Eleco

Selling into the under-fire construction sector has not proved too taxing for building systems and software specialist Eleco, as first-half results show impressive growth.

For the six months to December sales rose 36% to £39.4m, pre-tax profits by 48% to £3.7m and earnings by 24% to 4.5p. Management, led by veteran entrepreneur John Kettley, are confident enough of prospects, having lifted the dividend 43% too, to 1p.

Three of the group’s four divisions – pre-cast concrete, building components and software – outperformed the comparable period last year, more than compensating for the connector plate business, which suffered from exposure to the slowing house-building sector in the UK, Ireland and South Africa.

Milbury Systems, an acquisition taking the group into the new areas of flood defences, agricultural and blast walls, was bolted onto the concrete arm, which Kettley says now has its largest ever order book in areas such as budget hotels and university accommodation.

Building components doubled orders for its timber-frame products as it gained visibility in the market, especially for affordable housing projects and Kettley says roofing scored higher orders too and is bolstered by strong work for schools. The software division was turned around from losses to profits, with 2006 acquisition Asta making a good contribution and the consumer-facing visualisation software product signed up by builder Wimpey as well as Channel 4’s popular Grand Designs programme.

For the full year, upgraded forecasts from house broker Collins Stewart point to earnings per share of 10.8p. The shares, tipped here last spring at 93.5p and having topped 110p, are worth holding for the long term, but may be subject to investor wariness of the sector.