Profits jump 25% April YTD
Elecosoft said this morning that although revenues declined 3% April YTD (2% constant currency: ED estomated split -14% month vs +2% Q1’20) PBT had jumped an impressive 25% YoY – as tradeshows were postponed and less money was spent on travel, hotels, marketing & other discretionary items.Altogether, lifting year-to-date EBIT margins to circa 21% (ED estimate) vs 16.8% H1’19, and closing April with net cash of £3.1m, vs £1.1m in Dec’19.
Customers are also accelerating their own adoption of cloud & SaaS applications. Which in turn, helped to drive ELCO’s recurring revenues (re maintenance, support, SaaS) 6% higher April YTD, representing approx. 59% of the group (vs 56.8% FY19).
Looking ahead, given the more stable macro environment, we hope to reintroduce our forecasts and valuation - either in September at the interims, or perhaps at the H1 trading update in late July.
The stock at 77p appears attractively priced - trading on 2.4x 2019 EV/sales compared to typical industry multiples (pre COVID-19) of 4.0x – 7.0x. With the two closest rivals, Nemetschek & Autodesk, presently priced at >10x EV/turnover.
Autodesk is a design software and services company. The company is engaged in 3D design, engineering and entertainment software and services. The company's product offerings include: AutoCAD, which is a customizable and extensible CAD application for design, drafting, detailing, and visualization; AutoCAD Civil 3D, which provides surveying, design, analysis, and documentation solution for civil engineering; CAM Solutions, which is a computer-aided manufacturing software that provides solutions for computer numeric control machining, inspection, and modeling for manufacturing; and Inventor, which provides tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation.
Elecosoft is a provider of integrated software applications and related services to international architectural, engineering and construction marketplaces and property management industries. Co. develops its specialist software through its own development teams in Sweden, Germany and the UK. Co. services its customers directly in its primary markets of Sweden, Germany, Benelux, the U.S and the U.K and indirectly to its non-core markets through a network of channel partners.
Oracle provides products and services that address enterprise information technology (IT) environments. The company's products and services include applications and infrastructure offerings. The company's cloud and license business engages in the sale, marketing and delivery of its applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings; and its cloud license and on-premise license offerings. The company's hardware business provides Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments.
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