TIDMELCO
RNS Number : 0814M
Eleco PLC
12 September 2023
12 September 2023
Eleco Plc
("Eleco", the "Group" or the "Company")
Interim Results for the Six Months Ended 30 June 2023:
Recurring Revenue up 18%
Eleco plc (AIM: ELCO), the specialist software provider for the
built environment, has published its results for the six months
ended 30 June 2023, based on unaudited management accounts:
Financial highlights:
-- Annualised Recurring Revenue (ARR)(1) up 18% to GBP19.7m (at
30 June 2022: GBP16.7m); organic ARR growth of 24%
-- Total Recurring Revenue (TRR) up 18% to GBP9.7m (H1 2022:
GBP8.2m), representing 72% of total revenue (H1 2022: 61% of total
revenue); organic TRR growth of 21%
-- Revenues slightly ahead of expectations at GBP13.5m (GBP13.6m
in constant currency terms) (H1 2022: GBP13.4m) despite products'
end-of-life, and business disposal. Excluding these, revenues were
5% ahead organically, following the effects of the SaaS
transition
-- EBITDA (2) of GBP2.2m (H1 2022: GBP2.8m)
-- Adjusted EBITDA(3) of GBP2.6m (2022: GBP2.9m) as anticipated
-- Profit Before Taxation GBP1.3m (H1 2022: GBP1.7m)
-- Adjusted Profit Before Taxation(4) GBP1.8m (H1 2022: GBP2.0m)
-- Basic EPS of 1.2 pence per share (H1 2022: 1.6 pence per share)
-- Adjusted EPS(5) of 1.7 pence per share (H1 2022: 1.9 pence per share)
-- Cash at 30 June 2023 GBP9.4m (GBP11.3m at 30 June 2022;
GBP12.5m at 31 December 2022) after acquisition payment of
GBP3.6m
-- Interim dividend up 25% to 0.25 pence per share (H1 2022: 0.20 pence per share)
Operational highlights:
-- Execution of M&A strategy:
o Acquisition of profitable SaaS business, BestOutcome - a
leading UK provider of simple, scalable Project Portfolio
Management (PPM) software , to complement Building Lifecycle
products and broaden Eleco's customer base
o Profitable disposal of non-core German architectural CAD
business
-- Strategic partnerships announced with:
o C-Tech Club, partnerships with innovative construction
technology start-ups
o Nodes & Links, to bring AI into the world of construction
planning
-- Return of Asta brand, drawing on our innovation heritage
-- On-going improvements in ESG initiatives such as
environmental data gathering and monitoring; enhanced scores with
our Great Place to Work(R) certifications, and implemented training
and updated group policy framework for all employees
-- Elecosoft UK obtained ISO 27001 certification in continued
commitment to customer data security
Jonathan Hunter, Chief Executive Officer of Eleco plc said:
"We are extremely well-positioned within our markets with an
established loyal customer base, world-class technology, positive
market growth trends and drivers, and a clear customer-focussed
growth strategy. We are very pleased with our recent acquisition of
BestOutcome, which, through its integration into the Eleco family,
strengthens the existing Building Lifecycle offering and further
builds our SaaS recurring revenue portfolio with a wider, more
diverse customer base. We shall continue to identify appropriate
acquisitions that will widen our customer base, complement our
technological innovation, extend our geographic capabilities, and
further enhance our recurring revenues and overall financial
performance.
"Eleco is fundamentally delivering on its SaaS strategy which
will bring further significant operational and financial benefits.
We remain focussed on the continued growth of organic recurring
revenues, supplemented by further inorganic growth opportunities.
We are confident in continued progress and positive momentum for
the future, underpinned by our current trading tracking in line
with management's expectations for the full year."
The Company also announces that its nominated adviser and broker
finnCap Ltd, has changed its name to Cavendish Capital Markets
Limited.
(1) ARR is defined as normalised annualised recurring revenues
and includes revenues from subscription licences, contract values
of annual support and maintenance, and SaaS contracts.
Normalisation is calculated using the recurring revenue in the
final month of the period, multiplied by twelve. This ARR figure is
calculated prior to the inclusion of the forthcoming contribution
from the BestOutcome Ltd acquisition.
(2) EBITDA is defined as Earnings before Interest, Taxation,
Depreciation, Amortisation and Impairment of Intangible Assets.
This includes the gain on disposal of the ARCON business in H1
2023. See note 14.
(3) Adjusted EBITDA is adjusted for acquisition related expenses
and amortisation of acquired intangibles. See note 14.
(4) Adjusted profit before tax is adjusted for acquisition
related expenses and amortisation of acquired intangibles. See note
14.
(5) Adjusted earnings per share represents profit after tax as
adjusted for acquisition related expenses and amortisation of
acquired intangibles, divided by a weighted average number of
shares. See note 7 and note 14.
(6) Organic refers to the underlying financials after adjusting
for revenues from the disposed ARCON business and for adjusting for
the ending of life of several products.
For further information, please contact:
Eleco plc +44 (0)20 7422 8000
Jonathan Hunter, Chief Executive Officer
-------------------------
Neil Pritchard, Chief Financial Officer
-------------------------
Cavendish Capital Markets Limited (previously finnCap Limited) +44 (0)20 7220 0500
-------------------------
Geoff Nash/ Emily Watts/ Seamus Fricker (Corporate Finance)
-------------------------
Charlotte Sutcliffe/ Harriet Ward (ECM)
-------------------------
SEC Newgate UK +44 (0)20 3757 6882
-------------------------
Elisabeth Cowell/ Bob Huxford eleco@secnewgate.co.uk
-------------------------
About Eleco plc
Eleco plc is an AIM-listed (AIM: ELCO) specialist international
provider of software and related services to the built environment
through its operating brands Elecosoft, BestOutcome and Veeuze from
centres of excellence in the UK, Sweden, Germany, the Netherlands
and the USA.
The Group's software solutions are trusted by international
customers and used throughout the building lifecycle from early
planning and design stages to construction, interior fit out, asset
management and facilities management to support project management,
estimation, visualisation, Building Information Modelling (BIM) and
property management.
For further information please visit www.eleco.com
Chairman's Statement
Introduction
In an era of increased global instability and macroeconomic
headwinds, it is pleasing to report, in this first statement in my
capacity as Interim Chair, that Eleco continues to execute on its
strategy and deliver stable, more predictable and growing recurring
revenues as it successfully navigates through its SaaS
transition.
Eleco, alongside its customer centricity, continues to benefit
from international industry trends and drivers, such as
digitalisation and the incorporation of Artificial Intelligence
(AI) to improve productivity, the reduction of waste and carbon
footprint, efficient delivery models across the lifecycle utilising
greater data collaboration and integration.
Performance and future
Recurring revenue in the first half grew by 18 per cent to
GBP9.7m (H1 2022: GBP8.2m) and now accounts for 72 per cent of
total revenue (H1 2022: 61 per cent of total revenue). This
significant uplift in performance emphasises the benefits in our
SaaS transition. Similarly, annualised recurring revenues increased
by 18 per cent to GBP19.7m (H1 2022: GBP16.7m). Revenue was
slightly ahead of forecast, despite the absence of revenue from a
number of Swedish-based end-of-life products and a planned
disposal. Profitability was in line with management's
expectations.
For the full year 2023, we expect to see revenues in line with
our plan and as a result of the SaaS transition, longer term
sustainable growth and overall shareholder returns coming
through.
Strategic progress
These organic developments and overall prospects have been
supplemented by progress in other corporate activity. In February
2023, we sold the ARCON architectural CAD business, enabling
increased focus on our core Building Lifecycle businesses.
In June 2023, we acquired a UK provider of easy-to-use, scalable
Project Portfolio Management (PPM) software for a net consideration
of GBP3.6m. The value enhancing addition of the BestOutcome
business broadens our customer base and provides potential extended
cross fertilisation of solutions to our existing customers.
Environmental, Social and Governance (ESG)
As Chair of our ESG Committee, I am keen to ensure that Eleco is
at the forefront of initiatives that deliver on and fulfil our
important responsibilities and ESG commitments. Having adopted a
balanced scorecard approach, environmentally, we are measuring our
performance against KPIs, building on the short-term objective of
our Net Zero carbon offset. Internal measures continue to minimise
our own footprint and we are looking at other ways to assist our
customers' ability to measure and reduce their own emissions.
Socially, we have been building our Employee Value Proposition,
internal management training, and Eleco's impact in the community
through volunteering and wellness initiatives. We were pleased to
achieve higher scoring in the Great Place to Work(R) certifications
this year, deepening the bonds within and across the Group. Also,
in Governance, new Group policies are being progressively and
regularly rolled out to employees via an internal training
platform.
Dividend
Having regard to both the organic and inorganic needs of the
business and recent performance, the Board is increasing the
interim dividend by 25 per cent to 0.25 pence per share (H1 2022:
0.20 pence per share), payable on 6th October 2023 to shareholders
on the Register on 22 September 2023, and the ex-dividend date will
be 21st September 2023.
Employees
The key to any successful business, and our biggest asset, is
our people; the management and colleagues without whom the Group
cannot achieve the success it strives for. We are very fortunate in
having highly dedicated, talented and hardworking colleagues across
the world. On behalf of the Board, I wish to express my thanks for
their continued efforts and their support.
Board updates
We are currently at an advanced stage of recruiting a new Chair
and an Independent Non-Executive Director who will in turn become
Chair of the Audit & Risk Committee. Announcements on these two
roles are expected to be forthcoming prior to the year end.
Current trading and outlook
The Group's transformation to a high recurring revenue, SaaS
driven business is now well advanced and entering a new phase that
will bring further significant operational and financial
benefits.
We are confident that we will continue to weather economic and
market headwinds given our clearly defined and executed strategy
for growth. Our technological solutions help our customers drive
efficiencies in these challenging environments.
We continue to deliver organic growth and accelerate delivery of
our plan via complementary acquisitions that enable us to scale up
and exploit market opportunities.
We are well positioned to grow our international markets and see
continued progress and positive momentum for the future with
current trading in line with our internal expectations for the full
year.
Mark Castle
Interim Non-Executive Chairman
11 September 2023
Chief Executive's Statement
Introduction
We are encouraged by Eleco's trading performance for the first
six months of the financial year, in which we have continued to
deliver on our strategy. We previously flagged that H1 2023 would
be the low point of the temporary financial impact of the SaaS
transition. However, we are pleased to report we have grown
compared to H1 2022.
Despite continued macroeconomic pressures, which have negatively
impacted revenue streams, we remain resolute in our focus on our
growth strategy and delivery of business performance and in our
ambition to be the world-class, global leader in software for the
built environment. Building on the H1 2023 milestone of the SaaS
transition, we believe we have the people, technology, know-how and
culture to further execute on this successful journey.
Strategy and strategic developments
Eleco's vision is to solve the challenges of the built
environment for our customers through digital transformation. We do
this by providing best-of-breed software and living by our core
values, such as collaboration, excellence and customer-centricity:
in short, we aim to be our customers' trusted, proven technology
partner. The SaaS transition is but one major change in our
transformational journey. Artificial intelligence (AI) is another:
AI capabilities will provide greater reliability and programme
forecasting whilst improved risk management will reduce the time
and cost overruns that continue to impact projects, in turn
improving productivity.
The Group has a strong pedigree within an industry that is
currently increasing data adoption from historically low levels.
This is a long-term underlying trend to meet the demands of
population growth on housing and infrastructure, environmental
needs and targets, increased regulation and compliance, the need to
reduce time, cost and waste, modularised formats, data sharing, 4D
Building Information Modelling (BIM) demands and more. The growth
strategy is therefore focussed on go-to-market initiatives to
further develop the awareness of Eleco's best technical
capabilities, meeting the needs of customers and accordingly
delivering digital transformation.
Eleco's customer-focussed approach extends beyond simply knowing
the many inputs of a project; we understand what our customers are
seeking to achieve with their digital transformation and how
planning, estimating and maintenance management can be adjusted to
ensure they stay on course. This understanding informed strategic
decision to acquire BestOutcome in June 2023, providing greater
opportunities for our customers and widening our total addressable
market.
BestOutcome is a profitable, high quality SaaS business and
leading UK provider of easy-to-use, highly configurable, scalable
Project Portfolio Management (PPM) software. It strengthens our
Building Lifecyle portfolio in line with Eleco's growth strategy to
enhance its predictable recurring revenue (alongside our SaaS
transition) and to invest in synergistic software products and
technologies. The incumbent directors and owners of BestOutcome
have reinvested profits into doubling its world-class development
team over the last few years, enabling a highly secure and
practical solution for planning and managing programmes for
customers in public and private sectors. The integration process is
already progressing well.
During H1 2023, Eleco sold Eleco Software GmbH, the German
'ARCON' architectural CAD business, a non-core operation.
Business developments, operations and performance
We revisited our growth strategy in the US and reinitiated our
approach to direct sales in April, targeting general contractors in
the US and while our resellers commenced the SaaS transition. The
customer interest and increased level of new customers provided
confidence to incrementally investing in our US operation,
introducing marketing and sales resources in Q2 and a finance
resource in Q3.
The Group is proud to partner with the C-Tech Club - a
networking group of over 386 founders and CEOs of construction
technology start-ups - and in May 2023, we sponsored the C-Tech
Start-Up Village at the Digital Construction Week (DCW) 'Innovation
in the Built Environment' event in London's Excel Centre.
At DCW, we announced the reintroduction of the widely recognised
and respected Asta product brand in response to customer feedback
and in conjunction with the release of the lean planning module,
Asta Connect, and Version 17 of Asta Powerproject. Asta now covers
the whole suite of broader project scheduling solutions from
end-to-end visibility of project changes and progress reporting
across organisations and locations, to on-site task updates.
The Leadership team continued to evolve our technology roadmap
to drive targeted M&A search and to continue to steer our
investment in our innovative software solutions. Several product
development initiatives are underway, including those focusing on
document and data management, our customer portal, the Elecoverse,
as well as modularisation and enhancements in our core
offerings.
Though we have been using Artificial Intelligence (AI) and
Machine Learning (ML) in a number of our solutions for many years,
for example in our Veeuze visualisation configurators, we have
entered a new phase in this development. We have recently entered
into a strategic partnership with Nodes & Links where we will
draw upon their cumulative AI investments to offer enhanced
functionality as a next-gen enabler to our mutually held
end-customers.
We are also pleased that Elecosoft has obtained the sought-after
ISO 27001/27002 certifications in its continued commitment to
customer data security in the UK. ISO 27001 Information Security
Management standard (ISMS) details the requirements for businesses
to securely manage information assets and data to an
internationally recognised standard and 27002 has the detailed
controls that back this up. It provides a robust approach for
managing assets such as customer and employee details, intellectual
property, financial information, third-party data, and reducing the
risks of breaches and cybercrime.
As previously highlighted, many companies in SaaS transitions
see significant reductions in revenues, but the Group broadly
maintained revenues and in this first half of 2023, delivered a
slight increase over H1 2022. Total recurring revenues increased by
18 per cent (H1 2022: 9 per cent; and against 10 per cent for 2022
as a whole). Annualised recurring revenues at 30 June also grew 18
per cent; organic growth rates for continuing operations' for the
period showed a 21 per cent rise for total recurring revenue and 24
per cent increase for annualised recurring revenue.
These revenue growth levels are testament to the strength of our
customer software offerings. Within this total, we have seen a
reduction in service revenues due to macroeconomic market
pressures, which has caused purchasing delays in particular with
our CAD and Visualisation solutions. Revenues in Germany have
reduced following the disposal of our non-core German ARCON
business in February 2023. Furthermore there was a reduction in
Scandinavian revenues from the planned impact of the end-of-life of
the Group's Memmo and Sitecon products, and the announced
end-of-life of a third-party product resold in Sweden.
The move by our customers from upfront and one-off perpetual
licences to high-quality subscription and SaaS licences where
revenues are recognised over time, set against an operating cost
base subject to current inflationary factors, impacted
profitability, as anticipated. Nevertheless, with the benefit of
the profit on disposal of the ARCON business, Adjusted Profit
Before Taxation of GBP1.8m, adjusted for acquisition costs and
share based payments was as anticipated (H1 2022: Adjusted Profit
Before Taxation of GBP2.0m). With a lower tax charge, Adjusted
earnings per share was 1.7 pence per share (H1 2022: 1.9 pence per
share).
Underlying cash generation remains strong, despite the impact of
the SaaS transition, with free cash flow of GBP1.8m (H1 2022:
GBP2.1m). The overall cash balance of GBP9.4m (GBP11.3m at 30 June
2022; GBP12.5m at 31 December 2022) is after a net cash
consideration for BestOutcome of GBP3.5m and an increased final
dividend and one-off special dividend payments made in the first
half totalling GBP0.9m (H1 2022: GBP0.3m).
Appointments
We were pleased to welcome David Hughes as Regional Managing
Director, UK in March of this year, with his extensive background
in go-to-market and customer success through SaaS transitions,
drawing on his time as Managing Director at Excitech, the former
largest Autodesk reseller in the UK.
Mark Chapman also joined as Head of Innovation in April of this
year, bringing with him a wealth of experience as a construction
technology innovator and leader, with almost 30 years of planning
and delivering civil, building, rail and marine projects
internationally, as well as advising companies of all sizes on the
wider adoption of digital technology.
Summary
We continue to successfully execute on our growth strategy. We
are the trusted technology partner for our customers, who
increasingly look to us to help them solve their challenges and
provide certainty for the built environment. I am proud of our
world-class team of talented colleagues, their energy, collective
culture, enthusiasm and determination to drive our success into the
future. Eleco is a "Great Place to Work".
Although some customers are belt-tightening due to macroeconomic
pressures, we are extremely well-positioned within our markets with
an established and loyal customer base, outstanding technology,
positive market growth trends and drivers, and a clear
customer-focussed growth strategy. We are very pleased with our
recent acquisition of BestOutcome, which, through its integration
into the Eleco family, strengthens the existing Building Lifecycle
offering and further builds our SaaS recurring revenue portfolio
with a wider, more diverse customer base. We shall continue to
identify appropriate acquisitions that will strengthen our customer
relationships, complement our technological innovation, extend our
geographic capabilities, and further enhance our recurring revenues
and overall financial performance.
Eleco is fundamentally delivering on its SaaS strategy which
will bring further significant operational and financial benefits.
We remain focussed on the continued growth of organic recurring
revenues, supplemented by further inorganic growth opportunities.
We are confident in continued progress and positive momentum for
the future, underpinned by our current trading tracking in line
with expectations for the full year.
Jonathan Hunter
Chief Executive Officer
11 September 2023
Condensed Consolidated Income Statement
for the financial period ended 30 June 2023
Six months to 30 June Year ended
2023 2022 31 December
(unaudited) (unaudited) 2022
Notes GBP'000 GBP'000 GBP'000
================================================= ====== ============= ============ ===========
Revenue 3, 4 13,486 13,435 26,566
Cost of sales (1,440) (1,607) (3,087)
==================================================== ====== ============= ============ ===========
Gross profit 12,046 11,828 23,479
==================================================== ====== ============= ============ ===========
Amortisation and impairment of intangible assets (844) (744) (1,596)
Acquisition expenses and stamp duties (262) - -
Share-based payments (148) (69) (201)
Other selling and administrative expenses (9,722) (9,221) (18,699)
==================================================== ====== ============= ============ ===========
Selling and administrative expenses (10,976) (10,034) (20,496)
==================================================== ====== ============= ============ ===========
Operating profit 4, 5 1,070 1,794 2,983
Finance income / (expense) 6 35 (61) (39)
Gain on business disposal 16 150 - -
==================================================== ====== ============= ============ ===========
Profit before tax 1,255 1,733 2,944
Tax (236) (394) (549)
==================================================== ====== ============= ============ ===========
Profit for the period 1,019 1,339 2,395
==================================================== ====== ============= ============ ===========
Attributable to:
Equity holders of the parent 1,019 1,339 2,395
==================================================== ====== ============= ============ ===========
Earnings per share (pence per share)
Basic earnings per share 7 1.2p 1.6p 2.9p
Diluted earnings per share 7 1.2p 1.6p 2.9p
==================================================== ====== ============= ============ ===========
Condensed Consolidated Statement of Comprehensive Income
for the financial period ended 30 June 2023
Six months to 30 June Year ended
=============================================================== ===================== ============ ================
2023 2022 31 December 2022
(unaudited) (unaudited) GBP'000
GBP'000 GBP'000
=============================================================== ===================== ============ ================
Profit for the period 1,019 1,339 2,395
=============================================================== ===================== ============ ================
Other comprehensive income/(expense):
=============================================================== ===================== ============ ================
Items that will be reclassified subsequently to profit or loss:
Translation differences on foreign operations (376) (115) (107)
=============================================================== ===================== ============ ================
Other comprehensive (loss) net of tax (376) (115) (107)
=============================================================== ===================== ============ ================
Total comprehensive income for the period 643 1,224 2,288
=============================================================== ===================== ============ ================
Attributable to:
Equity holders of the parent 643 1,224 2,288
=============================================================== ===================== ============ ================
Condensed Consolidated Statement of Changes in Equity
for the financial period ended 30 June 2023
Share Share Merger Translation Other Retained
capital Premium reserve Reserve Reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2023 832 2,406 1,002 (386) 196 21,792 25,842
========================================================================= ======== ======= ============ ========== =========== ========
Dividends - - - - - (889) (889)
Share-based payments - - - - 148 - 148
Elimination of exercised share-based - - - - (6) 6 -
Payments
Issue of share capital - 12 - - - - 12
========================================================================= ======== ======= ============ ========== =========== ========
Transactions with owners - 12 - - 142 (883) (729)
========================================================================= ======== ======= ============ ========== =========== ========
Profit for the period - - - - - 1,019 1,019
Other comprehensive income/(expense):
Exchange differences on translation of net
investments in foreign operations - - - (376) - - (376)
------------------------------------------------------------------------- -------- ------- ------------ ---------- ----------- --------
Total comprehensive income for the period - - - (376) - 1,019 643
========================================================================= ======== ======= ============ ========== =========== ========
At 30 June 2023 (unaudited) 832 2,418 1,002 (762) 338 21,928 25,756
========================================================================= ======== ======= ============ ========== =========== ========
Share Share Merger Translation Other Retained
Capital Premium Reserve Reserve Reserve Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2022 832 2,406 1,002 (279) (5) 19,890 23,846
========================================================================= ======== ======= ============ ========== =========== ========
Dividends - - - - - (329) (329)
Share-based payments - - - - 69 - 69
Elimination of exercised share-based -
payments - - - (69) 69 -
========================================================================= ======== ======= ============ ========== =========== ========
Transactions with owners - - - - - (260) (260)
========================================================================= ======== ======= ============ ========== =========== ========
Profit for the period - - - - - 1,339 1,339
Other comprehensive income/(expense):
Exchange differences on translation of net investments in foreign
operations - - - (115) - - (115)
========================================================================= ================= ============ ========== =========== ========
Total comprehensive income for the period - - - (115) - 1,339 1,224
========================================================================= ================= ============ ========== =========== ========
At 30 June 2022 (unaudited) 832 2,406 1,002 (394) (5) 20,969 24,810
========================================================================= ================= ============ ========== =========== ========
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============================= ============ ======== =========== ============== =========== ============ =======
At 1 January 2022 832 2,406 1,002 (279) (5) 19,890 23,846
============================= ============ ======== =========== ============== =========== ============ =======
Dividends - - - - - (493) (493)
Share-based payments - - - - 201 - 201
Transactions with owners - - - - 201 (493) (292)
============================= ============ ======== =========== ============== =========== ============ =======
Profit for the period - - - - - 2,395 2,395
Other comprehensive
income/(expense):
Exchange differences on
translation of net
investments in foreign
operations - - - (107) - - (107)
Total comprehensive income
for the period - - - (107) - 2,395 2,288
============================= ============ ======== =========== ============== =========== ============ =======
At 31 December 2022 832 2,406 1,002 (386) 196 21,792 25,842
============================= ============ ======== =========== ============== =========== ============ =======
Condensed Consolidated Balance Sheet
at 30 June 2023
30 June
2023 2022 31 December
(unaudited) (unaudited) 2022
Notes GBP'000 GBP'000 GBP'000
================================================== ====== ============= ============ ===========
Non-current assets
Goodwill 18,834 15,247 15,337
Other intangible assets 9 8,188 6,713 6,591
Property, plant and equipment 947 728 745
Right-of-Use assets 982 1,436 1,479
Deferred tax assets 85 85 51
================================================== ====== ============= ============ ===========
Total non-current assets 29,036 24,209 24,203
================================================== ====== ============= ============ ===========
Current assets
Inventories 89 26 44
Trade and other receivables 4,512 3,746 4,057
Current tax assets 288 305 356
Assets of disposal group held for sale 10 - 842 794
Cash and cash equivalents 9,410 10,926 12,137
================================================== ====== ============= ============ ===========
Total current assets 14,299 15,845 17,388
================================================== ====== ============= ============ ===========
Total assets 43,335 40,054 41,591
================================================== ====== ============= ============ ===========
Current liabilities
Lease liabilities (467) (402) (467)
Trade and other payables (1,788) (1,748) (1,523)
Current tax liabilities (109) - -
Liabilities of disposal group held for sale 10 - (184) (428)
Accruals and deferred income 12 (12,025) (9,831) (10,305)
================================================== ====== ============= ============ ===========
Total current liabilities (14,389) (12,165) (12,723)
================================================== ====== ============= ============ ===========
Non-current liabilities
Lease liabilities (1,002) (1,216) (1,215)
Deferred tax liabilities (2,162) (1,837) (1,785)
Non-current provisions (26) (26) (26)
================================================== ====== ============= ============ ===========
Total non-current liabilities (3,190) (3,079) (3,026)
================================================== ====== ============= ============ ===========
Total liabilities (17,579) (15,244) (15,749)
================================================== ====== ============= ============ ===========
Net assets 25,756 24,810 25,842
================================================== ====== ============= ============ ===========
Equity
Share capital 832 832 832
Share premium account 2,418 2,406 2,406
Merger reserve 1,002 1,002 1,002
Translation reserve (762) (394) (386)
Other reserve 338 (5) 196
Retained earnings 21,928 20,969 21,792
================================================== ====== ============= ============ ===========
Equity attributable to shareholders of the parent 25,756 24,810 25,842
================================================== ====== ============= ============ ===========
Condensed Consolidated Statement of Cash Flows
for the financial period ended 30 June 2023
Six months to 30 June Year ended
2023 2022 31 December
(unaudited) (unaudited) 2022
Notes GBP'000 GBP'000 GBP'000
=================================================================== ===== =============== =========== ============
Cash flows from operating activities
Profit before taxation 1,255 1,733 2,944
Net finance costs (35) 61 39
Depreciation charge 284 271 621
Amortisation charge 844 744 1,596
Profit on sale of property, plant and equipment (15) (6) (24)
Gain on business disposal 16 (150) - -
Share-based payment charge 148 69 201
Acquisition expenses 262 - -
Decrease in provisions - (25) (25)
=================================================================== ===== =============== =========== ============
Cash generated in operations before working capital movements 2,587 2,847 5,352
(Increase)/Decrease in trade and other receivables (428) 498 193
Increase in inventories and work in progress (45) (10) (27)
Increase in trade and other payables and accruals and deferred
income 706 206 755
=================================================================== ===== =============== =========== ============
Cash generated in operations 2,820 3,541 6,273
Interest received/(paid) 73 38 (27)
Net income tax paid (131) (470) (719)
=================================================================== ===== =============== =========== ============
Net cash inflow from operating activities 2,762 3,109 5,527
=================================================================== ===== =============== =========== ============
Investing activities
Purchase of intangible assets (996) (902) (1,631)
Purchase of property, plant and equipment (35) (134) (158)
Acquisition of subsidiary undertakings net of cash acquired 17 (3,827) - -
Proceeds from sale of property, plant, equipment and intangible
assets 21 15 53
Net proceeds on disposal of subsidiary undertakings 511 - -
=================================================================== ===== =============== =========== ============
Net cash outflow from investing activities (4,326) (1,021) (1,736)
=================================================================== ===== =============== =========== ============
Financing activities
Repayment of bank loans - (101) (102)
Repayments of leasing liabilities (270) (265) (556)
Issue of share capital 12 - -
Equity dividends paid (889) (329) (493)
=================================================================== ===== =============== =========== ============
Net cash (outflow) from financing activities (1,147) (695) (1,151)
=================================================================== ===== =============== =========== ============
Net (decrease)/increase in cash and cash equivalents (2,711) 1,393 2,640
=================================================================== ===== =============== =========== ============
Cash and cash equivalents at beginning of period 12,538 10,055 10,055
Effects of changes in foreign exchange rates (417) (110) (157)
=================================================================== ===== =============== =========== ============
Cash and cash equivalents at end of period 9,410 11,338 12,538
=================================================================== ===== =============== =========== ============
Notes to the Condensed Consolidated Interim Financial
Information
1. General information
The Company is a public limited company incorporated and
domiciled in the UK. The address of its registered office is Dawson
House, 5 Jewry Street, London, EC3N 2EX.
The Company is listed on AIM, a market operated by the London
Stock Exchange plc.
The condensed consolidated interim financial information does
not constitute statutory accounts as defined in section 435 of the
Companies Act 2006. The Group's consolidated financial statements
for the year ended 31 December 2022 have been filed at Companies
House. The audit report was not qualified and did not contain a
reference to any matter to which the auditor drew attention by way
of emphasis and did not contain a statement under section 498(2) or
section 498(3) of the Companies Act 2006.
2. Basis of preparation
The condensed consolidated interim financial statements for the
six months to 30 June 2023 have been prepared in accordance with
the accounting policies which will be applied in the twelve months
financial statements to 31 December 2023. These accounting policies
will be drawn up in accordance with applicable law and UK-adopted
International Accounting Standards (UK-IAS) that are effective at
31 December 2023.
The condensed consolidated interim financial statements are
unaudited. They do not include all the information and disclosures
required in the annual financial statements or for full compliance
with UK-IAS, and therefore should be read in conjunction with the
Group's published financial statements for the year ended 31
December 2022. The comparative figures for the year ended 31
December 2022 are not the Company's statutory accounts for that
period but have been extracted from these accounts.
The Directors, having considered the Group's current financial
resources, have concluded that they are adequate for the Group's
present requirements. Therefore, the condensed consolidated interim
financial information has been prepared on the going concern
basis.
Estimates
Application of the Group's accounting policies in preparing
condensed consolidated interim financial statements requires
management to make judgements and estimates that affect the
reported amount of assets and liabilities, revenues and expenses.
Actual results may ultimately differ from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements for the year ended 31 December
2022 with the addition of fair values acquisition accounting for
BestOutcome Ltd.
Risks and uncertainties
A summary of the Group's principal risks and uncertainties was
set out on pages 16 to 19 of the 2022 Annual Report and Accounts.
The Board considers these risks and uncertainties are still
relevant to the current financial year and the impact of changes in
the UK economy is reviewed in the Chairman's statement contained in
this report.
The Interim Report was approved by the Directors on 11 September
2023.
3. Revenue
Revenue disclosed in the income statement is analysed as
follows:
Six months to 30 June Year to 31 December
================================
2023 2022 2022
GBP'000 GBP'000 GBP'000
=================================== ================ ============== ===========================
Perpetual licences 1,028 2,247 3,606
Recurring revenue - other licences 9,692 8,204 16,927
Services income 2,766 2,984 6,033
=================================== ================ ============== ===========================
13,486 13,435 26,566
=================================== ================ ============== ===========================
Revenue is recognised for each category as follows:
-- Perpetual licences - recognised at the point of transfer
(delivery) of the licence to a customer.
-- Recurring revenue: other licences: SaaS, maintenance, support
and subscriptions - as these services are provided over the term of
the contract, revenue is recognised over the life of the
contract.
-- Services - recognised on delivery of the service.
4. Segmental information
Operating Segments
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision makers to
allocate resources to the segments and to assess their
performance.
The chief operating decision makers have been identified as the
Executive Directors. The Group revenue is derived entirely from the
sale of software licences, software maintenance and support and
related services. Consequently, the Executive Directors review the
three revenue streams, but as the costs are not recorded in the
same way, the information is presented as one segment and as such
the information is presented in line with management
information.
Year ended 31 December
Six months to 30 June
================================
2023 2022 2022
GBP'000 GBP'000 GBP'000
==================================================== ================ ============== ==============================
Revenue 13,486 13,435 26,566
==================================================== ================ ============== ==============================
Adjusted EBITDA 2,608 2,878 5,401
Share-based payments (148) (69) (201)
Amortisation and impairment of purchased intangible
assets (594) (494) (1,097)
Depreciation (284) (271) (621)
==================================================== ================ ============== ==============================
Adjusted operating profit 1,582 2,044 3,482
Amortisation of acquired intangible assets (250) (250) (499)
Acquisition expenses and stamp duties (262) - -
Operating profit 1,070 1,794 2,983
Net finance income/(cost) 35 (61) (39)
Gain on business disposal 150 - -
==================================================== ================ ============== ==============================
Segment profit before tax 1,255 1,733 2,944
Tax (236) (394) (549)
==================================================== ================ ============== ==============================
Segment profit after tax 1,019 1,339 2,395
==================================================== ================ ============== ==============================
Operating profit 1,070 1,794 2,983
Amortisation of intangible assets 844 744 1,596
Depreciation charge 284 271 621
---------------------------------------------------- ---------------- -------------- ------------------------------
EBITDA 2,198 2,809 5,200
EBITDA 2,198 2,809 5,200
Acquisition expenses 262 - -
Share-based payments 148 69 201
Adjusted EBITDA 2,608 2,878 5,401
==================================================== ================ ============== ==============================
Geographical, product and sales channel information
Revenue by geographical segment represents revenue from external
customers based upon the geographical location of the customer.
Year ended 31 December
Six months to 30 June
==================================================== ================================ ==============================
2023 2022 2022
GBP'000 GBP'000 GBP'000
==================================================== ================ ============== ==============================
UK 5,676 5,276 10,263
Scandinavia 3,035 3,354 6,388
Germany 1,767 2,180 4,449
USA 570 594 1,101
Rest of Europe 2,123 1,742 3,808
Rest of World 315 289 557
==================================================== ================ ============== ==============================
13,486 13,435 26,566
==================================================== ================ ============== ==============================
Revenue by product group represents revenue from
external customers.
Six months to 30 June Year ended 31 December
========================================== ================================ ==============================
2023 2022 2022
GBP'000 GBP'000 GBP'000
========================================== ================ ============== ==============================
Revenue from software & related services:
Building Lifecycle 9,328 8,883 17,248
CAD & Visualisation 3,499 3,638 7,432
Other - third party software 659 914 1,886
========================================== ================ ============== ==============================
13,486 13,435 26,566
========================================== ================ ============== ==============================
The Group utilises resellers to access certain markets. Revenue
by sales channel represents revenue from external customers.
Six months to 30 June Year ended
31 December
========= ============================ ====================================
2023 2022 2022 GBP'000
GBP'000 GBP'000
========= ============================ ============== ====================
Direct 12,958 12,749 25,317
Reseller 528 686 1,249
========= ============================ ============== ====================
13,486 13,435 26,566
========= ============================ ============== ====================
5. Operating profit
Operating profit for the period is after charging the following
items:
Year ended 31 December
Six months to 30 June
==============================
2023 2022 2022
GBP'000 GBP'000 GBP'000
==================================================== ================ ============ ==============================
Software product development expense 1,030 887 1,526
Depreciation of property, plant and equipment 76 98 147
Depreciation of Right-of-Use assets 208 173 474
Amortisation of acquired intangible assets 250 250 499
Amortisation of other intangible assets 594 494 1,097
Share-based payments 148 69 201
Profit on disposal of property, plant and equipment (15) (6) (24)
Foreign exchange losses/(gains) 39 10 (206)
Acquisition expenses and stamp duties 262 - -
==================================================== ================ ============ ==============================
6. Net finance cost
Finance income and costs disclosed in the income statement is
set out below:
Six months to 30 June Year ended 31 December
==============================
2023 2022 2022
GBP'000 GBP'000 GBP'000
===================================================== ================ ============ ==============================
Finance income:
Bank and other interest receivable 60 - 20
Finance costs:
Bank overdraft and loan interest - (1) (4)
Inputted interest expense for leasing arrangements (25) (60) (55)
===================================================== ================ ============ ==============================
Total net finance income/(cost) 35 (61) (39)
===================================================== ================ ============ ==============================
7. Basic and diluted earnings per share
The calculations of the earnings per share are based on profit
after tax attributable to the ordinary equity shareholders of the
Company and the weighted average number of shares in issue for the
reporting period.
Six months to
30 June
===================================== ============================================
2023 2022 Year to 31 December 2022
Profit Weighted Profit Weighted Profit Weighted
attributable average attributable average attributable average
to number of to number of to number of
shareholders shares EPS shareholders shares EPS shareholders shares EPS
(GBP'000) (millions) (p) (GBP'000) (millions) (p) (GBP'000) (millions) (p)
=========== ============ ========== ======== ============ =========== ======= ============ =========== ======
Basic
earnings
per share 1,019 82.3 1.2 1,339 82.2 1.6 2,395 82.2 2.9
Diluted
earnings
per share 1,019 83.7 1.2 1,339 82.7 1.6 2,395 83.0 2.9
Adjusted
earnings
per share 1,433 82.3 1.7 1,541 82.2 1.9 2,799 82.2 3.4
=========== ============ ========== ======== ============ =========== ======= ============ =========== ======
Shares held by the Employee Share Ownership Trust are excluded
from the weighted average number of shares in the period. Adjusted
profit attributable to shareholders is reconciled to reported
profit attributable to shareholders in note 14.
8. Dividends
Interim dividend
The Directors have recommended an interim dividend of 0.25 pence
per ordinary share (2022: interim dividend of 0.20 pence per
ordinary share).
Dividends paid in the period
Dividends paid in the six months to 30 June 2023, consisting of
a final and special dividend, were 1.08 pence per ordinary share
(2022: 0.40 pence per ordinary share). Cash dividends of GBP889,000
(2022: GBP329,000) were paid in the six months to 30 June 2023 as
follows:
Six months to 30 June Year to 31 December
2023 2023 2022 2022 2022 2022
Ordinary Shares per share GBP'000 per share GBP'000 per share GBP'000
================================== ========= ========== =========== ======= =========== ========
Declared and paid during the year
Interim - current year - - 0.20 164
Special - previous year 0.58 477 - - - -
Final - previous year 0.50 412 0.40 329 0.40 329
================================== ========= ========== =========== ======= =========== ========
1.08 889 0.40 329 0.60 493
================================== ========= ========== =========== ======= =========== ========
9. Other intangible assets
Other intangible assets comprise capitalised development costs,
acquired customer relationships and purchased intangible assets.
Additions in the six months to 30 June 2023 represent purchased
intangible assets of GBP1,448,000 relating to intangible assets
recognised on acquisition of BestOutcome (see Note 17) (2022 half
year: GBP164,000) and internal development costs capitalised of
GBP996,000 (2022 half year: GBP738,000). Internal development
relates to software development projects that meet the accounting
policy criteria for capitalisation. At the year ended 31 December
2022, purchased intangible assets comprised GBP81,000 of additions
and GBP1,550,000 of internal development cost additions.
10. Disposal Group held for sale
In line with our previously announced strategy to focus on our
core customer segments and businesses, we held our Eleco Software
GmbH, the German ARCON architectural CAD business, for sale at the
year end in accordance with the provisions of IFRS 5. Assets of the
disposal group held for sale.
The table below reflects assets of the disposal group held for
sale measured at the lower of carrying amount and fair value less
costs to sell in the Consolidated Balance Sheet. There was no
revaluation from reclassification required as a result of this
business classification under IFRS 5. Effective 1 January 2023, the
business was disposed of to an Austrian buyer (see note 16).
At 30 June 2023 At 31 December
============================== ================================== ================
2023 2022 2022
============================== ================ ================ ================
(unaudited) (unaudited)
Assets Held for Sale GBP'000 GBP'000 GBP'000
============================== ================ ================ ================
Goodwill - 336 336
Other intangible assets - 1 2
Property, plant and equipment - 9 9
Right-of-Use assets - 74 19
Trade and other receivables - 10 27
Cash and cash equivalents - 412 401
============================== ================ ================ ==============
Total Assets Held for sale - 842 794
============================== ================ ================ ==============
Liabilities of disposal group held for sale
Liabilities classified as held for sale on the face of the
Consolidated Balance Sheet are as follows:
Six months to 30 June Year ended 31 December
2023 2022 2022
(unaudited) (unaudited)
Liabilities Held for Sale GBP'000 GBP'000 GBP'000
================================ ================= ============ ======================
Lease liabilities - (76) (19)
Trade and other payables - (53) (350)
Accruals and deferred income - (55) (59)
================================ ================= ============ ======================
Total Liabilities Held for Sale - (184) (428)
================================ ================= ============ ======================
11. Cash and borrowings
The net cash position of the Group as at 30 June 2023 is set out
below:
At 30 June At
31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
==================================== ====================== ==================== ======================
Cash and cash equivalents 9,410 11,338 12,538
Bank loans - - -
Lease liabilities (1,469) (1,693) (1,682)
==================================== ====================== ==================== ======================
7,941 9,645 10,856
==================================== ====================== ==================== ======================
The UK banking facilities are with Barclays Bank plc and the Group facilities comprise a GBP1.0m
overdraft facility, carrying an interest rate of 2.75 percent over base rate (undrawn at 30
June 2023, 31 December 2023 and 30 June 2022).
==========================================================================================================
12. Accruals and deferred income
At 31 December
At 30 June
===================== =======
2023 2022 2022
GBP'000 GBP'000 GBP'000
=================================== ===================== ======= ==========================
Accruals 2,425 2,570 2,518
Deferred income 9,600 7,261 7,787
=================================== ===================== ======= ========================
12,025 9,831 10,305
=================================== ===================== ======= ========================
Deferred income represents income from the sale of software
subscription licences, SaaS licences and from software maintenance
and support contracts and is taken to revenue in the income
statement on a straight-line basis in line with the service and
obligations over the term of the contract.
13. Related party disclosures
Transactions between Group undertakings, which are related
parties, have been eliminated on consolidation and are not
disclosed in this note.
The Directors of the Company had no material transactions with
the Company during the period, other than a result of service
agreements.
14. Additional performance measures
The Group uses adjusted figures, which are not defined by
generally accepted accounting principles ("GAAP") such as UK-IAS.
Adjusted figures and underlying growth rates are presented as
additional performance measures used by management, as they provide
relevant information in assessing the Group's performance, position
and cash flows. We believe that these measures enable investors to
track more clearly the core operational performance of the Group,
by separating out items of income or expenditure relating to
acquisitions, disposals and capital items. Our management uses
these financial measures, along with UK- IAS financial measures, in
evaluating the operating performance of the Group.
Six months to 30 June Year ended 31 December
=========================================== =============================== ================================
2023 2022 2022
GBP'000 GBP'000 GBP'000
=========================================== ================ ============= ================================
Operating profit 1,070 1,794 2,983
Acquisition expenses and stamp duties 262 - -
Amortisation of acquired intangible assets 250 250 499
=========================================== ================ ============= ==============================
Adjusted operating profit 1,582 2,044 3,482
------------------------------------------- ---------------- ------------- ------------------------------
Profit before tax 1,255 1,733 2,944
Acquisition expenses and stamp duties 262 - -
Amortisation of acquired intangible assets 250 250 499
=========================================== ================ ============= ==============================
Adjusted profit before tax 1,767 1,983 3,443
=========================================== ================ ============= ==============================
Tax charge (236) (394) (549)
Acquisition expenses and stamp duties (50) - -
Amortisation of acquired intangible assets (48) (48) (95)
=========================================== ================ ============= ==============================
Adjusted tax charge (334) (442) (644)
=========================================== ================ ============= ==============================
Profit after tax 1,019 1,339 2,395
Acquisition expenses and stamp duties 212 - -
Amortisation of acquired intangible assets 202 202 404
=========================================== ================ ============= ==============================
Adjusted profit after tax 1,433 1,541 2,799
=========================================== ================ ============= ==============================
Cash generated in operations 2,820 3,541 6,273
Purchase of intangible assets (996) (902) (1,631)
Purchase of property, plant and equipment (35) (134) (158)
Acquisition expenses and stamp duties 262 - -
=========================================== ================ ============= ==============================
Adjusted operating cash flow 2,051 2,505 4,484
=========================================== ================ ============= ==============================
Adjusted operating cash flow 2,051 2,505 4,484
Net interest received/(paid) 73 38 (27)
Tax paid (131) (470) (719)
Proceeds from disposal of PPE 21 15 53
Acquisition expenses and stamp duties (262) - -
=========================================== ================ ============= ==============================
Free cashflow 1,752 2,088 3,791
=========================================== ================ ============= ==============================
15. Exchange rates
The following exchange rates have been applied in preparing the
condensed consolidated financial statements:
Income Statement Balance sheet
six months to 30 June as at 30 June Year to
31 December 2022
Income Balance
2023 2022 2023 2022 Statement sheet
========================== ===== ======== ========== ===== ========= =======
Swedish Krona to Sterling 13.00 12.41 13.71 12.45 12.46 12.61
Euro to Sterling 1.14 1.19 1.16 1.16 1.17 1.13
US Dollar to Sterling 1.24 1.30 1.27 1.22 1.24 1.21
========================== ===== ======== ========== ===== ========= =======
16. Disposal of subsidiary
The Company announced on 20(th) February 2023 the sale of its
wholly owned subsidiary Eleco Software GmbH, the German Arcon
architectural CAD business ("Arcon") to FirstInVision GesmbH, an
Austrian architectural software business, for a total consideration
of EUR600,000, effective 1 January 2023. Following deduction of net
assets, costs relating to the disposal and recycling of reserves, a
pre-tax gain on disposal of GBP150,000 was recognised in the
period.
17. Acquisition of BestOutcome Ltd
The Company announced on 27 June 2023 that it has acquired 100
per cent of Buckinghamshire-based BestOutcome Limited
("BestOutcome"), a UK provider of simple, scalable Project
Portfolio Management (PPM) software, for an initial consideration
of GBP4.825m in cash (and an adjusted initial value of GBP3.525m on
a cash-and-debt-free equivalent with GBP1.3m of cash in the
business at the time of the acquisition) ("the Acquisition"). The
Acquisition is exclusively financed by the Company's internal cash
resources.
The transaction includes a potential deferred outflow of GBP0.5m
by the end of the year ended 31 December 2024 with this
remuneration subject to the BestOutcome management team attaining
specific performance targets in 2023 and 2024.
BestOutcome's core products PM3 and PM3 Time are used to manage
strategic programmes and multiple portfolio management projects.
The Acquisition strengthens Eleco's Building Lifecycle portfolio,
representing further progress in Eleco's growth strategy to enhance
its predictable recurring revenue and to increase value to its
shareholders by investing in synergistic software products and
technologies, scalable and building on and with its existing
Building Lifecycle portfolio. BestOutcome has a particular strength
in winning public sector business, including the NHS, universities
and county councils. This gives Eleco Group a greater foothold in
the wider built environment, while also complementing its private
sector exposure.
For the above reasons, combined with the anticipated
profitability of BestOutcome's products in other Group markets,
synergies arising, plus the ability to hire the assembled workforce
of BestOutcome (including the founders and management team), the
Group understandably paid a premium over the acquisition net
assets, giving rise, aside from other valued intangibles
(principally values of brands), to goodwill. All intangible assets,
in accordance with IFRS3 Business Combinations, were recognised at
their provisional fair values on acquisition date, with the
residual excess over net assets being recognised as brands and
goodwill. Intangibles arising from the acquisition consist of brand
values, and along with an assessment of other potential intangibles
such as customer relationships, intellectual property and R&D,
have been independently valued by professional advisors.
The following table summarises the consideration and provisional
fair values of assets acquired and liabilities assumed at the date
of acquisition:
GBP'000
================================== ===============
Intangible fixed assets:
Brands 770
Development expenditure 675
Other intangibles 3
Property, plant and equipment 18
Trade receivables and prepayments 179
Cash and cash equivalents 1,266
Trade and other payables (162)
Deferred income (1,047)
Corporation tax (72)
Deferred tax liabilities (342)
----------------------------------- ---------------
Net assets acquired 1,288
Goodwill 3,543
Acquisition cost 4,831
=================================== ===============
There are no non-controlling interests in relation to the
BestOutcome Ltd acquisition. Fair values in the above table have
only been determined provisionally and may be subject to change in
the light of any subsequent new information becoming available in
time. The review of the fair value of assets and liabilities
acquired will be completed within twelve months of the acquisition
date. Receivables at the acquisition date are expected to be
collected in accordance with the gross contractual amounts.
The acquisition cost was satisfied by:
GBP'000
==================== ===============
Cash 4,831
Share consideration -
Total consideration 4,831
===================== ===============
The net cash outflow arising on acquisition was:
GBP'000
========================================================================= ===============
Cash consideration paid 4,831
Acquisition related costs 262
Cash and cash equivalents within the BestOutcome business on acquisition (1,266)
Total net cash outflow on acquisition 3,827
========================================================================== ===============
Other costs relating to the acquisition have not been included
in the consideration cost. Directly attributable acquisition costs
include external legal and accounting costs incurred in compiling
the acquisition legal contracts and the performance of due
diligence activity and the fair value exercise, together with stamp
duty, and total GBP262,000. These costs have been charged in
distribution and administrative expenses in the consolidated income
statement.
BestOutcome Ltd, in common with other Group companies, has a 31
December calendar year end. In the preceding financial year 2022
BestOutcome Ltd generated revenue of GBP2.0m and net profit before
taxation of GBP0.2m based on figures and accounting policies prior
to Eleco plc Group control.
Had the acquisition taken place from the start of the Group's
financial year (from 1 January 2023) and based on figures and
accounting policies prior to Eleco plc Group control, management
estimate that BestOutcome Ltd would have contributed revenue of
GBP1.0m and profit before taxation of GBP0.2m to the Group results
in this first half year.
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END
IR FLFEAAVILLIV
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