Construction remains one of the world’s least digitised industries - yet it is also one with the most to gain from technology. Chronic project delays, cost overruns, labour shortages and poor asset control are pushing contractors and property owners towards software that can improve planning, productivity and quality while reducing waste and risk. Meanwhile, tighter safety, sustainability and reporting requirements are making accurate, real-time data increasingly essential.
From AI-assisted project scheduling and carbon estimating to proactive asset maintenance and buildings, digitisation has become mission-critical.
Enter Elecosoft , a BuildTech software developer with deep domain expertise, whose solutions help customers plan, estimate, construct and maintain physical equipment. Its products span construction scheduling, project portfolio management, cost estimation and computerised maintenance management - addressing markets worth >$11bn and growing at high-single to low-double digit rates.
Today’s positive and ‘in line’ H1’26 trading update, Annualised Recurring Revenue (ARR) jumped 16% to £35.5m (£30.7m Jun’25), with organic ARR climbing an even more impressive 23% & NRR at c.110% thanks to new logo wins (eg global medical devices group in US) and continued robust client upselling. Similarly recurring revenue increased 14% to £16.9m - equivalent to 85% of group turnover vs 81% last year - providing excellent forward visibility. Whilst turnover rose 15% organically to £19.9m, after adjusting for M&A and the disposal of the Veeuze visualisation operation.
Indeed I’ve been a shareholder since 2015, and believe these are the best LFL top line growth numbers I’ve ever seen from the firm.
Elsewhere, disposing of the loss-making Veeuze unit should improve EBITDA margins too alongside freeing up management time. February’s £2.3m Kivue acquisition expands Eleco’s reach into managing multiple complex projects simultaneously (re inter-dependencies). Plus Eleco is already embedding AI into its products with the recent successful launch of Asta Vision Plus - connecting project data with third-party and AI systems.
CEO Jonathan Hunter saying: Eleco produced a “strong H1’26” performance, with record ARR providing robust visibility into H2. Encouragingly too, Eleco closed June with £15.4m of net cash (18p/share) despite £5.5m of acquisition, dividend and other non-operational outflows. So “with the ongoing digitalisation of construction and asset-intensive industries, the Board remains confident in delivering FY’26 results in line with market expectations."
Looking ahead, Cavendish forecasts FY26 revenue of £40.5m, adjusted EBITDA of £10.7m and EPS of 6.7p. At 115p, this equates to 2.0x EV/sales, roughly 7.5x EV/EBITDA and 17.2x earnings, versus their 250p/share price target.
A material discount to global Buildtech peers (c. 5x sales & 13x-17x EBITDA) that looks hard to justify, especially given Eleco’s 85% recurring revenues, 89% gross margins, strong cash generation and double-digit secular growth. Onwards & upwards.