Eleco (LSE:ELCO) reported a strong first-half performance, achieving record annualised recurring revenue as demand for its software portfolio continued to grow. Annualised recurring revenue (ARR) increased 16% to approximately £35.5 million, while organic ARR rose 23%, marking a new high for the group. Total recurring revenue climbed 14% to around £16.9 million and now accounts for 85% of overall revenue. Headline revenue also increased 8% to approximately £19.9 million, supported by solid organic growth and healthy cash generation.
AI innovation and portfolio reshaping strengthen strategic focus
The company ended the period debt-free with cash of £15.4 million, demonstrating strong financial discipline despite acquisition-related spending, dividend payments and other non-operational cash outflows.
During the first half, Eleco streamlined its business by disposing of its non-core Veeuze visualisation unit, allowing management to concentrate on its core software operations. The group also expanded its artificial intelligence offering through the launch of Asta Vision Plus and Asta Estimate, while Pemac continued to grow its presence in the US medical manufacturing market. In addition, the business completed its rebranding under the Eleco name to strengthen its identity across international markets.
Strong balance sheet supports long-term outlook
Eleco’s outlook remains underpinned by a strong financial position, with no debt, robust free cash flow generation and continued recurring revenue growth providing a solid platform for future expansion. However, these strengths are partly offset by a significant decline in net income recorded during 2025.
From a technical perspective, the shares continue to exhibit positive long-term momentum, although indicators suggest the stock is approaching overbought territory. Valuation appears broadly in line with the wider market, while investors also benefit from a modest dividend yield.
About Eleco
Eleco plc is an AIM-listed software provider focused on the built environment, offering solutions for project management, estimating, building information modelling (BIM), property management and facilities management. Through brands including Eleco, Elecosoft, BestOutcome, Pemac and Eleco Technologies, the company delivers software supporting every stage of the building lifecycle.
Its products are used by customers across construction, engineering and asset-intensive industries from project planning and design through construction, fit-out and long-term facilities management, helping organisations improve digitalisation, efficiency and regulatory compliance.
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