Strong H1’19 and in line with FY19 expectations
Almost every organization on the planet is busily trying to digitalize, automate and ‘smart-enable’ its operations. Not only to communicate/understand their customers & employees better, but also transform their businesses, become more efficient and vastly improve the quality of products & services.The construction & property maintenance industry is no different, yet it has traditionally been slow to embrace this new ‘paradigm’. However things are changing… and fast. Here BuildTech software developer Elecosoft said today that trading is “in line FY expectations†- with H1 revenues jumping 22% in constant currency terms (20% reported) to £12.7m (ED est), EBIT margins similar to H1’18 (ie 16.6%) and net debt closing June at a modest £0.6m (or 0.1x EBITDA) vs £2.1m in Dec’18.
What’s more, this encouraging top line growth is higher than our FY19 forecasts of +18.8% YoY (based on 5% LFL CC), and more so given we’d assumed an H2 bias due to tough comparatives and Q2’19 product launches. Going forward, we reiterate our FY19 EBIT forecast of £4.5m (margin 17.1%) on turnover of £26.4m, and likewise hold the valuation at 115p/share. Nonetheless, if this momentum is maintained, then there should be scope for upgrades as the year progresses.
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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