Latest results, for the 12 months up to 31 March 2009, show that UK-based construction collaboration technology vendor 4Projects enjoyed its most successful year to date. According to the latest returns submitted to Companies House, revenues grew 24% to £5.502m (up from £4.420m in 2008 – see 4projects turnover up a third), while pre-tax profits leapt to £1.801m (from £1.142m last year).
In previous years, the underlying profit figure has been higher, but substantial management charges were paid to a sister company (4Projects Management Ltd) – last year the fee was £720,000, making the real profit figure about £1.9m. Following the management buy-out in 2007 and the severing of the relationship with the Leighton group, 4Projects Management ceased trading at the last year end so no such fees were paid this year.
A dividend of £1.3m was paid to the immediate parent company 4Projects Holdings Ltd. I expect this in turn was paid as a dividend to its parent company Riverside Acquisitions Ltd (in 2008, the latter received £489k from 4Projects Holdings).
Staff numbers were up from 44 in 2008 to 63 in March this year (23 technical staff and 40 in sales, marketing and account management). Amid early summer industry rumours of vendor redundancies, it will be interesting to see if 4Projects was one of those affected.
Revisiting the MBO
Having downloaded various company reports from Companies House, it seems that the July 2007 4Projects MBO – the value of which was previously “undisclosed” – was worth over £21m. The report from Riverside Acquisitions says it acquired “100% of the issued ordinary share capital of 4Projects Holdings Ltd on 27 July 2007 for a consideration of £21,576,868“.
I speculated at the time (Valuing a SaaS business) about the possible valuation that might have been placed on 4Projects as a software-as-a-service business. I hazarded a guess that the figure could be well over £10m, possibly even double that – so I wasn’t far wrong. Based on its its revenues to 31 March 2007 (£3.218m), the MBO effectively valued 4Projects at around 6.7 times its 2007 revenues.
The Riverside Acquisitions report also gives some detail of the company’s creditors. Approximately £9.6m of debt is funded by bank loans (“repayable in instalments up to 27 July 2015 and carry interest at LIBOR plus various margins payable quarterly”). A further £10.7m of debt is covered by loan notes, of which £7.9m is held by by private equity firm August Equity; 4Projects MD Richard Vertigan, finance director Steve Nelson, commercial director Bernard Callaghan, and marketing director Duncan Mactear collectively hold around £3.4m of the remaining loan notes.
Riverside Acquisitions reported £1.39m of net payable interest in 2008; its £694k of “creditors – amounts falling due within one year” includes almost £447k in bank loan repayments.
4Projects’ 2009 annual report and accounts show the company incurred some exceptional charges (£121k) relating to the establishment of a new retail-focused venture, 4Retail, incorporated as a new legal entity in April 2009. Working with various partners, 4Projects has created 4Retail Limited to offer a portfolio of retail-oriented technology solutions, obviously including its own collaboration platform, plus services and solutions from PMC, RetailPragmatist, theRetailEngineers and others. Recent client wins include Argos and Mothercare.
(As a web 2.0 enthusiast, I was pleased to see that 4Retail’s good-looking new website also features a blog, Blog4Retail, started in July.)
Another division of 4Projects, 4Exergy (“Extranets for Energy”), also has its own website, and focuses on the natural resources market (renewables, oil and gas, power and utilities). Last year 4Projects announced it was opening offices in north America to serve this market (post); it has just announced that it is planning expansion in south America (see NEbusiness article) too.
The design of the 4Exergy and 4Retail websites is similar, and differs from that of the main corporate 4Projects site. Perhaps the new look and feel will be extended to the 4Projects site in due course?