Eleco is a specialist software provider serving the global construction and built-environment industries. Through brands including Elecosoft, BestOutcome and Pemac, the company provides project management, planning, maintenance and asset-management software to architects, engineers, contractors and infrastructure operators. Its flagship product, Asta Powerproject, occupies a well-established niche within construction project planning, where deep industry expertise and long-standing customer relationships create meaningful barriers to entry.The business generates revenue from software subscriptions, licences and related services, with an increasing emphasis on recurring SaaS income. The transition is progressing well. In 2025, revenue rose 20% to £38.8 million, while annualised recurring revenue increased 29% to £34.3 million. Recurring revenue now represents 81% of group turnover, improving earnings visibility and helping drive a 32% increase in adjusted EBITDA to £10.2 million.Subscribe nowManagement has continued to sharpen the group’s strategic focus. During 2026, Eleco completed the disposal of its non-core German visualisation business, allowing greater concentration on higher-growth software platforms. At the same time, it has continued to expand through acquisition, building on the purchase of Pemac with the acquisition of Kivue, a complementary cloud-based project portfolio management business. The group’s acquisition strategy remains targeted and disciplined, focusing on specialist software assets that can be integrated into the wider platform.Financially, Eleco is in an enviable position. The company ended 2025 with net cash of £16.3 million and no debt, providing ample flexibility for acquisitions, product development and shareholder returns. The strength of the balance sheet supported a 20% increase in the annual dividend, while trading during the opening months of 2026 remained in line with expectations. Management is also investing in new AI-enabled functionality designed to automate planning and workflow processes for customers.The principal risk is not the quality of the business but the markets it serves. Construction remains cyclical and can be slow to adopt new technologies, particularly during periods of economic weakness. Eleco must also compete against significantly larger software vendors with greater resources. However, its niche positioning, specialised products and sticky customer relationships provide a degree of protection that many smaller software companies lack.From an investment perspective, Eleco is an attractive business. It combines recurring revenue, high customer retention, strong cash generation and a debt-free balance sheet with a management team that has demonstrated discipline in both acquisitions and capital allocation. The key question is whether the addressable market is large enough to support truly exceptional long-term growth. If management increasingly embraces a buy-and-build strategy, acquiring and integrating niche software providers across the built environment, the opportunity could become considerably more interesting. As things stand, Eleco looks less like a future software giant and more like a high-quality niche compounder, probably the sort of business that deserves a place on an investor’s watchlist and one earmarked for further work with a low priority.Enjoyed this company summary? Discover more promising businesses in our growing collection of 500-word insights. Check out all company summaries here.Support My Work