REG - Elecosoft PLC - Interim Results <Origin Href="QuoteRef">ELCO.L</Origin> - Part 1

ElecoAnnouncement

25/09/2017 07:07

RNS Number : 6394R
Elecosoft PLC
25 September 2017
25 September 2017
Elecosoft plc
("Elecosoft", the "Company" or the "Group")
Interim Results
For the Six Months Ended 30 June 2017
Elecosoft plc (AIM: ELCO), the AIM-listed international construction software specialist, is pleased to announce its unaudited results for the six months ended 30 June 2017.
Financial Highlights
Revenue up 14% to 10,010,000 (2016 H1: 8,769,000) of which 48% was from recurring maintenance and support revenue (2016 H1: 47%)
 Operating profit up 76% to 1,059,000 (2016 H1: 601,000)
 Profit before tax up 81% to 1,007,000 (2016 H1: 557,000) 
 EBITDA up 66% to 1,598,000, (2016 H1: 963,000)
 Expensed product development of 1,054,000 (2016 H1: 1,258,000) with a further 494,000 capitalised of new software programmes (2016 H1: 175,000)
 Basic earnings per share up 83% to 1.1p (2016 H1: 0.6p)
 Increased interim dividend of 0.20p proposed, (2016 H1: 0.15p)
At constant exchange rates
 Revenue of 9,504,000, up 8% (2016 H1: 8,769,000)
 65% rise in operating profit to 990,000 (2016 H1: 601,000)
 68% rise in profit before tax to 938,000 (2016 H1: 557,000)
Operational Highlights
 Introduced Powerproject Software as a Service (SaaS) in the UK
 Introduced Staircon into the Canadian and Australian markets
 Continued progress with cross-selling Powerproject to new and existing customers in Sweden
 Development of the IconVR surveying service with its first client adoption in August 2017
 Elecosoft's total product portfolio showcased at Europe's largest construction exhibition, BAU Munich in Germany in January 2017
 Increased investment in the period in both existing and new software products, including new SaaS web applications.
 New Board appointments included Anders Karlsson, Executive Director; Kevin Craig, Non-Executive Director; and Serena Lang as Non-Executive Deputy Chairman
Executive Chairman, John Ketteley said: "Elecosoft delivered a positive performance in the first six months of 2017, with growth in all our geographic regions. We also decided to unify all our software brands under the Elecosoft brand worldwide. This is a momentous and positive step for all involved in the Elecosoft group and I am confident that it is a decision that will benefit all our customers, employees and shareholders as we move forward. We have also made an excellent start to the second half of the year." 
About Elecosoft plc
Elecosoft is listed on the Alternative Investment Market in London (AIM: ELCO). It is a specialist international provider of software and related services to the architectural, engineering, construction and digital marketing industries from centres of excellence in the UK, Sweden, Germany and the US. Elecosoft's market leading software solutions are developed by teams in the United Kingdom, Sweden and Germany; and its software programs cover project management, construction site management, estimating, timber engineering, 3D design and visualisation, and cloud based digital marketing solutions. 
Chairman's Statement
I am pleased to report an improved trading performance for the six months ended 30 June 2017. Elecosoft's unaudited profits before tax in respect of the period were significantly higher than those achieved in the same period last year; and it also increased its cash generation from operations and strengthened its financial position in the period under review. As a consequence, the Board has declared a significantly increased interim scrip dividend with a cash alternative, details of which are set out below. 
Trading Performance
 
Unaudited Group revenue in the period increased by 14 per cent to 10,010,000 (2016: 8,769,000); 33 per cent of Group revenue was generated from our UK operations, and 67 per cent from our overseas operations and customers. 
Unaudited revenue in the UK for the period amounted to 3,325,000 (2016: 2,825,000), an increase of 18 per cent. This included 419,000 generated by ICON, which was acquired by Elecosoft in October 2016. Revenue of our overseas operations for the period under review amounted to 6,685,000 (2016: 5,944,000), an increase of 12 per cent.
License sales in the period under review increased from 2,738,000 to 2,859,000, an increase of 4 per cent; recurring revenue in the period amounted to 4,847,000 (2016: 4,102,000), an increase of 18 per cent; and services revenue was 2,304,000 (2016: 1,929,000), growing 19 per cent. 
Unaudited operating profit for the period under review was 1,059,000, (2016: 601,000), an increase of 76 per cent after charging software development costs and amortization totalling 1,474,000 (2016: 1,541,000) made up of 1,054,000 of development costs (2016: 1,258,000) and amortization of intangible assets of 420,000 (2016: 283,000) for the period.
EBITDA for the period under review was 1,598,000, (2016: 963,000), an increase of 66 per cent.
Unaudited profit before tax for the period was 1,007,000, (2016: 557,000), an increase of 81 per cent. Unaudited earnings for the period were 804,000 (2016; 431,000), equivalent to basic unaudited earnings per share of 1.00p, which compare with unaudited earnings for the same period last year of 431,000, and basic unaudited earnings per share of 0.6p.
Financial Performance 
The Group generated cash from operations in the period under review of 2,277,000 compared with 1,439,000 of cash generated in the same period last year. This improvement in our financial position has facilitated our continuing investment in our software development activities in the period.
The Group had net cash at 30 June 2017 of 259,000 after financing the acquisition of ICON in October 2016 compared to 302,000 at 30 June 2016. Our net cash position at 30 June 2017, comprised Sterling Borrowings of 2.9m, finance lease obligations of 0.3m, more than offset by cash balances totalling 3.5m held principally in Swedish Krona, Euro's and US Dollar's.
Our Sterling borrowings at 30 June 2017 included 2,765,000 of medium term Sterling borrowings which were raised from Barclays Bank as part of the financing of the acquisition of ICON in May 2016. The Directors consider that in the absence of unforeseen circumstances, the Group would be in a position to comfortably service and repay its medium-term Sterling borrowings in accordance with their terms.
Software Development 
The volume, quality and innovation in the output of the software produced by our software teams located in the UK, Sweden and Germany, have been major factors in the growth of Elecosoft in recent years, into a profitable international provider of outstanding market leading construction software.
Software development expenditure in the period under review increased to 1,548,000 (2016: 1,433,000) and represents the equivalent of 16 per cent of sales in the period (2016: 16 per cent). Our commitment to the continuing enhancement of our current market leading construction software portfolio reflects Elecosoft's policy commitment to our customers to maintain and enhance our software offering worldwide now under the strong Elecosoft brand. 
Development expenditure capitalised in the period was 494,000 (2016: 175,000). The capitalised development projects are spread across Germany, Sweden and the UK with the majority of our latest investment programs involving the introduction of SaaS web applications, which will enhance our project management and site management offerings. 
Trading Highlights
We continued to make progress in the period, with the integration of ICON following the acquisition in October 2016. I am therefore pleased to report that Elecosoft's IconSystem which is the market leading Property Information Management system in the retail sector, is now becoming recognised in other property management sectors. It gives us pleasure to mention that McCarthy & Stone, the UK's leading retirement housebuilder, has pioneered the use of IconSystem to improve its planning, design, fabrication, construction regimes and also to improve the co-ordination of its build process and I would like to take this opportunity to congratulate McCarthy & Stone on its achievement in winning the prestigious 'Digital Construction Award', which was presented at the recent Construction Excellence Awards. 
In the UK, we focused on sales and support efforts to our existing customers by concentrating on the provision to them of software tools fully scoped for their businesses and as a consequence, we noted that our Powerproject BIM and Site Progress Mobile programs gained more acceptance in the construction industry. We successfully launched our SaaS offering of Powerproject in the UK in the period. Product updates in Powerproject and BIM were also demonstrated and well received by our client base in the UK at eight national user forums, which attracted more than 300 attendees.
Our Swedish colleagues also succeeded in securing major orders in Australia and Canada for the sale of Staircon, Elecosoft's leading staircase design and manufacturing software.
Management Changes
Graham Spratling resigned as Finance Director of Elecosoft in January after ten years of service with the Group and we wish him well. His successor, David Pearson, who joined the Group in February 2017 left the Group in August 2017 and we have taken steps to recruit a new Finance Director as his replacement. Our Nominations Committee is currently undertaking a search for a new Finance Director and will announce his or her appointment in due course.
I would like to welcome Kevin Craig's appointment as a Non-Executive Director on 27 March 2017. Kevin Craig, aged 45, is Founder and CEO of PLMR which is one of the UK's top communication firms. Kevin has spent his career across the public and private sector advising a whole range of clients from political lobbying, PR to crisis management.Most recently Kevin has been involved with a number of significant transactions across the healthcare and infrastructure sectors.
Also, I am pleased to announce the appointment of Anders Karlsson as an Executive Director on 27 March 2017. Per Erik Anders Karlsson (Anders), aged 52, has over 23 years' experience across the software development, digital and industrials sectors and has held numerous Chief Executive and board level positions during his career. Anders is CEO of the Company's wholly owned subsidiary, Consultec Elecosoft AB, overseeing the successful expansion phase of the company's lifecycle. Previously he held similar senior roles within the software development and digital space including CEO of Zone Systems between 2010 and 2014 and Managing Director at Consultec Byggprogram AB between 2005 and 2010. Anders has also held a board position at Visit Skelleftea.
Dividend
Having regards to Elecosoft's strong trading performance and cash generation in the period under review and a good start to the second half,the Board has decided to declare an increased scrip dividend of 0.20p per ordinary share or alternative cash dividend of 0.20p per ordinary share (2016: cash dividend 0.15p) an increase of 33%, covered 5.5 times by unaudited earnings for the period of 1.1p per ordinary share. 
The scrip reference price is 43.25p calculated from the average of the closing price for an ordinary share of the company as derived from the daily official list of the London Stock Exchange during the period of five dealing days ending 22 September 2017.The interim dividend will be paid on 6 November 2017 to shareholders on the register at the close of business on 6 October 2017 and the ex-dividend date will be 5 October 2017. 
Outlook
Elecosoft delivered a positive performance in the first six months of 2017, with growth in all geographic regions and we have enjoyed an excellent start to the second half. However, we are not complacent and we will remain focused and we will make every effort to meet any challenging and uncertain conditions that may arise in the markets we serve. In doing so, we will continue to concentrate our efforts on the development of the market leading software programs that our customers require and in doing so, I am confident that as we do so, we shall be able to rely, as we always do, on the close co-operation of our customers, for which we thank them. 
I am confident that our decision to unify all our software brands under the Elecosoft brand. This will facilitate the cross-selling of our present product range to the construction industry in the markets we serve. It will also assist us to accelerate the implementation of the marketing and communications strategies in markets other than the construction markets in which we have concentrated our efforts thus far. Thus, we regard the adoption of Elecosoft as our unifying brand as a momentous and positive step for Elecosoft plc, which will benefit our customers, our employees and our shareholders, and we look forward to the future with confidence. 
Condensed Consolidated Income Statement
For the six months ended 30 June 2017
six months to 30 June
Year Ended
2017
2016
31 December
(unaudited)
(unaudited)
2016
Notes
'000
'000
'000
(restated)
Revenue
3,4
10,010
8,769
17,795
Cost of sales
(1,293)
(1,179)
(2,374)
Gross profit
8,717
7,590
15,421
Operating expenses before amortisation of intangible assets, acquisition expenses and termination payments
(7,238)
(6,597)
(12,818)
Amortisation of intangible assets
(420)
(283)
(631)
Operating expenses before acquisition expenses and termination payments
(7,658)
(6,880)
(13,449)
Operating profit before acquisition expenses and termination payments
1,059
710
1,972
Acquisition expenses
-
-
(212)
Former Directors' termination payments
-
(109)
(166)
Selling and administrative expenses
(7,658)
(6,989)
(13,827)
Operating profit 
4,5
1,059
601
1,594
Finance income
6
-
2
3
Finance cost
6
(52)
(46)
(93)
Profit before tax
1,007
557
1,504
Tax
(203)
(126)
(261)
Profit for the financial period
804
431
1,243
Attributable to:
Equity holders of the parent
804
431
1,243
Earnings per share
Basic earnings per share
7
1.1
p
0.6
p
1.7
p
Diluted earnings per share
7
1.0
p
0.6
p
1.6
p
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2017
six months to 30 June
Year Ended
2017
2016
31 December
(unaudited)
(unaudited)
2016
'000
'000
'000
Profit for the period
804
431
1,243
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss:
 Translation differences on foreign operations
(23)
76
92
Other comprehensive income net of tax
(23)
76
92
Total comprehensive income for the period
781
507
1,335
Attributable to:
Equity holders of the parent
781
507
1,335
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2017
Share capital
Share premium
Translation reserve
Other reserve
Retained earnings
Total
'000
'000
'000
'000
'000
'000
At 1 January 2017
771
578
(80)
(339)
8,786
9,716
Dividends
-
-
-
-
(135)
(135)
Share-based payments
-
-
-
6
-
6
Transactions with owners
-
-
-
6
(135)
(129)
Profit for the period
-
-
-
-
804
804
Other comprehensive income:
Exchange differences on translation of net investments in foreign operations
-
-
(23)
-
-
(23)
Total comprehensive income for the period
-
-
(23)
-
804
781
At 30 June 2017 (unaudited)
771
578
(103)
(333)
9,455
10,368
Share capital
Share premium
Translation reserve
Other reserve
Retained earnings
Total
'000
'000
'000
'000
'000
'000
At 1 January 2016
749
-
(172)
(338)
7,654
7,893
Share-based payments
-
-
-
(9)
-
(9)
Transactions with owners
-
-
-
(9)
-
(9)
Profit for the period
-
-
-
-
431
431
Other comprehensive income:
Exchange differences on translation of net investments in foreign operations
-
-
76
-
-
76
Total comprehensive income for the period
-
-
76
-
431
507
At 30 June 2016 (unaudited)
749
-
(96)
(347)
8,085
8,391
Share capital
Share premium
Translation reserve
Other reserve
Retained earnings
Total
'000
'000
'000
'000
'000
'000
At 1 January 2016
749
-
(172)
(338)
7,654
7,893
Dividends
-
-
-
-
(111)
(111)
Share-based payments
-
-
-
13
-
13
Elimination of cancelled share-based payments
-
-
-
(14)
-
(14)
Issue of share capital
22
578
-
-
-
600
Transactions with owners
22
578
-
(1)
(111)
488
Profit for the period
-
-
-
-
1,243
1,243
Other comprehensive income:
Exchange differences on translation of net investments in foreign operations
-
-
92
-
-
92
Total comprehensive income for the period
-
-
92
-
1,243
1,335
At 31 December 2016
771
578
(80)
(339)
8,786
9,716
Condensed Consolidated Balance Sheet
At 30 June 2017
30 June
2017
2016
31 December
(unaudited)
(unaudited)
2016
Notes
'000
'000
'000
Non-current assets
Goodwill
11,487
10,237
11,469
Other intangible assets
9
3,434
1,899
3,321
Property, plant and equipment
786
596
868
Total non-current assets
15,707
12,732
15,658
Current assets
Inventories
3
5
11
Trade and other receivables
2,871
2,679
3,674
Current tax assets
77
213
67
Cash and cash equivalents
3,510
2,540
2,576
Total current assets
6,461
5,437
6,328
Total assets
22,168
18,169
21,986
Current liabilities
Bank overdraft
10
(179)
(541)
(339)
Borrowings
10
(790)
(750)
(790)
Obligations under finance leases
(123)
(158)
(163)
Trade and other payables
(1,050)
(1,068)
(1,459)
Provisions
(243)
(116)
(228)
Current tax liabilities
(233)
(73)
(89)
Accruals and deferred income
11
(6,398)
(5,898)
(6,003)
Total current liabilities
(9,016)
(8,604)
(9,071)
Non-current liabilities
Borrowings
10
(1,975)
(597)
(2,370)
Obligations under finance leases
(184)
(192)
(218)
Deferred tax liabilities
(584)
(218)
(570)
Non-current provisions
(41)
(167)
(41)
Total non-current liabilities
(2,784)
(1,174)
(3,199)
Total liabilities
(11,800)
(9,778)
(12,270)
Net assets
10,368
8,391
9,716
Equity
Share capital
771
749
771
Share premium account
578
-
578
Translation reserve
(103)
(96)
(80)
Other reserve
(333)
(347)
(339)
Retained earnings
9,455
8,085
8,786
Equity attributable to shareholders of the parent
10,368
8,391
9,716
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2017
six months to 30 June
Year Ended
2017
2016
31 December
(unaudited)
(unaudited)
2016
'000
'000
'000
Cash flows from operating activities
Profit before tax
1,006
557
1,504
Net finance costs
52
43
90
Depreciation charge
119
79
207
Amortisation charge
420
283
631
Profit on sale of property, plant and equipment
(8)
(20)
(28)
Share-based payment charge
6
(9)
13
Decrease in provisions
(5)
(60)
(75)
Cash generated in operations before working capital movements
1,590
873
2,342
Decrease in trade and other receivables
891
958
403
Decrease/(increase) in inventories and work in progress
8
5
(1)
Decrease in trade and other payables
(212)
(397)
(322)
Cash generated in operations
2,277
1,439
2,422
Interest paid
(54)
(50)
(85)
Interest received
-
2
3
Net income tax paid
(50)
(101)
(17)
Net cash inflow from operating activities
2,173
1,290
2,323
Investing activities
Purchase of intangible assets
(531)
(218)
(754)
Purchase of property, plant and equipment
(62)
(128)
(449)
Acquisition of subsidiary undertakings net of cash acquired
-
(63)
(1,700)
Proceeds from sale of property, plant, equipment and intangible assets
96
48
100
Net cash outflow from investing activities
(497)
(361)
(2,803)
Financing activities
Proceeds from new bank loan
-
-
3,160
Repayment of bank loans
(395)
(375)
(1,722)
Repayments of obligations under finance leases
(133)
(73)
(153)
Equity dividends paid
(135)
-
(111)
Net cash (outflow)/inflow from financing activities
(663)
(448)
1,174
Net increase in cash and cash equivalents
1,013
481
694
Cash and cash equivalents at beginning of period
2,237
1,283
1,283
Effects of changes in foreign exchange rates
81
235
260
Cash and cash equivalents at end of period
3,331
1,999
2,237
Cash and cash equivalents comprise:
Cash and short term deposits
3,510
2,540
2,576
Bank overdrafts
(179)
(541)
(339)
3,331
1,999
2,237
Notes to the Condensed Consolidated Financial Statements 
1. General information
The company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 66 Clifton Street, London, EC2A 4HB.
The company is listed on the Alternative Investment Market ("AIM")
The condensed consolidated interim financial information does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group's consolidated financial statements for the year ended 31 December 2016 have been filed at Companies House. The audit report was not qualified and did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006.
2. Basis of preparation
The condensed consolidated interim financial statements for the six months to 30 June 2017 have been prepared in accordance with the accounting policies which will be applied in the twelve months financial statements to 31 December 2017. These accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and as adopted for use in the European Union that are effective at 30 June 2017.
The condensed consolidated interim financial statements are unaudited and have not been subject to review. They do not include all the information and disclosures required in the annual financial statements, and therefore should be read in conjunction with the Group's published financial statements as at 31 December 2016. The comparative figures for the year ended 31 December 2016 are not the Company's statutory accounts for that period but have been extracted from these accounts. 
The condensed consolidated interim income statement for 2016 was restated for the reclassification of a director's termination payment that was accrued in December 2016. These costs were reclassified to directors' termination payments in the income statement. 
The Directors, having considered the Group's current financial resources, have concluded that they are adequate for the Group's present requirements. Therefore, the condensed consolidated interim financial information has been prepared on the going concern basis. 
New accounting standards and interpretations are effective for the first time in the current period but have had no impact on the results or financial position of the Group. Furthermore, new standards, new interpretations and amendments to standards and interpretations that have been issued but are not effective for the current period have not been adopted early.
Estimates
Application of the Group's accounting policies in preparing condensed consolidated interim financial statements requires management to make judgements and estimates that affect the reported amount of assets and liabilities, revenues and expenses. Actual results may ultimately differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2016. 
Risks and uncertainties
A summary of the Group's principal risks and uncertainties was set out on page 21 of the 2016 annual report and accounts. The Board considers these risks and uncertainties are still relevant to the current financial year and the impact of changes in the UK economy is reviewed in the Chairman's statement contained in this report.
The Interim Report was approved by the Directors on 20 September 2017.
3. Revenue
Revenue disclosed in the income statement is analysed as follows:
Year ended
six months to 30 June
31 December
2017
2016
2016
'000
'000
'000
Licence sales
2,859
2,738
4,955
Recurring maintenance and support revenue
4,847
4,102
8,622
Services income
2,304
1,929
4,218
10,010
8,769
17,795
4. Segmental information
Operating segments
The Group comprises of software business activity only and as such the information is presented in line with management information, as one segment.
Adjusted operating profit represents operating profit before tangible asset depreciation, expensed product development costs, intangible asset amortisation, acquisition expenses and former director's termination payments. Development project costs are expensed as incurred unless they meet the accounting policy requirements for capitalisation. The projects capitalised in the six months to 30 June 2017 are explained in the Chairman's Statement and the accounting policy requirements are set out on page 47 of the 2016 annual report and accounts.
(restated)
Year ended
six months to 30 June
31 December
2017
2016
2016
'000
'000
'000
Revenue
10,010 
8,769 
17,795 
Adjusted operating profit
2,652 
2,330 
4,778 
Depreciation charge
(119) 
(79) 
(207) 
Product development costs
(1,054) 
(1,258) 
(1,968) 
Operating profit before amortisation of intangible assets, acquisition expenses and termination payments
1,479 
993 
2,603 
Amortisation of intangible assets
(420) 
(283) 
(631) 
Acquisition expenses
-
-
(212) 
Former Director's termination payments
-
(109) 
(166) 
Operating profit
1,059 
601 
1,594 
Net finance cost
(52) 
(44) 
(90) 
Segment profit before tax
1,007 
557 
1,504 
Tax
(203) 
(126) 
(261) 
Segment profit after tax
804 
431 
1,243 
Product development costs expensed
(1,054) 
(1,258) 
(1,968) 
Internal development costs capitalised
(494) 
(175) 
(625) 
Total development costs
(1,548) 
(1,433) 
(2,593) 
Operating profit
1,059 
601 
1,594 
Amortisation of intangible assets
420 
283 
631 
Depreciation charge
119 
79 
207 
EBITDA
1,598 
963 
2,432 
Geographical, product and sales channel information
Revenue by geographical segment represents revenue from external customers based upon the geographical location of the customer. 
six months to 30 June
Year ended
31 December
2017
2016
2016
'000
'000
'000
UK
3,325
2,825
5,498
Scandinavia
3,638
3,451
6,745
Germany
1,565
1,425
2,982
USA
350
236
601
Rest of Europe
999
717
1,653
Rest of World
133
115
316
10,010
8,769
17,795
Revenue by product group represents revenue from external customers.
Year ended
six months to 30 June
31 December
2017
2016
2016
'000
'000
'000
Project management
4,559
4,272
8,452
Site management
225
229
474
Estimating
1,521
1,507
2,964
Engineering
1,672
1,389
2,827
CAD/Design
562
573
1,137
Visualisation
979
799
1,821
Information management
492
-
120
10,010
8,769
17,795
The Group utilises resellers to access certain markets. Revenue by sales channel represents revenue from external customers.
Year ended
six months to 30 June
31 December
2017
2016
2016
'000
'000
'000
Direct
9,398
8,273
16,674
Reseller
612
496
1,121
10,010
8,769
17,795
5. Operating profit
Operating profit for the period is after charging/(crediting) the following items: 
Year ended
six months to 30 June
31 December
2017
2016
2016
'000
'000
'000
Software product development
1,054
1,258
1,968
Depreciation of property, plant and equipment
119
79
207
Amortisation of intangible assets acquired
255
173
389
Amortisation of capitalised development costs
165
110
242
Profit on disposal of property, plant and equipment
(8)
(20)
(28)
Foreign exchange (gains)/losses
13
(10)
(73)
Acquisition expenses
-
-
212
Directors termination payment
-
109
166
6. Net finance (cost)/income
Finance income and costs disclosed in the income statement is set out below: 
Year ended
six months to 30 June
31 December
2017
2016
2016
'000
'000
'000
Finance income:
 Bank and other interest receivable
-
2
3
Finance costs:
 Bank overdraft and loan interest
(49)
(41)
(84)
 Finance leases and hire purchase contracts
(3)
(5)
(9)
Total net finance cost
(52)
(44)
(90)
7. Earnings per share
The calculations of the earnings per share are based on profit after tax attributable to the ordinary equity shareholders of the Company and the weighted average number of shares in issue for the reporting period.
Year ended
six months to 30 June
31 December
2017
2016
2016
Profit attributable to shareholders
804,000
431,000
1,243,000
Basic weighted average number of shares
76,192,757
73,970,534
74,433,243
Dilutive effect of share options
1,028,721
294,000
1,029,000
Diluted weighted average number of shares
77,221,478
74,264,534
75,462,243
Earnings per share
Basic earnings per share
1.1
p
0.6
p
1.7
p
Diluted earnings per share
1.0
p
0.6
p
1.6
p
Shares held by the Employee Share Ownership Trust are excluded from the weighted average number of shares in the period.
8. Dividends
The Board have recommended the payment of an interim scrip dividend of 0.20p per ordinary share or cash dividend alternative of 0.20p per ordinary share (2016 H1: cash dividend 0.15p) Dividends of 134,000 (2016 H1: nil) were paid during the six months to June 2017.
9. Other intangible assets
Other intangible assets comprise capitalised development costs, acquired customer relationships and purchased intangible assets. Additions in the six months to 30 June 2017 represent purchased intangible assets of 37,000 (2016: 43,000) and internal development costs capitalised of 494,000 (2016: 175,000) Internal development relates to software development projects that meet the accounting policy criteria for capitalisation. 
10. Borrowings
The bank loans and overdrafts are repayable as follows: 
at 30 June
at 30 June
at 31 December
2017
2016
2016
'000
'000
'000
In one year or less
969
1,291
1,129
Between one and two years
790
597
790
Between two and five years
1,185
-
1,580
2,944
1,888
3,499
11. Accruals and deferred income
at 30 June
at 30 June
at 31 December
2017
2016
2016
'000
'000
'000
Accruals
1,760
1,696
1,602
Deferred income
4,638
4,202
4,401
6,398
5,898
6,003
Deferred income represents income from software maintenance and support contracts and is taken to revenue in the income statement on a straight line basis in line with the service and obligations over the term of the contract.
12. Related Party Disclosures
Transactions between Group undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note. 
The Directors of the Company had no material transactions with the Company during the six months to 30 June 2017, other than a result of service agreements. An amount of 3,000 (2016: 3,000) was paid to JHB Ketteley & Co Limited for a contribution to the office costs at Burnham-on-Crouch.
For further information please contact:
Elecosoftplc
JHB Ketteley, Executive Chairman
Jonathan Hunter, Group Marketing & Business Development Director
www.elecosoft.com
Tel: 0207 422 0044
finnCap Ltd
Adrian Hargrave / Kate Bannatyne (Corporate Finance)
Camille Gochez (Corporate Broking)
Tel: 0207 220 0500
Redleaf Communications
Elisabeth Cowell / David Ison
/ Fiona Norman
Tel: 0207 382 4730
elecosoft@redleafpr.com

This information is provided by RNS
The company news service from the London Stock Exchange
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