27th Mar 2018 13:19
LONDON (Alliance News) - Elecosoft PLC on Tuesday hiked its full-year dividend, as revenue and profit rose and said it is confident for the year ahead despite Brexit negotiations.
The AIM-listed firm proposed a final dividend of 0.40 pence for 2017, compared with 0.25p paid the year before, taking its total dividend for the year up 50% to 0.60p, having paid a dividend of 0.40p for 2016.
The stock was trading 9.4% higher at 55.80p per share on Tuesday.
The software company posted pretax profit of GBP2.3 million for 2017, up 53% from GBP1.5 million in 2016, as revenue grew 12% to GBP20.0 million from GBP17.8 million.
Elecosoft said that financial performance was helped by sales, favourable exchange rate, and integration of the Icon business in October 2016.
Direct sales grew 13% to GBP18.8 million from GBP16.7 million the prior year and resellers were up 8% to GBP1.2 million from GBP1.1 million, reflecting the group's strategy to accelerate revenue growth with partners.
The third of the group's turnover comes from the UK, with the rest of operating profits earned in Sweden, Germany, the Netherlands, Belgium and the US. The group said that, in relation to the Brexit vote in June 2016, it had benefited from the foreign currency translation against a weak pound.
Elecosoft Chief Executive Officer John Kettely told Alliance News that the company gained GBP800,000 on currency translation in 2016, as it moved money to its Swedish and German subsidiaries the week before the referendum. Moreover, the company does not trade from the UK to Europe, Finance Director Simon Morgan noted.
Elecosoft finished the year with GBP1.0 million in cash, compared with GBP1.3 million borrowings the year before. Morgan said that the company intends to "save" this money for future investment in new portfolio product development or acquisition opportunities.
The company's selling and administrative expenses grew slightly to GBP15.2 million from GBP13.8 million year-on-year, as it actively expanded its management team, Kettely noted.
Software development costs also saw a minor increase to GBP2.7 million, compared with GBP2.6 million in 2016.
Looking forward, Elecosoft said it performed "well" in the first months of its current financial year and remains confident for the year ahead.
"I am pleased to report that in 2017 Elecosoft improved its performance significantly, eliminated its net borrowings, strengthened its management team and made a strong start in the first quarter of 2018," Kettely added.
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