Eleco PLC on Tuesday said a drop in its half-year profit resulted from rising costs and posted a higher interim dividend.

Eleco is an AIM-listed London-based specialist provider of software and related services to the built environment through its operating brands Elecosoft and Veeuze.

In the six months that ended on June 30, Eleco said pretax profit fell by 31% to £1.3 million from £1.7 million a year prior, as selling and administrative costs grew by 10% to £11.0 million.

Revenue grew marginally by 0.7% to £13.5 million from £13.4 million the year before, due to its transition to a software as a service business, the firm said.

Eleco upped its interim dividend by 25% to 0.25 pence per share from 0.20p per share in the first six months of 2022.

Looking ahead, Eleco said its transformation to a SaaS business is now ‘well advanced’, and expects ‘significant operational and financial benefits’ as a result.

Interim Chair Mark Castle said: ‘We are confident that we will continue to weather economic and market headwinds given our clearly defined and executed strategy for growth. Our technological solutions help our customers drive efficiencies in these challenging environments.

‘We are well positioned to grow our international markets and see continued progress and positive momentum for the future, with current trading in line with our internal expectations for the full year.’

Shares in Eleco were up 4.4% at 83.00 pence each in London on Tuesday afternoon.

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