Eleco PLC on Tuesday reported flat revenue and a drop in profitability but rewarded shareholders with a special dividend as it continued its shift to becoming a software as a service business.

Revenue in the year to December 31 at the London-based construction software developer totalled £26.6 million, in line with market expectations but down from £27.3 million in the prior year.

Eleco said the dip in revenue was a consequence of ‘our SaaS transition as we move away from upfront perpetual licences.’

In ‘undergoing a shift to a software as a service business we expected a reduction in revenues during the first 18 months of the process as customers moved from perpetual licences to subscription payments, with total revenues increasing after that time,’ the company said.

The company said EBITDA of £5.2 million and pretax profit of £2.9 million were slightly ahead of market expectations but were down from £7.2 million and £3.9 million respectively in 2021, reflecting the impact of the SaaS transition. Basic earnings per share of 2.9 pence per share compared to 3.3 pence in 2021.

Eleco described the performance as robust given significant macro-economic and geo-political upheaval, high inflation and a tight labour market.

The total dividend for the year of 1.28 pence was more than double last year’s 0.60 pence and included a special payout of 0.58 pence in relation to cash proceeds from the sale of the non-core Arcon Architectural CAD business announced in February.

Chief Executive Jonathan Hunter said he expects ‘revenues will accelerate in the second half of 2023 enabling the group to return to revenue growth in 2023.’

Shares in Eleco rose 2.6% to 78.00 pence in London on Tuesday.

Copyright 2023 Alliance News Ltd. All Rights Reserved.