Eleco PLC Reports Strong Interim Growth with Record Recurring Revenues

Eleco PLC H1 2025: record recurring revenue powers double‑digit growth

Eleco’s interim numbers show a software business leaning hard into subscriptions and reaping the rewards. For the six months to 30 June 2025, the Group delivered record recurring revenues, stronger margins and a bigger dividend, all while staying debt free and integrating a new acquisition (PEMAC).

If you like predictable, cash-generative software models, this update ticks plenty of boxes.

Key numbers at a glance

Metric	H1 2025	H1 2024	Change
Total revenue	£18.4m	£16.3m	+13%
Total Recurring Revenue (TRR)	£14.8m	£12.0m	+23% (81% of total vs 74%)
Annualised Recurring Revenue (ARR)	£30.7m	£25.8m	+19% (12% organic)
EBITDA	£3.8m	£3.0m	+27%
Adjusted EBITDA	£4.3m	£3.3m	+30%
Profit before tax	£2.0m	£1.6m	+25%
Adjusted profit before tax	£2.7m	£2.2m	+23%
Basic EPS	2.0p	1.5p	+33%
Adjusted basic EPS	2.7p	2.1p	+29%
Cash	£12.2m	£12.0m	Debt free
Interim dividend	0.35p	0.30p	+17%

Jargon check: ARR is the annualised value of recurring revenue at the end of the period; TRR is the recurring revenue actually recognised across the six months. Both matter because they show the durability of future cash flows.

Why this update matters for investors

The headline is mix. Recurring revenue climbed to 81% of total sales, up from 74% a year ago, while perpetual licences and services were lower. That is exactly what you want to see in a modern software group: less lumpy licence and services income, more subscription and support.

Operational gearing is coming through nicely. Despite slightly lower gross margins, tight control of overheads delivered a 30% rise in adjusted EBITDA and a 29% jump in adjusted EPS to 2.7p. The Board has confidence to lift the interim dividend by 17% to 0.35p, a small but welcome signal.

PEMAC acquisition: broadening CMMS and geographic reach

In January, Eleco bought PMI Software (PEMAC) in Ireland for cash consideration of £5.5m, with a net cash outflow of £4.4m after acquired cash. There is an earn-out of up to €2.4m payable in 2026 and 2027 if revenue and margin conditions are met.

PEMAC is a SaaS CMMS business – Computerised Maintenance Management Software that helps customers plan and track maintenance of assets. It complements Eleco’s ShireSystem, strengthens the CMMS offer and extends the footprint in Ireland and beyond.

Integration is “progressing well” and in the first five and a half months under ownership PEMAC contributed €1.3m (£1.1m) of revenue and £0.2m of profit before tax. Early days, but the signs are supportive.

Geography and product: where the growth came from

• UK revenue rose 14% to £8.7m and now represents 47% of the Group.
• Scandinavia grew to £3.3m, while Rest of Europe lifted to £3.5m, helped by recent additions in Romania and Ireland.
• Germany was softer at £1.6m, reflecting budget pressure in visualisation services.
• USA revenue declined to £0.7m, due to two chunky 2024 service orders not repeating. Encouragingly, Eleco added 38 new US customers and recurring revenue in the US rose 25% year-on-year.

By product, Building Lifecycle software (the core planning, estimating and project delivery tools) grew strongly to £14.6m. CAD and Visualisation fell to £2.8m, in line with the German slowdown. Services income also dipped to £3.3m as the model pivots to sticky subscriptions.

Cash, balance sheet and dividend: still conservative

Eleco ended the half with £12.2m of cash and no debt. That is after paying £5.6m of PEMAC consideration and costs and a £0.6m final dividend. Operating cash generation was solid, with net cash inflow from operations of £5.1m. Free cash flow, on the company’s definition, was £3.37m (H1 2024: £3.52m).

Deferred income – cash already collected for future service delivery – climbed to £15.3m (30 June 2024: £11.6m). That is a healthy leading indicator for future revenue recognition.

The interim dividend is set at 0.35p per share, payable on 13 October 2025 to holders on the register on 26 September 2025 (ex‑dividend 25 September 2025).

Execution highlights: product releases and AI adoption

Eleco invested 16% of revenue in Technology and Innovation, supporting a steady cadence of releases: Asta Powerproject 2026.1 with enhanced 3D/4D, PEMAC Assets 4.2 with better dashboards and compliance features, and new PM3 capabilities including web Gantt and critical path analysis.

AI is moving from buzzword to utility. Asta GPT now supports multiple languages and is “widely used” by customers. Internally, AI is being applied to tendering, data migration, coding and testing, onboarding and support – small efficiencies that stack up across a group of Eleco’s size.

On the governance side, Elecosoft UK, BestOutcome and PEMAC achieved ISO 27001:2022 recertifications. In a world where data security wins or loses deals, that matters.

My take: the good, the not‑so‑good, and what to watch

Positives

• Subscription mix is accelerating: TRR up 23% and now 81% of the total; ARR up 19% to a record £30.7m.
• Profit quality improving: adjusted EBITDA up 30% and adjusted EPS up 29% despite macro headwinds.
• Conservative balance sheet: £12.2m cash, no debt, and robust operating cash generation.
• PEMAC integration on track with immediate profit contribution and a clearer CMMS growth lane alongside ShireSystem.
• Deferred income and net revenue retention above 110% point to strong customer stickiness.

Watch‑outs

• Visualisation services in Germany remain weak; CAD & Visualisation revenue fell to £2.8m.
• US revenue declined 8% year-on-year due to non‑repeat services; momentum depends on converting Asta Vision opportunities and scaling customer success.
• PEMAC carries an earn‑out of up to €2.4m; delivery will hinge on hitting revenue targets at acceptable margins.
• Services revenue overall was lower at £3.3m; management is working on initiatives to address this, but traction is still to be evidenced.

Outlook: in line with expectations and building for scale

Management reiterates confidence in delivering full‑year 2025 results in line with market expectations. With a higher recurring base, rising deferred income and continued investment in product and AI, that looks reasonable.

In short, Eleco is executing on the classic software playbook: shift to subscriptions, broaden the suite via targeted M&A, and squeeze operating leverage as scale builds. The mix shift and cash discipline are doing the heavy lifting. If the US pipeline converts and Germany stabilises, there is further upside to come.

What I’ll watch next

• ARR growth rate through H2 and movement in deferred income.
• US momentum: new customer adds, Asta Vision roll‑outs and revenue mix.
• PEMAC performance against earn‑out hurdles and CMMS cross‑sell with ShireSystem.
• Recovery (or replacement) of visualisation services demand in Germany.
• Cash conversion and any further M&A, given the debt‑free position.

Overall verdict: a confident, well‑balanced half. Recurring revenue records are doing exactly what they should – lifting profits, funding innovation and supporting a higher dividend.