REG - Eleco PLC - Disposal of Subsidiary

ElecoAnnouncement

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RNS Number : 0582A  Eleco PLC  10 April 2026

RNS

10 April 2026

Eleco Plc

("Eleco", the "Group" or the "Company")

Disposal of non-core operation

Sale of Visualisation business reinforces strategic focus

The Board of Eleco plc (AIM: ELCO), the specialist software provider for the
built environment, is pleased to announce the sale of its wholly owned
subsidiary Veeuze GmbH ("Veeuze" or the "Subsidiary"), a German-based
visualisation business, to 3A Consult UG via a management buy-out (the
"Disposal").

The Board believe that the Disposal reinforces the Group's strategic focus on
its core and higher growth Building Lifecycle businesses and primary customer
verticals, and reflects a continued emphasis on shareholder value.

Under the terms of the agreement, the consideration for the Disposal is an
initial nominal cash amount of €1, payable on completion and a share of the
annual profit after tax over a 5-year period to 2030, capped at €250,000
payable in cash. The separation of the business is deemed to have occurred on
1 January 2026.  Any material cash proceeds from the profit share will be
used to support the Company's existing growth strategy.

Following a period of challenging market conditions, Veeuze became
increasingly non-core to the Group and required a level of ongoing investment
that was not aligned with Eleco's strategic priorities.  During the financial
year ended 31 December 2025, the Subsidiary experienced a decline in
performance, evidenced by lower revenues, continued operating losses, and, in
the second half of 2025,  the requirement for substantial cash injections to
sustain operations.

In the financial year ended 31 December 2025, based on management accounts,
the Subsidiary had revenues of c£3.7m and recorded a loss before tax of
c£1.3m. The Subsidiary has net liabilities of approximately £1.1m. The
Disposal will prevent ongoing losses and cash outflows associated with
Veeuze.

The Disposal has been structured to support the continuity and future
development of Veeuze under the Management ownership. In connection with the
Disposal, Eleco has agreed to provide a financing package of €1.5m (c£1.3m)
to Veeuze (the "Financing Package"). The Board has approved the commercial
terms of the Financing Package on an arm's length basis. This will be
repayable over a five‑year period to 31 December 2030, and will carry an
interest rate of ECB base rate plus 5.85% per annum (at a minimum of 8% per
annum or above).

The purchaser of the Subsidiary is a former-director of Veeuze and the
controlling shareholder of 3A Consult UG.  Consequently, the Disposal of
Veeuze and provision of the Financing Package are both related party
transactions pursuant to Rule 13 of the AIM Rules (the "Related Party
Transactions"). The independent Directors, (being all directors of Eleco)
consider, having consulted with the Company's nominated adviser, Cavendish
Capital Markets Limited, that the terms of the Related Party Transactions are
fair, reasonable and on an arm's length basis insofar as the Company's
shareholders are concerned.

 

Jonathan Hunter, Chief Executive Officer of Eleco plc, said:

"As previously reported, the operating and technological environment for our
visualisation business, Veeuze,  has been challenging in the last 24
months.  This reflects, among other factors, macroeconomic conditions in its
core DACH interior products market, tighter customer budgets and demand
patterns more closely linked to end-consumer confidence.

"This transaction reinforces our strategic focus on accelerating growth in our
core businesses.  It releases valuable management capacity to support
execution and future M&A activity. The disposal is expected to be
accretive to the Group's organic growth profile, profitability metrics and
cash generation, enhancing Eleco's long‑term growth potential."

"We are delighted that the Management has chosen to take the business forward
into its next chapter.  This transaction provides greater certainty for the
Veeuze business, its employees and its customers, and we wish them every
success under the new ownership structure."

 

For further information, please contact:

 Eleco plc                                   +44 (0)20 7422 8000
 Jonathan Hunter, Chief Executive Officer
 Neil Pritchard, Chief Financial Officer

 Cavendish Capital Markets Limited           +44 (0)20 7220 0500
 Geoff Nash / Seamus Fricker / Elysia Bough (Corporate Finance)
 Louise Talbot (Sales) / Harriet Ward (ECM)

 

About Eleco plc

Eleco plc is an AIM-listed (AIM: ELCO) specialist international provider of
software and related services to the built environment through its operating
brands Elecosoft, BestOutcome, Pemac, and Eleco Technologies from centres of
excellence in the UK, Ireland, Sweden, Germany, the Netherlands, Romania,
Australia and the USA.

The Company's software solutions are trusted by international customers and
used throughout the building lifecycle from early planning and design stages
to construction, interior fit out, asset management and facilities management
to support project management, estimation, Building Information Modelling
(BIM) and property management.

For further information please visit www.eleco.com
(http://www.elecosoft.com/) .

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