UK's Eleco H1 revenue rises 8% amid portfolio changes

By Reuters News


Overview

  • UK built environment software provider's H1 revenue rose 8% yr/yr

  • Adjusted basic EPS for H1 climbed 85% yr/yr

  • Company will not declare further dividends before Avocet Bidco acquisition completes


Outlook

  • Company says no further dividends will be paid prior to Avocet Bidco acquisition becoming effective

  • Eleco says it is well positioned to harness positive industry drivers and pursue organic growth

  • Company will continue to evaluate select acquisition opportunities to enhance market position


Result Drivers

  • RECURRING REVENUE - Record recurring revenue accounted for 85% of total H1 revenue, with organic growth of 20%, per CEO Jonathan Hunter

  • PORTFOLIO CHANGES - Divestment of Veeuze business improved earnings quality, per CEO Jonathan Hunter

  • TECHNOLOGY INNOVATION - New product releases and expanded use of AI supported customer retention and expansion, per CEO Jonathan Hunter


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

H1 Revenue

GBP 19.86 mln

H1 EBIT

GBP 4.003 mln

H1 Gross Profit

GBP 17.68 mln

H1 Pretax Profit

GBP 5.16 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the software peer group is "buy"

  • Wall Street's median 12-month price target for Eleco PLC is GBp205.00, about 10.5% below its September 14 closing price of GBp229.00

  • The stock recently traded at 30 times the next 12-month earnings vs. a P/E of 18 three months ago


Reuters Recommended Reads

  • Sept 14 - UK's Keystone Law interim revenue rises 22.5% yr/yr

  • Sept 14 - UK's GlobalData half-year revenue rises on acquisitions

  • Sept 14 - Microsoft drafts code of conduct to keep its AI under human control


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