ============ =============
Comprehensive
income for
the period - (29) - (1) (1) 32 1
================ =========== ============= ============ ================ =========== ============ =============
Total
comprehensive
income
for the period - (29) - (271) (1) 2,775 2,474
================ =========== ============= ============ ================ =========== ============ =============
At 31 December
2021 832 2,406 1,002 (279) (5) 19.890 23,846
================ =========== ============= ============ ================ =========== ============ =============
Condensed Consolidated Balance Sheet
at 30 June 2022
30 June
2022 2021 31 December
Notes (unaudited) (unaudited) 2021
GBP'000 GBP'000 GBP'000
======================================= ====== ============== ============= ============
Non-current assets
Goodwill 15,247 15,729 15,593
Other intangible assets 9 6,713 7,140 6,554
Property, plant and equipment 728 595 717
Right-of-Use assets 1,436 1,867 1,728
Deferred tax assets 85 85 65
======================================= ====== ============== ============= ============
Total non-current assets 24,209 25,416 24,657
======================================= ====== ============== ============= ============
Current assets
Inventories 26 8 16
Trade and other receivables 3,746 3,491 4,277
Current tax assets 305 100 216
Assets of disposal group held for sale 10 842 - -
Cash and cash equivalents 10,926 12,163 10,055
======================================= ====== ============== ============= ============
Total current assets 15,845 15,762 14,564
======================================= ====== ============== ============= ============
Total assets 40,054 41,178 39,221
======================================= ====== ============== ============= ============
Current liabilities
Borrowings 11 - (1,645) (45)
Lease liabilities (402) (484) (471)
Trade and other payables (1,748) (1,446) (1,793)
Provisions - (125) (10)
Current tax liabilities - (123) -
Liabilities of disposal group held
for sale 12 (184) - -
Accruals and deferred income 13 (9,831) (9,116) (9,689)
======================================= ====== ============== ============= ============
Total current liabilities (12,165) (12,939) (12,008)
======================================= ====== ============== ============= ============
Non-current liabilities
Borrowings 11 - (2,048) (56)
Lease liabilities (1,216) (1,595) (1,464)
Deferred tax liabilities (1,837) (1,407) (1,806)
Non-current provisions (26) (41) (41)
======================================= ====== ============== ============= ============
Total non-current liabilities (3,079) (5,091) (3,367)
======================================= ====== ============== ============= ============
Total liabilities (15,244) (18,030) (15,375)
======================================= ====== ============== ============= ============
Net assets 24,810 23,148 23,846
======================================= ====== ============== ============= ============
Equity
Share capital 832 831 832
Share premium account 2,406 2,400 2,406
Merger reserve 1,002 1,002 1,002
Translation reserve (394) (115) (279)
Other reserve (5) (28) (5)
Retained earnings 20,969 19,058 19,890
======================================= ====== ============== ============= ============
Equity attributable to shareholders
of the parent 24,810 23,148 23,846
======================================= ====== ============== ============= ============
Condensed Consolidated Statement of Cash Flows
for the financial period ended 30 June 2022
Six months to 30 June
Year
ended
2022 2021 31
December
(unaudited) (unaudited) 2021
Note GBP'000 GBP'000 GBP'000
=============================================================================================================================================== =========== =========== =========
Cash flows from operating activities
Profit before tax 1,733 2,260 3,926
Net finance costs 61 106 173
Depreciation charge 271 368 722
Amortisation charge 744 846 2,361
(Profit)/Loss on sale of property, plant
and equipment (6) 3 (7)
Share-based payment charge 69 40 81
Decrease in provisions (25) - (115)
=============================================================================================================================================== =========== =========== =========
Cash generated in operations before working
capital movements 2,847 3,623 7,141
Decrease/(Increase) in trade and other receivables 498 421 (366)
Increase/(Decrease) in inventories and work
in progress (10) 14 7
Increase in trade and other payables and
accruals and deferred income 206 21 942
=============================================================================================================================================== =========== =========== =========
Cash generated in operations 3,541 4,079 7,724
Interest received/ ( paid) 38 (57) (124)
Net income tax paid (470) (360) (903)
=============================================================================================================================================== =========== =========== =========
Net cash inflow from operating activities 3,109 3,662 6,697
=============================================================================================================================================== =========== =========== =========
Investing activities
Purchase of intangible assets (902) (795) (1,727)
Purchase of property, plant and equipment (134) (60) (279)
Proceeds from sale of property, plant, equipment
and intangible assets 15 48 60
=============================================================================================================================================== =========== =========== =========
Net cash outflow from investing activities (1,021) (807) (1,946)
=============================================================================================================================================== =========== =========== =========
Financing activities
Repayment of bank loans (101) (823) (4,447)
Repayments of leasing liabilities (265) (355) (650)
Issue of share capital - 224 260
Equity dividends paid (329) (329) (493)
=============================================================================================================================================== =========== =========== =========
Net cash (outflow) from financing activities (695) (1,283) (5,330)
=============================================================================================================================================== =========== =========== =========
Net increase/(decrease) in cash and cash
equivalents 1,393 1,572 (579)
=============================================================================================================================================== =========== =========== =========
Cash and cash equivalents at beginning of
period 10,055 10,668 10,668
Effects of changes in foreign exchange rates (110) (77) (34)
=============================================================================================================================================== =========== =========== =========
Cash and cash equivalents at end of period 11,338 12,163 10,055
=============================================================================================================================================== =========== =========== =========
Cash and cash equivalents comprise:
Cash and short term deposits 10,926 12,163 10,055
Cash held for Sale 10 412 - -
11,338 12,163 10,055
=============================================================================================================================================== =========== =========== =========
Notes to the Condensed Consolidated Interim Financial
Information
1. General information
The Company is a public limited company incorporated and
domiciled in the UK. The address of its registered office is 6
Bevis Marks, London, EC3A 7BA.
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 2021 have been filed at Companies
House. The audit report was not qualified and did not contain a
reference to any matter to which the auditor drew attention by way
of emphasis 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 2022 have been prepared in accordance with
the accounting policies which will be applied in the twelve months
financial statements to 31 December 2022. These accounting policies
will be drawn up in accordance with Applicable law and UK-adopted
International Accounting Standards (UK-IAS) that are effective at
31 December 2022.
The condensed consolidated interim financial statements are
unaudited. They do not include all the information and disclosures
required in the annual financial statements or for full compliance
with UK-IAS, and therefore should be read in conjunction with the
Group's published financial statements for the year ended 31
December 2021. The comparative figures for the year ended 31
December 2021 are not the Company's statutory accounts for that
period but have been extracted from these accounts.
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.
The impending sale of a subsidiary company operating a niche
product which is no longer core to Eleco's strategy meets the
criteria for classification in accordance with IFRS 5. The assets
of the company have been presented as a disposal group held for
sale and the associated liabilities have been presented separately
on the face of the statement of financial position.
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
2021.
Risks and uncertainties
A summary of the Group's principal risks and uncertainties was
set out on pages 16 to 19 of the 2021 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 12 September
2022.
3. Revenue
Revenue disclosed in the income statement is analysed as
follows:
Six months to
30 June
============================================================ ================================ ====================
2022 2021 Year to
GBP'000 GBP'000 31 December
2021
GBP'000
============================================================ ================ ============== ====================
Licence sales 2,247 3,253 5,913
Recurring revenue 8,204 7,543 15,424
Services income 2,984 3,035 6,007
============================================================ ================ ============== ====================
13,435 13,831 27,344
============================================================ ================ ============== ====================
Revenue is recognised for each category as follows:
* Licence sales - recognised at the point of transfer
(delivery) of the licence to a customer.
* Recurring revenue : SaaS, 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.
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 licences, 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
==================================================== ================================ ====================
2022 2021 Year ended
GBP'000 GBP'000 31 December
2021
GBP'000
==================================================== ================ ============== ====================
Revenue 13,435 13,831 27,344
==================================================== ================ ============== ====================
Adjusted EBITDA 2,809, 3,649 7,251
Amortisation and impairment of purchased intangible
assets (494) (551) (1,786)
Depreciation (271) (368) (722)
==================================================== ================ ============== ====================
Adjusted operating profit 2,044 2,730 4,743
Amortisation of acquired intangible assets (250) (295) (575)
Former Directors' payments - (69) (69)
==================================================== ================ ============== ====================
Operating profit 1,794 2,366 4,099
Net finance cost (61) (106) (173)
==================================================== ================ ============== ====================
Segment profit before tax 1,733 2,260 3,926
Tax (394) (463) (1,195)
==================================================== ================ ============== ====================
Segment profit after tax 1,339 1,797 2,731
==================================================== ================ ============== ====================
Operating profit 1,794 2,366 4,099
Amortisation of intangible assets 744 846 2,361
Depreciation charge 271 368 722
Former Directors' payments - 69 69
==================================================== ================ ============== ====================
Adjusted EBITDA 2,809 3,649 7,251
==================================================== ================ ============== ====================
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
2022 2021 Year ended
GBP'000 GBP'000 31 December
2021
GBP'000
=============== ================ ============== ====================
UK 5,276 5,236 10,446
Scandinavia 3,354 3,311 6,550
Germany 2,180 2,457 4,911
USA 594 488 1,030
Rest of Europe 1,742 2,082 3,916
Rest of World 289 257 491
=============== ================ ============== ====================
13,435 13,831 27,344
=============== ================ ============== ====================
Revenue by product group represents revenue from external
customers.
Six months to 30 June
2022 2021 Year ended
GBP'000 GBP'000 31 December
2021
GBP'000
========================================== ================ ============== ====================
Revenue from software & related services:
Building Lifecycle 8,883 8,871 17,650
CAD & Visualisation 3,638 4,119 7,997
Other - third party software 914 841 1,697
13,435 13,831 27,344
========================================== ================ ============== ====================
The Group utilises resellers to access certain markets. Revenue
by sales channel represents revenue from external customers.
Six months to 30 June
2022 2021 Year ended
GBP'000 GBP'000 31 December
2021
GBP'000
========= ================ ============== ====================
Direct 12,749 13,117 26,068
Reseller 686 714 1,276
========= ================ ============== ====================
13,435 13,831 27,344
========= ================ ============== ====================
5. Operating profit
Operating profit for the period is after charging the following
items:
Six months to
30 June
==============================
2022 2021 Year ended
GBP'000 GBP'000 31 December
2021
GBP'000
================================================= ================ ============ ====================
Software product development expense 887 838 1,660
Depreciation of property, plant and equipment 98 112 213
Depreciation of Right-of-Use assets 173 256 509
Amortisation of acquired intangible assets 250 295 575
Amortisation of other intangible assets 494 551 1,150
Impairment of other intangible assets - - 636
Share based payments 69 40 81
Employer furlough scheme repayments - 135 135
(Profit)/Loss on disposal of property, plant and
equipment (6) 3 (7)
Foreign exchange losses 10 29 127
Former Director's payments - 69 69
================================================= ================ ============ ====================
6. Net finance cost
Finance income and costs disclosed in the income statement is
set out below:
Six months to 30 June
2022 2021 Year ended
GBP'000 GBP'000 31 December
2021
GBP'000
============================================ ================ ============ ====================
Finance costs:
Bank overdraft and loan interest (1) (73) (110)
Interest expense for leasing arrangements (60) (33) (63)
============================================ ================ ============ ====================
Total net finance cost (61) (106) (173)
============================================ ================ ============ ====================
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
2022 2021 Year to 31 December
2021
----------------------------------------- ---------------------------------------- ---------------------------------
Profit Weighted Profit Weighted Profit Weighted
attributable average attributable average attributable average
to number to number to number of
of of
shareholders shares EPS shareholders shares EPS shareholders shares EPS
(GBP'000) (millions) (p) (GBP'000) (millions) (p) (GBP'000) (millions) (p)
=============== ============ ========== ====== ============= ========== ===== ============== ============ ===
Basic earnings
per share 1,339 82.2 1.6 1,797 82.0 2.2 2,731 82.0 3.3
Diluted
earnings
per share 1,339 82.7 1.6 1,797 82.8 2.2 2,731 82.9 3.3
Adjusted
earnings
per share 1,541 82.2 1.9 2,092 82.0 2.6 3,253 82.0 4.0
=============== ============ ========== ====== ============= ========== ===== ============== ============ ===
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 15.
8. Dividends
Dividends paid in the six months to 30 June 2022 were 0.40 pence
per ordinary share (2021: 0.40 pence per ordinary share).
Cash dividends of GBP329,000 (2021: GBP329,000) were paid in the
six months to 30 June 2022 as follows:
Six months to 30 June Year to 31
December
====================================== ==================
2022 2022 2021 2021 2021 2021
Ordinary Shares per share GBP'000 per share GBP'000 per share GBP'000
============================= ========= ======= ========= ======= ========= =======
Declared and paid during the
year
Interim - current year - - 0.20 164 0.20 164
Final - previous year 0.40 329 0.40 329 0.40 329
============================= ========= ======= ========= ======= ========= =======
0.40 329 0.60 493 0.60 493
============================= ========= ======= ========= ======= ========= =======
The Directors have recommended an interim dividend of 0.20 pence
per ordinary share (2021: 0.20 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 2022 represent purchased
intangible assets of GBP164,000 (2021 half year: GBP5,000) and
internal development costs capitalised of GBP738,000 (2021 half
year: GBP790,000). Internal development relates to software
development projects that meet the accounting policy criteria for
capitalisation.
10. Assets of disposal group held for sale
In line with our previously announced strategy to focus on our
core customer segments and businesses, we are holding our German
ARCON architectural CAD business, for sale. IFRS 5 disclosure
treatment is adopted here.
The table below reflects assets held for sale measured at the
lower of carrying amount and fair value less costs to sell in the
statement of financial position.
Assets Held for
Sale Six months to 30 June Year Ended
2022 2021 31 December
(unaudited) (unaudited) 2021
GBP'000 GBP'000 GBP'000
--------------------------- ------------ ------------ ------------
Goodwill 336 - -
Other intangible
assets 1 - -
Property, plant
and equipment 9 - -
Right-of-Use assets 74 - -
Trade and other
receivables 10 - -
Cash and cash equivalents 412 - -
---------------------------- ------------ ------------ ------------
Total Assets Held
for sale 842 - -
---------------------------- ------------ ------------ ------------
11. Cash and borrowings
The net cash position of the Group as at 30 June 2022 is set out
below:
At 30 June At
31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
================================= ================ ============== ================
Cash and cash equivalents 11,338 12,163 10,055
Bank loans - (3,693) (101)
Lease liabilities (1,693) (2,079) (1,935)
================================= ================ ============== ================
9,645 6,391 8,019
================================= ================ ============== ================
Maturity profile of borrowings
In one year or less - (1,645) (45)
Between one and two years - (1,645) (56)
Between two and five years - (403) -
================================= ================ ============== ================
- (3,693) (101)
================================= ================ ============== ================
The UK banking facilities are with Barclays Bank plc and the
Group facilities comprise a GBP1.0m overdraft facility, carrying an
interest rate of 2.75 percent over base rate (undrawn at 30 June
2022, 31 December 2021 and 30 June 2021).
12. Liabilities of disposal group held for sale
Liabilities classified as Held for sale on the face of the
Statement of Financial Position are as follows:
Liabilities Held Year
for Sale Six months to 30 June Ended
2022 2021 31 December
(unaudited) (unaudited) 2021
GBP'000 GBP'000 GBP'000
----------------------- ------------ ------------ ------------
Lease liabilities (76) - -
Trade and other
payables (53) - -
Accruals and deferred
income (55) - -
------------------------ ------------ ------------ ------------
Total Liabilities
held for sale (184) - -
------------------------ ------------ ------------ ------------
13. Accruals and deferred income
At 31
At 30 June December
================ =============
2022 2021 2021
GBP'000 GBP'000 GBP'000
================ ============= ================
Accruals 2,570 2,255 2,603
Deferred income 7,261 6,861 7.086
================ ================ ============= ================
9,831 9,116 9,689
================ ================ ============= ================
Deferred income represents income from the sale of software
subscription licenses and 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.
14. 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 period, other than a result of service
agreements.
15. Additional performance measures
The Group uses adjusted figures, which are not defined by
generally accepted accounting principles ("GAAP") such as UK-IAS.
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 UK-IAS financial measures, in
evaluating the operating performance of the Group.
Six months to 30 June
2022 2021 Year ended
GBP'000 GBP'000 31 December
2021
GBP'000
=========================================== ================ ============= ====================
Operating profit 1,794 2,366 4,099
Former Directors' payments - 69 69
Amortisation of acquired intangible assets 250 295 575
=========================================== ================ ============= ====================
Adjusted operating profit 2,044 2,730 4,743
=========================================== ================ ============= ====================
Profit before tax 1,733 2,260 3,926
Former Directors' payments - 69 69
Amortisation of acquired intangible assets 250 295 575
=========================================== ================ ============= ====================
Adjusted profit before tax 1,983 2,624 4,570
=========================================== ================ ============= ====================
Tax charge (394) (463) (1,195)
Former Directors' payments - (13) (13)
Amortisation of acquired intangible assets (48) (56) (109)
=========================================== ================ ============= ====================
Adjusted tax charge (442) (532) (1,317)
=========================================== ================ ============= ====================
Profit after tax 1,339 1,797 2,731
Former Directors' payments - 56 56
Amortisation of acquired intangible assets 202 239 466
=========================================== ================ ============= ====================
Adjusted profit after tax 1,541 2,092 3,253
=========================================== ================ ============= ====================
Cash generated in operations 3,541 4,079 7,724
Purchase of intangible assets (902) (795) (1,727)
Purchase of property, plant and equipment (134) (60) (279)
Former Directors' payments - 69 69
=========================================== ================ ============= ====================
Adjusted operating cash flow 2,505 3,293 5,787
=========================================== ================ ============= ====================
Six months to
30 June
===============================
2022 2021 Year ended
GBP'000 GBP'000 31 December
2021
GBP'000
=============================== ================ ============= ====================
Adjusted operating cash flow 2,505 3,293 5,787
Net interest received/ ( paid) 38 (57) (124)
Tax paid (470) (360) (903)
Proceeds from disposal of PPE 15 48 60
Former Directors' payments - (69) (69)
=============================== ================ ============= ====================
Free cashflow 2,088 2,855 4,751
=============================== ================ ============= ====================
16. Exchange rates
The following exchange rates have been applied in preparing the
condensed consolidated financial statements:
Income statement Balance sheet
Six months to As at 30 June Year to 31
30 June December 2021
==================
Income Balance
2022 2021 2022 2021 Statement sheet
========================== ======== =========== ========== ===== ========= =======
Swedish Krona to Sterling 12.41 11.68 12.45 11.82 11.80 12.23
Euro to Sterling 1.19 1.15 1.16 1.17 1.16 1.19
US Dollar to Sterling 1.30 1.39 1.22 1.38 1.37 1.35
========================== ======== =========== ========== ===== ========= =======
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