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Started: investz, 2 Jun 2024 14:31
Last post: investz, 2 Jun 2024 14:31
A very good,near almost two A4pages on ELCO in the June SCSW monthly sheet.
Started: Troajan, 16 Sep 2022 12:05
Last post: Troajan, 16 Sep 2022 12:05
Started: Investfree, 15 Aug 2022 15:18
Last post: Investfree, 15 Aug 2022 15:18
I took a closer look at the eleco Group's portfolio of companies. If I'm completely honest, I can't see any plausible strategy: On the one hand, there are companies like Consultec and Powerproject in the portfolio, which offer special planning and software systems in the area of construction, but do not actually offer SaaS software. On the other hand, there are ICON and Shire, which offer SaaS software solutions in a niche market, but in my view do not bring great potential for strong growth. Furthermore, there is VEEUZE, which actually offers ecommerce solutions for manufacturers and retailers of building materials in the broadest sense. This company offers innovative products including AI modules in the area of room configuration. These solutions are also 100% SaaS-based solutions.
All in all, therefore, a belly store that does not reveal a clear strategy. In my view, many software solutions can only be sold in the respective countries that they are expert systems for certain trades. This means that, with the exception of VEEUZE/Powerproject, no solutions are really scalable worldwide.
Started: EquityDevelopmen, 25 May 2022 10:18
Last post: EquityDevelopmen, 25 May 2022 10:18
Eleco is transitioning into a highly cash generative & profitable SaaS winner. April YTD recurring revenues have climbed 8% to £5.4m (vs £5.0m LY) - representing approx. 60% of group sales vs 54% LY.
As anticipated, this growth was offset by a similar decrease in software licenses/services. Hence total turnover at £8.9m was flat in constant currency terms, & slightly down (4%) vs LY’s £9.3m - reflecting forex headwinds (eg SEK - £).
Equally though, April YTD adjusted PBT is tracking our £2.9m target, even after factoring in further ‘growth’ investment for later in the year. Elsewhere net cash closed April at a healthy £11.3m (or 13.5p/share vs £10.0m Dec’21), providing ample firepower for future M&A.
We have prudently held our adjusted PBT target of £2.9m, but shaved FY22 revenues by 2% to £27.0 (vs £27.6m B4), along with the valuation 6% to 141p/share (150p) due to sector wide multiple compression.
We think the stock is significantly undervalued based on both fundamentals and in relative terms. Trading on 2.3x 2022 EV/revs and 10.1x EV/EBITDA vs 5.7x & 17.5x for peers and implying potential upside on a rerating of >50% for patient investors.
Link to note: https://www.equitydevelopment.co.uk/research/arr-climbs-8-lfl-with-ytd-pbt-in-line-with-ests
Started: EquityDevelopmen, 31 Mar 2022 09:16
Last post: EquityDevelopmen, 31 Mar 2022 09:16
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.
https://www.equitydevelopment.co.uk/research/grow-baby-grow-
Started: nicton, 21 Mar 2022 14:29
Last post: nicton, 21 Mar 2022 14:29
Will be this Thursday (24th).
Started: EquityDevelopmen, 25 Jan 2022 08:00
Last post: EquityDevelopmen, 25 Jan 2022 08:00
We have nudged up our valuation to 154p/share (previously 150p). At 92p, Eleco trades on modest 2022 EV/sales & EV/EBITDA multiples of 2.4x and 12.1x. https://www.equitydevelopment.co.uk/research/time-to-buy-the-dip
Started: troken, 5 Jan 2022 11:51
Last post: NotBot, 7 Jan 2022 15:07
Thanks troken; meanwhile nice to see a small lift in the share price this afternoon although on pretty thin trade. Things might liven up a bit with the trading update (presumably) later this month.
Yes I was on a webinar with them and the fund manager was going through the disposals within the fund. Their reasoning was that after a call with the management team, they didn't feel it was a stock that they would want to add to, so questioned why they were holding it at all. I don't think they felt it was a bad stock, but they've recycled the money into Calnex Solutions, which they felt offered a better opportunity. I going to continue holding this for the time being.
Interesting snippet, thank you; could you provide your source please?
I learnt this morning that the SDL Free Spirit fund sold its position of 2.3 million shares in December. Obviously this would've put some downward pressure on the share price.
Started: nicton, 22 Sep 2021 15:33
Last post: nicton, 22 Sep 2021 15:33
Over the past few days there have been far more shares sold than bought but the sp has remained firm surely indicating a buyer lurking in the wings.
Started: EquityDevelopmen, 15 Sep 2021 11:20
Last post: EquityDevelopmen, 15 Sep 2021 11:20
H2 has started well, albeit as the company aggressively transitions from perpetual licensing (23.5% of H1’21 turnover, up 8% vs H1’19) to recurring revenues (55%, and +10% vs H1’19), this will inevitably temper top and bottom line progression. It will involve longer sales recognition and greater upfront investment (all self-funded) in order to later reap the rewards of predictable and more profitable income streams (eg SaaS). By switching from a product-led to a customer centric organisation, we believe this perfectly positions the group to flourish in the new cloud & digital age.
We think the Board is doing all the right things - and have raised our valuation from 135p to 150p/share, thanks to the improved earnings visibility, CLVs and the risk/reward profile.
Moreover the stock trades at a considerable discount to peers, on 4.1x 2021 EV/revenues and 17.5x EV/EBITDA compared to 9.7x and 28.5x for the sector. Eventually this gap should close, which over a 3-5 year period, could (in theory) propel the price substantially higher.
https://www.equitydevelopment.co.uk/research/all-systems-go-at-super-durable-buildtech-stock
Started: TaltBong, 4 Sep 2021 21:57
Last post: TaltBong, 4 Sep 2021 21:57
Courtesy of Paul Hill (who first introduced me to ELCO shares (and I'm very glad he did, many thanks Paul):
"Nice to see Elecosoft shares rallying ahead of interims on 15th. My guess is that the shift towards ‘all things digital’ across the construction / homebuilding industries is boosting demand for ELCO's flagship PowerProject software. Alongside generating strong growth for its online floorings / soft-furnishings visualisation tools (ie Interiorstudio & Materialo) as consumers continue to switch more towards internet shopping for carpets, floor tiles, curtains, etc."
Started: EquityDevelopmen, 29 Jul 2021 08:31
Last post: EquityDevelopmen, 29 Jul 2021 08:31
#ELCO Amidst all the recent football hullabaloo, England weren’t the only side scoring from every angle. Team Eleco, an ambitious BuildTech software firm, also “performed extremely well”. Saying that H1’21 turnover jumped to not less than £13.7m, or +13% LFL vs LY (£12.2m) and +9% vs H1’19 (£12.7m). With growth accelerating sequentially from 9% in Q1 to approx 17% LFL in Q2.
We believe the Board’s new strategy has success written all over it. Sure it’s still early days, yet first impressions are promising. In addition, the company plans to fast-track its transition to a full recurring revenue model. By placing greater emphasis on this option in H2, particularly in the US where SaaS adoption is already high.
Our valuation nudges up to 135p/share from 125p, thanks to the improved earnings quality. Moreover the stock trades at a wide-discount to peers, on 3.9x 2021 EV/Revs & 15.7x EV/EBITDA compared to 11x & 30x for the sector. Plus with a 3-5 year view, we could readily see ELCO justify a price of above 200p.
https://www.equitydevelopment.co.uk/research/accelerating-the-transition-to-a-subscription-model
Started: nicton, 10 May 2021 11:17
Last post: nicton, 10 May 2021 11:17
With the company making the right noises profit-wise and the share price responding accordingly, is there a predator on the prowl wanting to buy before the price goes up even more?
Started: TaltBong, 30 Apr 2021 08:23
Last post: TaltBong, 30 Apr 2021 08:23
Profit before tax increased by 21% over the same period in 2020, great products, new contracts coming in. Strong performance. Stockopedia High Flyer. LTH.
Last post: TaltBong, 29 Apr 2021 11:27
Tried to buy some more this morning but just gone straight to Negotiated Order
Back again this morning, both a 10k and a 25k sell has gone through the market. I don't think it's got anything to do with the Ketteleys' holdings as they would have had to issue a notification notice by now.
Director K Craig making a forlorn attempt to save his directorship by buying shares at long last. Far too late sir.
I do not think it is connected,but I often wonder what the Ketteley family will do with their shares as Mr Ketteley is no longer Chairman. Approximately 12.5m shares and just under 15%. These would make a nice start if someone wanted to buy them. I am a long term holder and will wait for resolution. As ever DYOR
Our regular '10k seller' (with sometimes the odd 25k as well) quick out of the blocks this week; they are certainly restraining the sp.
Started: cielo102, 29 Mar 2021 21:08
Last post: cielo102, 29 Mar 2021 21:08
Started: Maccc, 29 Mar 2021 09:14
Last post: Maccc, 29 Mar 2021 09:14
Morning all, here's a video with for Eleco's FY results: https://youtu.be/sLQAp2Rkp58
Lot's of similar tech co's on this channel & please subscribe if you'd like regular updates
Started: EquityDevelopmen, 29 Mar 2021 08:51
Last post: EquityDevelopmen, 29 Mar 2021 08:51
Clarity of thought and simplicity of message are two vital components of any strategy. This morning, together with releasing ‘in line’ 2020 results, BuildTech software developer Eleco revealed its new ‘client led’ (vs product before) growth plan. Explaining how over the next 3-5 years, it aims to not only accelerate LFL revenues towards market norms (c.10% pa), but also deliver healthy profit margins and cash conversion. Not unambitious targets considering its transition to an ARR model from 56% today (53% 2019), alongside the challenges posed by rivals Autodesk, Nemetschek & Bentley Systems.
Moreover, there are several ‘hot spots’ where the business’ software is perfectly suited. Namely data centres, smart factories, online warehouses and connected ‘Home &/or Build-to-Rent’ – often taking on the key project ‘control room’ role. In fact if successful, we think there is every chance that Eleco could actually surpass its own stretching goals in due course.
Meaning that for investors the upside potential could be significant, since little of this appears to be factored into the shares (see below), which trade on 2.9x 2021 EV/revs and 10.5x EV/EBITDA vs 9x & 26x for peers.
See our updated research below and watch an interview with the management team (30 mins):
https://www.equitydevelopment.co.uk/research/tag/eleco
Started: nicton, 26 Mar 2021 12:32
Last post: cielo102, 26 Mar 2021 13:13
I am excited to see results and plans on Monday. Now at multi year highs and I expect them to pass 2007all time high soon
Monday's annual results announcement is just over seven weeks earlier than last year which, in stock market translation, is normally indicative of good news on the way. From past experience of disappointments, I won't be counting my eggs .....
Started: nicton, 12 Mar 2021 14:22
Last post: cielo102, 12 Mar 2021 14:42
I am sure there will be more to come. At the last trading update, they advised that they went to 6.1m cash positive and profits up 10%. https://www.investegate.co.uk/eleco-plc--elco-/rns/year-end-trading-update/202101190700040938M/
ELCO upped their sales focus on the US and are sure to benefit from the Biden infrastructure spending.
Only just noticed this 50k trade transacted on 10th (@ 104p) but notification held back ... par for the course!
Started: cielo102, 3 Mar 2021 14:35
Last post: cielo102, 3 Mar 2021 14:35
This interview from September is great watching for those interested in ELCO https://www.youtube.com/watch?v=kOitn4U8vRQ
Started: nicton, 9 Feb 2021 10:49
Last post: nicton, 9 Feb 2021 10:49
And still heading higher - 102.5p - so much for my lack of confidence!
Started: nicton, 27 Jan 2021 14:27
Last post: nicton, 27 Jan 2021 14:27
A few largish buy trades have gone through recently following the trading update ... another 20k one @101p this morning. I'm a long-term ELCO supporter but even I haven't got that kind of confidence.