Asite – steady

Asite’s latest trading announcement talks growth but the recession is hitting SaaS vendors’ project-based collaboration revenues.

Amid the flurry of discussion about BIW’s acquisition by Conject (post) and the NEC3 announcement regarding 4Projects and BIW (post), I almost overlooked a news release from rival UK SaaS construction collaboration vendor Asite concerning its trading performance for the year to 30 June 2010.

The London-based company says its revenues increased to £2.021m (2009: £1.891m), almost 7% growth, and with operating costs cut by a further 15% to £1.888m (2009: £2.215m), operating profit for the period rose to £0.133m from an overall loss of £0.158m. Asite also said:

“Notwithstanding the troubled economic backdrop, we have continued to win significant new business with key clients in our target markets. Our strategy to focus on enterprise deals continues to deliver success. With the release of our latest platform version, which includes some major innovative breakthroughs we have seen our pipeline increase dramatically both domestically, but more importantly, internationally….”

Analysis

As a former AIM-listed company, Asite has reported its financial performance regularly, allowing the market to track its nine-year climb to eventual profitability. In June (post), I noted Asite’s revenue growth over the 18 months to 30 June 2009 and a dramatic reduction in losses, and Asite finally achieved profitability at the end of 2010 (see Asite reaches profitability). But if you compare these latest figures with the numbers released last January, they suggest that Asite’s performance may have slipped slightly over the subsequent six months (a 3% drop in revenues, and profitability lower too).

Vendors are talking privately about the UK collaboration market being very competitive on price (it sounds like suicide bidding is happening in the construction technology space as well as in the contracting market), and Asite’s latest results might be an indication that the continued recession in the UK construction market is having a knock-on effect on SaaS vendors’ revenues. Unsurprisingly, and like its afore-mentioned competitors, Asite is looking to expand its international revenues – the company recently announced a distribution deal with ReproMAX in north America (post).

Update (21 December: 1.30pm) – I spoke to Asite CEO Tony Ryan this morning about the numbers. He says Asite is enjoying strong growth: “We are winning work because clients see how Asite can help them cut costs in difficult market conditions”.

And the growth in Asite’s revenues isn’t only coming from its collaboration offering. Asite also delivers e-procurement solutions, and Tony said revenues from this area had grown from 3% of total Asite revenues to 20% over the past 18 months. He also expected this growth to continue, particularly in north America where he felt Asite’s ability to manage the costs of a dispersed network of reprographic businesses would give it a marketing edge.