Long term winner in new social distancing world
Today Elecosoft reports that 2019 turnover and adjusted PBT were “significantly higher†(ED £25.3m & £4.1m) than last year. With a robust balance sheet and high recurring revenues, they're well placed to cope with the uncertainty introduced by COVID-19.Results have seen a marginal impact towards the end of Q1, and given the uncertainty of timing, the Board has decided to suspend the final dividend, and remove any indications of future performance from today’s pre-close statement.
In terms of valuation, the stock is attractively priced for patient risk tolerant investors - trading on a trailing EV/Sales multiple of 1.6x (see below) compared to typical industry multiples pre COVID-19 crisis of between 4.0x – 6.0x.
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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