Eleco plc (5H3.F) Earnings Call Transcript

Good afternoon, and welcome to the Eleco plc investor presentation. [Operator Instructions] Before we begin, I'd just like to submit the following poll, which I kindly ask you to submit your responses to. I'd now like to hand over to CEO, Jonathan Hunter. Jonathan, good afternoon.

Good afternoon, everyone, and we're very pleased that you could join us, as Neil Pritchard, CFO, and myself take you through an excellent set of results for Eleco for the full year 2025. For those of you who may be new to the story, just as a reminder, we're a trusted technology partner for the built environment. We address mission-critical areas across the building life cycle from planning and estimating, that's time planning through to cost of construction and project delivery and maintenance and operations. We support experts in these industries to be more productive, have visibility, meet safety and compliance. And we do this through our talented people, which we're very proud of. We are a people business. We've got decades of experience and expertise and a passion for solving problems in the built environment and a culture that really is the foundation of our success. So highly engaged people are really driving that performance that we're seeing in the business. And we're driving that through our portfolio of best-of-breed software solutions -- they're best of breed across the building life cycle and CAD and visualization. And within each of these sort of brands is a suite of software that's proven to add value to customers. And therefore, a common theme you'll see is that we've got very high customer retention rates and a lot of expansion and upselling through the existing customer base. So it's really driving long-term value for both customers and shareholders. The group at a glance, we're 314 people. We're based in the U.K., Ireland, Scandinavia, Germany, Netherlands, Romania, U.S.A. and Australia. In those markets, we sell direct to customers. 97% of our revenues is direct through those direct relationships and 3% is through channel partners and resellers. We'll go into a bit more of the financials in a moment, but just as a high level, 81% of our revenues is SaaS and subscription, i.e., recurring, 1% perpetual and 18% services. And we've got very strong market positions in terms of customer brands. You see, for example, 90 of the top 100 U.K. general contractors. But this audience is very much on that technology adoption journey, and we're continuing to see further growth and upsells within this customer base. So to take you through to the results for 2025. The year ended ahead of market expectations as a year of solid progress for Eleco, both financially but also operationally and strategically. We delivered double-digit growth with momentum building up throughout the year. So actually, we ended the year as December being our high or largest month in terms of recurring revenue. And that recurring revenue multiplied by 12 is our ARR or annualized recurring revenue, which increased 29%. And the recurring revenue is, as I said, it's 81% of the total group revenue. So that's really what's driving the revenue growth is high-quality recurring revenues. The total recurring revenue, that's a reported recognized revenue that grew by 26%, which translated into meaningful adjusted EBITDA upside as well and the EBITDA are increasing by 32%. It reflects good execution of our strategy, our ARE strategy, which is really focused on retaining and expanding our client base and also careful cost control as the business is increasingly improving its operational leverage. Note, of course, the results are important, how we grow is also important and retention of customers remains very strong. Our net revenue retention rate is 110%, which is anything over 100% is very good. And we're increasingly seeing customers expand organically into more enterprise-led solutions, so standardizing with the product set across their organization. And that's excellent because it really drives that long-term value of revenues. From a strategic perspective, we continue to be active in terms of M&A, and we completed two targeted acquisitions, which strengthens our position in asset management as well as portfolio management. And at the same time, post year-end, we exited a non-core visualization business, which was based in Germany, really sharpening our focus on the high-growth, high-quality software revenues. So, I think that's covered everything in there. In terms of IT and technology, we continue to release meaningful updates. And across all of our products, the emphasis really has been on connectivity, data and readiness for AI-enabled workflows rather than just isolated features. And external recognition through the awards we won. So we won the Best Project Management Software of the Year as well as Company of the Year at the U.K. Construction Computing Awards. It's really encouraging for us. But also importantly, those awards and the software is really all being driven by our customer demand, and that's really key. So having that close relationship with customers. So with that high-level highlight, I would like to invite Neil to take over and introduce the financials.

Super. Thanks very much, Jonathan. Afternoon, everybody. Thank you very much for joining. I'm very happy to take you through the financials for financial year '25 to -- the calendar year effectively as well to the end of December. Before I sort of go in great depth on some of those, what I'd like to do is really just take you through the first kind of a position where we are in terms of our recent financial track record. This chart really talks about each half year period since 2021. And why since 2021? Because that's when we actually embarked on our financial SaaS journey to move from perpetual one-off license revenues through to the high recurring revenue model that we successfully did sort of three years later and since. And you can see -- if you look at the total revenues there in terms of the dark blue bar charts and the recurring within the lighter blue, and then there's a couple of profitability metrics at the bottom. And what you can see there is the financial track record for Eleco is one of consistent, robust and improving health and growth for the business, which I'm proud to say, and we're proud to say -- it's very, very pleased to see that moving from a recurring to 55%, as Jonathan said earlier, to the 81% that we've just reported now. So why those high recurring revenues, a quick reminder. Well, with those high retention rates as well that Jonathan mentioned, we have an underpin and the predictability of revenues for the business and indeed for our shareholder investors, very, very important to us and a resilience in our business model really that in otherwise, as we see much more increasing sort of uncertain times. So what you can see is we had a really strong second half beyond what we reported for the first half as well, and that continued to very much improve. And I'll take you through the actual main metrics around that, but very much sort of scaling up to kind of the traditional Rule of 40 type of company. On the right-hand side of this chart, there's just a few features just to quickly sort of remind ourselves on. So we are obviously -- embrace many different parts, as Jonathan said, across the whole portfolios and within those modules and suites of solutions. And that's very diversified across geographies as well, of course. Software is very scalable. It's quick to bring to market. It doesn't require huge inventory or working capital buildup to do that. We're blessed with very high gross margins, typically in the sort of 88% to 90% range. Our fixed cost base does, of course, grow with inflationary demands and so forth. But nonetheless, with other cost control and so forth, the operational gearing where we get a more than proportionate increase in profitability for a certain percentage of revenue increase has been a feature of recent years, and we continue to see that to be the case, which is fantastic. Of course, to do that, innovation is incredibly important as well as the culture and the people. And so the investment in R&D, the spend typically is about 15% to 17% of overall revenues. And we're actually very prudent in our capitalization policy as well compared to many software companies. The business is, of course, very cash generative with those margins that I've mentioned, but also typically, customers pay upfront and with 30-day terms, it's a very mission-critical in what we do. So very desired and needed by our customers. And we've certainly seen some particularly excellent generation of cash this time around that I'll take you through later as well. We do overall have cash in a net cash position, cash positive at GBP 16.3 million. Again, I'll take you through that later. But that's fantastic. We have no debt. So that cash is over 50% of balance sheet net assets as well. So very reassuring vis-a-vis other software investments that you may be interested in as well. And of course, deferred income, which represents future incomes, even -- it's up by 39% this time, stripping out the acquisition effects, 31%. So we're really, really -- bodes incredibly well for 2026. And we are also unusually even now amongst some sort of software companies dividend paying, and we have a progressive and sustainable dividend policy. And in fact, it was quite interesting in putting this together because the total dividends are actually over this sort of period have doubled for our investors. So we're very keen to do that. And of course, that does reward them staying with the business and being part of that journey for our future prospects. So if I just move on to the next slide, thank you. And so really, this sort of double clicks on the more involved metrics from financial year '25 itself, of course. And it is, as Jonathan mentioned, we were ahead of market expectations, we showed continued strong growth, record recurring revenues, enhanced underlying profitability and the cash that I just mentioned. Along the top, you have some of those revenue metrics that we sort of delved into a little bit. And the ARR normalized multiplied by 12, that's an exit measure. That's often used by many as a useful indicator of the future. That was actually up 29%. And organically, that was 21%, particularly strong performance there in December as well. So very pleased with that. Overall recurring revenues across the whole of the 12-month period, up 26%, as it says on the top middle there. And underlying organically, that was 18%. And again, that's somewhat ahead of the organic rates that we were seeing in the previous year as well. Recurring revenues being 81% of total revenues, but overall revenues increased by 20% or very similar number on that sort of constant currency basis. We did actually have a contribution from our Irish acquisition that took place in January 2025. So that included about GBP 2.7 million for the year. So organically, that was 11 lower than, say, the recurring rates because obviously, there's a service element to the business as well. The second row down really refers to profitability metrics. And you can see that there's been that effect of operational gearing that I've mentioned before. And we have looked at -- there are various other one-offs I'll take you through later. But on adjusted profit metrics, they have markedly improved, demonstrating that improved gearing. We did actually have an impairment of a former subsidiary, the one that was disposed of after the year-end, which has involved a one-off charge against some of the carrying value of its assets. But outside of that, that obviously hit some statutory measures. But outside of that, you've seen adjusted measures move up significantly. For example, they are 32% on adjusted EBITDA, the adjusted EBIT there of 35% and adjusted EPS with some tax effects of about 24%. Free cash flow, I mentioned, is very, very good. We were really pleased at being 30% ahead of last year. Cash, as I mentioned, is a very large part of the balance sheet now, which is really fantastic from a surety perspective. And that allows us to move ahead with dividends as well. Just on the cash itself, though, being 16% between the different period ends of December to December, actually, had we not undertaken the cash element of the acquisition, then it would have been 49%. So really, really strong growth there, very, very pleased with the performance of the business. And the final dividend, talked about the doubling in the last few years. We do have to measure organic versus inorganic versus needs plus that, but it's very, very important for us also to maintain that diversity and the return to our shareholders as well. So there's a final dividend proposed for 21% increase as well. And then moving on to just a little bit more of a deeper dive on the revenue. Three charts here. On the left-hand side, you see revenue by business line, and we've talked about perpetual moving down from really 4% to 1%, the recurring moving up to about 81% in the center of the diagram. And then to the right there, you see the services income. Services tends to be around 18% to 20% of overall revenues. And here, the service revenue income was higher over the previous 2024, about 8% higher. However, I will point out that that's probably just the one area of the business that remains a little bit more subject to challenge where expenditures are a little bit more discretionary and may be deferred really around that. And does include a small contribution there also from the services from Pemac. So really, in the second half, it continues to be the case following a number of initiatives that we closed the gap in services. But if you strip the Pemac out, we're not quite up to where we were in 2024, but as we anticipated and forecasted that to be, of course. In the middle of the chart, we see the overall group mix. And the outer ring, if you like, of the donut is 2025, the inner ring is 2024. And what we see is that the building life cycle part of the business is now 80% of the group. It was 74% of the group. And that really reflects -- that's been the focus and the mainstay of a lot of the business going forward in terms of the higher growth rates and so forth. CAD and visualization and for these numbers, including that business, the visualization business that was disposed after the year-end, that's actually reduced down as a proportion of the total pie, the pie obviously increasing to 15% compared to 20% in the previous year. There is some other as well, which relates to some other third-party products that are sold through the group. And on the right-hand side, you can see that we -- these are really the core markets by customer and geography. We are obviously quite a European-centric group and U.K.-centric group. We, with some other sort of businesses as well elsewhere on sort of high growth from low base perspectives, pleasingly, we saw all areas really advancing even the U.S., which is ever so slightly behind. That was just due to two substantial one-off elements in 2024 that didn't obviously weren't looking to reoccur underneath the bonnet that's still moving very nicely ahead as well. So I'll probably finish there on the actual revenue analysis and move on to the overall income statement, probably moving on from the -- obviously, the revenue elements at the top of the P&L and working our way down somewhat. And as I said before, you're seeing the benefits of underlying positive operational gearing. And gross profit itself at GBP 5.9 million ahead, we're particularly pleased with, and we saw a higher mix of recurring, which really with those higher margins associated around the software compared to, for example, services at 89.6% compared to 89.3%. So actually slightly ahead of otherwise very strong 2024 as well. In terms of the overhead, there's sort of four main breakouts there. We have amortization, depreciation, depreciation not changing very much by about 0.1 in the year. Amortization is higher, about GBP 0.5 million relating to amortization of acquired intangibles and then amortization more generally to all other intangibles, primarily, of course, R&D and so forth as we increase the investment and in the innovation activity that we undertake. And also had share-based payments, which in itself were relatively higher in 2025. 2024 was somewhat lower simply due to some staff changes, which led to some cancellation of share options as well. So a little bit different in 2024. The other selling and admin costs there, OpEx, on the face of it, somewhat ahead from GBP 21.2 million to GBP 24.6 million. However, if you isolate out the cost base of acquisitions, the underlying movement was about GBP 1.5 million or about 7% up. If I break that down a little bit further, 7% really relates to the 3% to 4% in salaries across territories that we had and then the rest, heightened levels of go-to-marketing resourcing, some of which are around sort of, yes, extra heads to some degree within that, but also more focus higher value heads selling into higher-level enterprise sales and more senior individuals as we really up our game further on those fronts as well. I mentioned there, obviously, below the OpEx, the impairment of the subsidiary, and that was really -- that's Veeuze, the visualization business, our non-core business we disposed of after the year-end. That as a business obviously involved some rather significant stagnant macroeconomic conditions, like DACH related, even though it was a global business with some specific challenges around customer sector for the business to business to consumer side that effect actually very different, very different to the business-to-business side of the remainder of Eleco. But we did take action post year-end to divest that business through a management buy-out and the carrying value was somewhat impacted and hence the write-down there. Underlying operating profit before the impairment was actually GBP 5.2 million against GBP 4.1 million, so actually 27% ahead. Probably the other couple of things to call out as unusual features was really one around the net finance expense itself. Net finance income is a little bit down, but that's not to be unexpected in a slightly lower, although in the lower interest rate environment. But the net finance expense itself has an element of discounting there relating to some contingent earn-out consideration for the Irish acquisition that we made. And you can see that balance in the balance sheet. So there is a time value of money adjustment, a discount that is taken through that line according to the accounting standards. And then the other element really to pick out in part also down to some of the sort of more inorganic moves within the business was the tax charge, which in itself would have been higher, obviously, on higher underlying tax, but was a much, much higher as an effective tax rate. And probably the two things that I would probably -- well, 2.5 things I would call out really would be around, obviously, Veeuze itself as an impairment charge itself isn't a taxable tax deductible item. Secondly, Veeuze in leaving the group after year-end meant that any deferred tax loss credits that could be taken were reversed. So that was reversed back through the tax charge there. And then finally, a less generous RDEC tax credit government scheme for U.K. R&D tax credits, which again probably impacted a little bit more significantly and will do so just to flag for the future going forward being slightly less generous than the previous smaller company scheme. Nevertheless, overall recurring is a great mainstay for the business and adjusted profitability increasing as well. So I mentioned the EBITDA and you can see the adjusted EBITDA there, 32%; adjusted profit before tax, 35%; the tax and the EPS profit after tax impacted by some of those tax elements I mentioned to be up at 24%. Moving just on to the cash. Frankly, so as I mentioned earlier, 2025 was a period of very -- well, continued, but actually even greater cash generation, and that's despite some acquisition and other related -- acquisition-related costs, for example, for the Irish acquisition. We have no borrowings, as I said earlier, those are repaid back in 2021. And what you see here on this chart is on the overall left-hand side, there's the overall balance sheet movement, which is up with some FX elements also up by about GBP 2.3 million. And on the right-hand side, the main chart really reflects some of the key movements that you see going through the group cash flow. And on that, I suppose we would say that some of the biggest movements will be obviously the acquisition payment of GBP 4.6 million for Pemac, taking in to account starting with the new business. The overall investment in the R&D of about GBP 3.5 million that compares to about GBP 3 million in the previous year. Working capital, that's GBP 3.1 million positive. That does include bringing in some elements for the acquisition as a onetime element. So for example, the deferred income of GBP 0.9 million or so and GBP 1.2 million for the earn-out consideration. But even if you were to strip those out, they would still be net-net positive on all of that. Obviously, we paid out increased dividends. That's about GBP 0.9 million. And then there's sort of other adjustments for nontax-related elements such as the impairment as well. The bottom left-hand chart is quite an interesting one because what we're seeing -- what we saw was actually the free cash flow, not only being 30% higher was actually 158% of operating profit, and that compares to 154%. So the quality of earnings coming through is even more enhanced or that another measure added for the first time here was really the free cash flow as a proportion of overall cash generated from operations in the group cash flow, and that again grew from 59% to 63%. So very, very pleased with the overall cash position indeed. So thank you very much for that. And then finally, just moving on to the overall balance sheet. Again, balance sheet detail. I think it's important to -- clearly, it's relatively robust, resilient, growing and a feature of where we are vis-a-vis other investments as well, of course. And probably most of the significant balance sheet movements here relate to either the purchase of Pemac as an acquisition or the Veeuze impairment or frankly, just overall growth in the trading and scale of the Eleco Group. So by way of example, I'll let you probably read through the lines on the right-hand side at your own leisure, back to rewarding, but for example, goodwill increasing by GBP 1.4 million. It goes up by GBP 3.2 million for Pemac, then down to GBP 1.9 million for Veeuze and the remainder is FX. But if you get into the trading balances, then the trading balances are also there. Overall, the -- probably the other features that are a little bit more different from the rest really would be around, for example, there's the contingent consideration of GBP 1.1 million or EUR 1.3 million, which reflects the time and the difference there between the two, the GBP 1.3 million, I beg your pardon, is the GBP 0.2 million that you saw in the discounting in the P&L. That's about EUR 1.5 million. And then so we've had some significant movements in -- so that's a new element, if you like, that's come in. I mentioned earlier the deferred income. The deferred income is ahead by 39% or 31% once you strip out the Pemac. So again, showing really good -- and predominantly for those who hopefully -- a good proportion of you that know us, many of our contracts are around a one-year renewing sort of cycle. So therefore, the vast majority of that deferred income coming through within the next year, within 2026 as well always and has been building for some time. Overall, and the balance in net assets by about 14% and net assets per share as well, of course. The basic levels of EPS affected by that Veeuze impairment, but outside of our adjusted levels have increased by about 24% I mentioned earlier. And that's given the Board, together with the outlook for the company, the confidence to move ahead and to propose that final dividend by a similar sort of metric of about 21% as well. And that comes on top of an increase of the interim dividend as well, so a total 20% increase for the whole year. And with that, I think that's probably me for now. I look forward to your questions later. I'll hand you back to Jonathan. Thank you.

Thank you, Neil. That's great. So for this final part of the presentation, I'd like to introduce you a little bit about the built environment and some of the things we're seeing as well as our strategy a bit on AI and also how our customers are using our software. So in terms of the built environment, we still see strong demand for companies digitalizing, adopting technology to improve their businesses and also mitigate some of the risks. In terms of the market characteristics, there is strong customer demand, whilst we may be seeing fewer buildings being built, there is demand in terms of cost pressures, the increasing need to adapt buildings and structures for different use, the complexity and sophistication of buildings and where they're built as well and the increasing requirements for sustainability and safe building practices. There's also drivers simply such as population growth, which is driving demand for infrastructure and housing and stricter regulations and of course, data management as well as dispute resolution. And there's emerging technologies within the built environment. And of course, those are relating to a lot around project management and time. There's 70% of projects globally overrun or delayed or delivered late. So therefore, time is still and project delivery is still really much an area of investment within our client base as well as, of course, cost estimating. And then data plays a big part due to the ability to use AI. It's -- customers aren't able to use it without clean data. So really exciting for companies like Eleco. We see the construction market in the U.K. recovering. It's unevenly recovering. It's probably a good way to describe it. We've seen infrastructure, utilities, public estates driving activity while private housing remains sensitive to interest rates and inflation. But the common theme across construction as well as manufacturing and industrials where we also provide software into, there's an accelerating demand for software that improves productivity and predictability, which is really exciting for Eleco. The geopolitical uncertainty may affect timing with uncertainty around supply chains and energy prices and so forth. But we still see high software adoption rates during the uncertain periods or low construction output periods. We see an impact in one-off discretionary services and training, but the subscriptions remain resilient for us. Our strategy is to build on the established market positions that we have. We've got an excellent customer base, over 8,000 businesses supported and really a proof point that we're adding value to those customers with very high retention rates. I'd say to achieve that, we have three key pillars to our strategy, the center being innovation and technology. We're very much a technology group of people that are engineers, very good at solving problems and quite passionate about the industry. So we continue to evolve and enhance our software with client -- alongside clients and alongside their demand as well. And that's proven to work really well for us, but also its allowed our products to be sticky as well and really valued by customers. And more of -- customers also like the fact that they can join a steering group meeting and influence what goes into our next release or in future releases. So we very much involved customers through that journey. And to the left, the go-to-market pillar is, of course, extremely important. You can have the best technology, but if no one is using it, it doesn't really count. So we've really, I think, invested quite a lot of time and effort into our go-to-market in 2025, as we said we would, and we saw that journey of revenue start to increase in H1, H2 rather throughout the year. Really, I mentioned the ARE strategy, so breaking down how we market and sell to attain new customers, retain existing and expand. So we spent a bit of time on building out customer success teams, value proposition playbooks and also modules and new features that we can upsell to be able to expand the share of wallet within the customer base. Partnerships is also playing a key part, which interfaces with our M&A strategy, which I'll come on to in a minute. But really, when we're looking at new technologies in the market or looking to develop new software, we're also looking at potential partnerships as well, which could accelerate our road map rather than having to rewrite what's already out there. And premium support and also diversifying into our customer base. So historically, we would sell into a department or an individual within a business, and we've been strategically expanding that relationship to sell more enterprise-led solutions and reach a different type of audience within the customer base. So that's progressing well. And then on the right side, the mergers and acquisitions pillar, we've been executing with some acquisitions and a divestment in the period. We're really looking for three types of business, has to be profitable in complementary markets, primarily Europe and the U.S. and proven technologies that advance our road map. And when we're looking at opportunities for acquisition, we are also really testing our product road map as well and how long or how much it would take to develop those features versus acquiring. And then the third type is next-generation technology, which could be from a different industry or sector that may be of interest that we can introduce into our audience. Ultimately, it needs to enhance value, needs to be the right strategic and cultural fit. So there's many factors that go into our assessment of acquisition targets. And across the bottom finally is what we describe as our growth platform, and it's essentially just ensuring that the business is operating in a very well-governed profitable way with good systems, obviously, hiring very talented people. We've emphasized that more since AI has been adopted. Having that expertise and industry understanding in the business is really important, and that's been part of our hiring as well as strong culture and values because the engagement of people drives productivity. So in terms of AI, our strategy for AI is aimed at augmenting expertise, not replacing it. There's a shortage of expertise in the construction and industrial sectors. And we really see that those individuals that we're serving are key to making decisions and also for taking ownership of risk and project delivery. So we still believe that there is a need for humans in the loop, but not just humans, experts in the loop. And the AI really serves as a quicker accurate ability to observe data, surface risks, generate options and recommendations for humans to ultimately take action. And we've heard it from some of the investors on our roadshow that they definitely don't want AI building their buildings. And I think it is important to ensure that we keep people in the loop and not just at the end of the loop, if that makes sense. We use -- we've adopted AI in three different ways. So internally, within our software development, we've actually seen a slight reduction of 7% to 8% in R&D through the year. We've also seen a trend to bringing on more senior level developers as well. So fewer junior developers, so higher quality, again, reflecting the need for expertise. And we've proven to be able to upgrade the code stack. We've been able to leverage existing developers to write code in a different language, whereas historically, we'd have to hire someone that was an expert in the different language. And we've built rapid prototypes, so really exciting, interesting prototypes that we can share with customers and get their view on before going into production. So that's been excellent, really sped up productivity there. In terms of AI embedded into our products, we've been using some of the models that are available for enhancing the adoption of the software. Also, we've built our unique sort of business intelligence that we've developed in our software. We've built that out to be accessible via secure APIs. And that allows these AI models to interrogate and actually run the software through the AI model. So truly sort of being part of that agentic workflow, which is really exciting as well. And then on the third pillar, sales and services, but also consulting, AI-driven productivity and the ability to scale within those departments. So really fantastic for our business. We see AI as an opportunity. I think in terms of a defense, and against competition, we see AI as being quite a compelling moat for Eleco. Our software, the sort of themes we have across our suite is that the products are very feature-rich. They're used by experts to create data and also manage data through the unique business logic that's built into the software. So that's been -- as a result, the software is very difficult to switch and take out of the customer, making it very sticky. And we've seen that in very good retention rates on an ongoing basis. And then the business logic that we've developed by providing that to customers through secure API, it's opened up the opportunity to partner with other solutions and then also interrogate with AI. So that's really defeats the desire of competitors trying to replicate it. Things like the market validation and the sort of customer footprint that we have and the testimonials make it really compelling as well. So AI really is -- it provides scalability and resistance for us, strengthens our products, protects our installed base and also reinforces our position within the markets that are complex, regulated and human-led. So finally, I have a couple of case studies to share. W.C. Rowe is the first one, a Cornish baker. They've been in business for 40 years, long established, but they had a legacy maintenance database, which is like a spreadsheet of how they manage their maintenance. They took the bold step last year to start completely fresh. They installed ShireSystem, CMMS software, computerized maintenance management. They built a new asset register, maintenance workflow, et cetera, from the ground up. And that resulted in a reduction in downtime to 2.6%. 90% of assets are now inspected every month. And everything -- all their records are digital and audits run very, very smoothly as a result. Their planned maintenance workflow that they've now implemented has improved their production output. But the next stage on that sort of technology adoption maturity journey that we're taking customers through is to move towards predictive maintenance. So by identifying the trends of their maintenance patterns, we can use that to inform forward-looking interventions and be more predictive. The -- next example is actually a partnership example where we've partnered with a company called Acumine. Acumine provides building intelligence, specialist insights for projects, construction projects. And we've built a partnership and an interface with Asta, in fact, Asta Vision Plus. Asta is our scheduling software. So it's core to a project, any project, what is planned, what is delivered on site. Asta Vision Plus is our platform for scheduling with API integration. So with that partnership and the API, Acumine can now draw on Asta data in real time. So this is project information across a portfolio of projects. And they're reporting that to senior level management highlighting potentials for delays before they actually occur. So traditionally, a report will go to senior management when a delay has happened and then intervention can't be taken to mitigate against that when the delay has already been reported. So this is really trying to prevent and take actions before a delay happens. Acumine, the week before last, announced that a three-year deal with Robertson Group, which is the largest U.K. family-owned construction business, which is also an Asta customer. So we see this type of partnership providing reach within the organization. Our products are working in the planning department, they're giving us further reach into C-suite. And also, it encourages customers, really gives them a good reason to standardize on software as well across all of their projects so they get that visibility across their portfolio. So I think that concludes the presentation. Perhaps I'll hand back to Jack to open us up for Q&A.

Perfect. Thank you both for your presentation this afternoon. [Operator Instructions] For your reference, a recording of today's presentation will be made available on the Investor Meet Company platform shortly after the meeting has ended. But for now, guys, as you can see, there are a number of questions which have been submitted. Jonathan, can I please ask you to read out the questions and give your responses where appropriate to do so, and I'll pick up from you at the end.

Yes. Thank you, Jack, and thanks, everyone, for your questions. There was one that was pre-submitted. So I'm going to read that one first and then move on to the others. So the question is, are you seeing any effect from the supposed threat of AI disintermediation of enterprise software, for example, client feedback to that end or elongating contract deliberations as clients weighing up their options. So it's a good question. And of course, we see workflows being improved through AI. I think as presented, our products are very much mission-critical and the business logic that we've built that supports that, that function makes them very difficult to replicate, and we've tried. It's really years and years of R&D that's gone into that. So with AI, it could improve interface or it could improve the way forms work or the surface level capability, but the real sort of intelligence and business logic is very difficult to replace with AI. It's really -- I think it's driven more adoption of enterprise solutions. So we're seeing a positive benefit to the desire to use AI. I think our clients aren't explicitly asking for AI, but they're wanting to be able to leverage it through their data. Neil, was there anything I missed that you think on that, or should you want to add something?

No, I think the only thing I'd add is, yes, when we -- I suppose when we've been on the M&A trail, we've seen businesses that cosmetically might look good, but they don't get down to that from that surface level as we say, Jonathan, to the underlying business logic. So it's very much the case around that deep sector expertise and the sort of defensive moat and the reputation and the track record and the relationships we have with our customers.

The next question is from John M. Thanks for the presentation and congratulations on the great results. A quick question. This is a great performance in the built environment that I think is quite weak. Is that your view, it's weak? And if so, would you get a tailwind as it improves? Or is it quite strong and stable for your customers? Another good question. The -- yes, construction output is weak. When you measure productivity even over the last decade, productivity on construction, it's flat. So we're not seeing improvements in productivity. Therefore, margins continually being squeezed and risks obviously heighten as well. So our customers are very brave. They think they have challenges, but they're turning to software to really to mitigate that risk to get better visibility to measure what good performance looks like and implement that across portfolios and obviously manage and monitor costs as well. So we -- I think we're seeing -- we continue to see an adoption of technology, and that's why despite a weak market, Eleco is performing well. When the market recovers, I think we'll still see similar growth, it's during these times where I guess, companies are looking to reduce waste. When they scale up, they have to resource up, so they have to move quickly. And yes, we could see some link to that. But historically, when we measure construction output versus our sales or revenue, the only area of real impact is in service line. And apart from that, we still see software sales continuing at a steady pace. So thank you for that question. The next one is from Andrew F. Neil, I'm going to let you answer this one. The question is, what was the Veeuze trading loss in 2025?