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Jun 20 2008

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Asite finally returns to growth

UK construction collaboration technology vendor Asite has published its end-of-year results for the financial year ending 31 December 2007 (see London Stock Exchange notice). Building on the promising first half of the year (see Asite stops the rot), the company has finally reversed the declining revenues experienced for the previous three years, generating a turnover of £1.658m, up from £1.321m in 2006 (but still just short of the £1.697m it achieved in 2003) – indicating growth of 26%. Its pre-tax loss of £0.566m was also an improvement on 2006’s £0.823m loss.

Based on the half-year results, I had forecast slightly better headline figures. Even if slightly down on my expectations, progress has clearly been made, but profitability still seems, on current trends, to be at least a couple of years away, and the business remains reliant upon a £2.8m loan from its major shareholder, Robert Tchenguiz, that will not need to be repaid before the end of 2009.

Overseas activities accounted for almost a fifth of Asite’s 2007 revenues, increasing to £0.305m (2006: £0.038m); as I noted when Asite reported its interim results, much of the company’s growth can be attributed to its activities in the fast-growing AEC market in the Middle East. The Asite order book at the year end stood at £5.33m, of which £1.143m will be taken to revenue in the year ending 31 December 2008. This pipeline figure is down slightly on the figure reported for 2006 of £5.811m.

Asite says it has won clients beyond its existing client base with wins “across the contracting, developer, project management and public sectors”. It reports sales to Welsh Health Estates (reported as a new client won in 2006), Aldar, Taylor Wimpey and the Department of Transport. Incidentally, Asite reported its 2007 win of Aldar’s Al Raha beach project in last year’s results, but Aldar and aspects of the Al Raha project have since been claimed by rival Aconex.

Analysis

At least Asite’s recent revenue growth compares well with those achieved by other UK businesses. 4projects reported an impressive 40% growth in its revenues up to April last year (see 4projects boosts profits) as it headed for its MBO; Business Collaborator grew 20% in 2007; and I expect [my employer] BIW Technologies to report comparable figures after its forthcoming AGM. Asite’s latest turnover figure also puts it ahead again of Styles & Wood‘s StoreData division, which briefly surged ahead of Asite in 2006, but stagnated last year. However, these competitors are all now generating profits, unlike Asite.

The number of users accessing and uploading documents to Asite’s system continues to grow “strongly”. Its user base has grown to “over 34,000”, up 36%, while the number of organisations increased to 4,264 from 3,457 (2006), an increase of 23%. The 34,000 users translated into 891,000 total system logins during the year. The Asite system now hosts 2.7 million documents. As previously noted, these figures place Asite some distance behind some of its principal UK competitors, and the gap continues to grow; for example, during 2007 Asite added around 10,000 users – a figure eclipsed by BIW, who added 22,820 new users and 2,181 organisations to its user base, which today stands at over 106,000.

Industry metric opportunity

Both BIW and Asite are open about their user statistics and I wish other vendors were the same (some are reluctant to share their figures lest they look puny by comparison, I think). I believe it would be useful to aggregate statistics across all the main vendors to get an idea of the take-up of the technologies in the UK market (it might be the start of a useful key performance indicator, KPI, for the industry), and I think the figures would be a powerful marketing tool for the vendors’ organisation, the NCCTP, if they could agree to their compilation – a role here, I think, for its secretariat at Constructing Excellence.

Permanent link to this article: http://extranetevolution.com/2008/06/asite-finally-returns-to-growth/

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