Elecosoft is a BuildTech pioneer, developing on-premise and Cloud/SaaS software for the Architectural, Engineering, Construction and Operator (AECO) and digital marketing industries. Its award winning 6D solutions (>100,000 users) cover project planning, estimating, design/CAD, visualisation, site operations/maintenance and Building Information Management (BIM). BIM acts as the oil providing data/info to the various interconnecting modules.
How do the world’s best interior designers create their perfect homes? Talent plays a big factor, however they also use top notch visualisation software to quickly & easily modify a property’s layout, aesthetics and ambiance. Enter ‘Active Online Gmbh’ based in Wesel, NW Germany and employing 29 staff. Its “cutting-edge” software allows consumers & homeowners to do exactly this. Swapping out the furniture, curtains & flooring, alongside changing the décor, wall colours, light fittings, fabrics & windows. All at the touch of a button in rich HD/3D graphics.
Not only can gains be made out of the takeover of Active Online from cost synergies , where we understand ELCO can reduce its 3rd party ‘image scanning’ bills by circa €150k pa, utilising AO’s in-house facilities. But, more importantly, also from integrating the business with its own rival interactive visualisation division ESIGN (10% sales, located 270km away in Hanover) – coupled with cross selling the solutions into each other’s extensive client lists (
All told, to us this looks an attractively priced, earnings accretive (in year 1) and materially value enhancing deal, for a profitable software expert at the forefront of BuildTech visualisation.
Lastly, this morning’s upbeat announcement reported that the ELCO business “continues to trade in line with its expectations, and its assessment of outlook & the market remains unchanged.”
Going forward, our 2019 turnover, PBT & EPS estimates have been upgraded to £27.2m, £4.3m & 4.3p respectively vs £24.9m, £4.0m & 4.1p before. Likewise, we have nudged up the valuation from 110p to 115p/share. Or >55% higher than today’s 73p - representing steep discounts vs peers across all key metrics.
