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Apr 23 2008

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BuildOnline France: making heavy losses

I am indebted to occasional correspondent Emmanual Netter (see Une étude intéressante… (deux)) for providing me with some figures on the financial performance of the French arm of construction collaboration technology provider BuildOnline (part of CTSpace since December 2006) for the years 2003 to 2007 inclusive – based on information from the French equivalent of the UK’s Companies House (see http://www.societe.com/societe/buildonline-france-429982945r.html). The figures confirm that BO’s French operation was making substantial losses for most of its existence.

Turnover in 2002 was just €33,000, rising to €319,000 in 2003, €397,000 in 2004 and €398,000 in 2005. It finally topped a million in 2006 reaching €1.26m, before falling back last year to €960,000 (at today’s exchange rate, approximately £760k).

Each year, pre-tax losses topped €200,000, growing in recent years: in 2005, losses amounted to €445,755; in 2006, losses reached €721,350, and in 2007 (after the merger with Citadon), the loss exceeded €1.125m (around £0.9m).

Related post: BuildOnline revisited (4 March 2008); BuildOnline investors nurse losses (12 June 2007)

Update (25 April 2008): Review the comments (from a BO/CTSpace supporter, Emmanuel Netter and myself).

Permanent link to this article: http://extranetevolution.com/2008/04/buildonline-fra/

4 comments

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  1. Martha Arlevid

    I understand (and have come to expect) a one sided (ie, pro-BIW) spin from this blog. Although this does not benefit the users and buyers of collaboration services, it is a fact of competitive live and I understand it is reality. However, misleading your audience needs to be countered when done so grossly as in this latest entry re: BuildOnline France.
    First, it might be useful for you to point out to your audience that Netter works for Prosys, a competitor of BuildOnline in France, who has consistently lost ground to BuildOnline for the past three years. Back in 2003-05, Prosys used to have a mini-monopoly amongst public projects (especially hospital and tramway projects). Today, BuildOnline wins 75-80% of these, and it has done so organically, to Prosys’ amazement. After all, I guess it must be common knowledge in the market that Prosys put itself up for sale to any interested competitor worldwide a few years ago and was met with complete rejection. No wonder this Prosys executive is trying every way he can to mislead buyers out there about BuildOnline.
    Second, and definitely related to this conflict-of-interest biased financial reporting, you (and be default Netter) fail to point out that while Prosys recognizes a majority of revenues (regardless of the term of a project) almost immediately at the time of sale, BuildOnline uses the ultra conservative policy of spreading revenues 100% evenly across the whole term of the project (no matter how many years that might be). Comparing companies with different revenue recognition policies is absolutely wrong, and trying to paint a black mark on a company which is one of the only ones in the market to have a true SaaS revenue recognition policy only reinforces the concern and worry that buyers reading this should have about adopting services from companies whose financial position is far worse than their accounting policies show.
    Thanks as always for letting me voice my opinion. I wonder how Mr. Netter next twist the truth about Prosys or its competitors.

  2. Emmanuel Netter

    Hello Martha.
    First, I’ve made no mystery (neither Paul in his posts) that I’m working at Prosys. Second, you’ll be pleased to know that Prosys recognizes revenues exactly as Build Online does, and we do spread revenues along projects time lines. Third, and that maybe of greater interest to Paul’s readers, are these public figures correct ? If not, I’m sure Paul would be glad to post them on Extranet Evolution,and you’ll rush to have them corrected on http://www.societe.com

  3. Emmanuel Netter

    Post-scriptum
    As outlined in Paul’s post, http://www.extranetevolution.com/extranet_evolution/2007/06/une_tude_intres_1.html, there’s always been a strong competition on the french market, even in the dark ages back 20 years ago ; I believe competition is good for customers and vital for vendors.
    With revenue between 4 and 4.5 M€ for the past few years – see http://www.societe.com/societe/prosys-344894985r.html – (and about 75% in the SaaS business) on a market weighing around 10 M€, one can hardly describe Prosys position as a “monopoly”. Iosis, for instance is just behind us with around 3 M€ last year.
    As for myself, I’m currently part of the Sales team, focusing on Engineering companies, unfortunately not in a managing position :-(.

  4. Paul Wilkinson

    Thanks for your comments, Martha.
    1. I try to remain quite neutral about vendors on this blog. I don’t use it to promote BIW as such (but will mention significant developments where relevant – just as I do for other vendors), and I make no secret of my BIW role.
    2. Your view that I have “grossly” misled my readers is totally wrong. If you follow the link to the previous post, it is clear that Emmanual works for Prosys (as he also adds in his own comment).
    3. While clarifying exactly who people work for, perhaps you would be good enough to explain your role? It is clear from this and previous comments that you are aligned with BuildOnline/CTSpace – please be as open as Emmanuel and myself about your position.
    4. In your comment, you refer to BuildOnline rather than CTSpace. Presumably this was an error and the French business is today known as CTSpace?
    5. Recognising revenues only when they are invoiced is a policy that is certainly not confined to BuildOnline. BIW and, I believe, 4Projects also adopt this conservative accounting policy in the UK, and Emmanuel says Prosys also follows this policy.

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