‘Grow baby grow…’
Eleco delivered ‘in line’ results today, posting adjusted EBITDA & EPS of £7.2m & 4.0p respectively on record turnover up 8.4% to £27.3m (+7.7% vs FY19). This was further bolstered by 100% cash conversion (£4.75m, representing a 5.7% yield), whilst ending the period with a hefty £10m net cash balance (12p/share) – even after spending 12% of revenues on R&D.Eleco’s award winning applications are being increasingly adopted by construction firms, asset/property managers, manufacturers and retailers everywhere.
Consequently given the strong industry tailwinds and positive start to 2022, we’ve held our FY22 forecasts (re adjusted PBT £2.9m & turnover £27.6m), and have a 150p/share valuation. Plus at 100p, Eleco trades on modest 2022 EV/sales & EV/EBITDA multiples of 2.7x and 11.8x respectively, equivalent to a wide discount vs BuildTech peers.
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.
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