On January 30 this year, shares in construction software company Aconex took a fearful hammering, almost halving in a day as the once high flier was whacked by investors upset at a sharp and unexpected downgrade in 2016-17 earnings.
Aconex shares closed at $3.10 On January 30 after opening at $5.65, a fall of 45%. The company listed at $1.80 a share in December 2014.
The reason was Aconex’s announcement that its earnings before interest, tax, depreciation and amortisation (EBITDA) would grow by 10% to 32% for 2016-17 to $15 million to $18 million, down sharply from previous guidance of EBIDTA in the $22 million to $25 million range.
Yesterday the shares took another whacking – losing 10% after telling the market that it expected its sluggish performance to continue on into 2017-18. Aconex said it has invested heavily for future growth and assured investors that margins in its offshore markets will improve as they start to grow and mature.
The shares ended at $4.414 and clearly investors failed to heed the warnings from late January in the way the shares drifted higher after that hiding.
"In the coming year, we will continue to extend our leadership position through further investment in our international markets and ongoing product development. We expect to grow revenue by 15 to 19 per cent, while increasing EBITDA and generating positive cash,” CEO Leigh Jasper said yesterday.
For the 2018 financial year Aconex is predicting revenue growth to be below its long-term forecast of 20 per cent, but its confident this will return to 20 per cent in the medium term.
The company reported revenue of $161.2 million in the 206-17 June 30, up 31% on year, in line with the bottom end of its revised guidance. Earnings before interest, tax, depreciation and amortisation from core operations also came in at the low end of guidance at $15 million, up 10% on the previous financial year.
Aconex recorded a $10 million statutory loss, thanks largely to the integration costs of a takeover in 2016-17 and amortisation of acquired intangibles. From core operations, the company claimed a net profit of $5 million, down 41.2% on the previous year.
The company now claims to have 5.3 million project users managing 2.4 billion documents.
Its biggest market is still pointed to the Australia and New Zealand where it claims it had a 39% lift in earnings before interest, tax, depreciation and amortisation margin on more than $53 million in revenue.
International revenue made up 68% of the company’s total revenue, but Aconex’s major growth regions of the Americas and Asia are operating at a loss, with the business saying it is opting to invest heavily in sales and marketing to drive future growth.
