Aconex UK returns first profit

aconexAconex (UK) Ltd, the London-based arm of Melbourne, Australia-based international SaaS construction collaboration technology vendor Aconex delivered its first UK profits in the year to 30 June 2012, according to accounts recently lodged at the UK’s Companies House. A 2011 pre-tax loss of £187, 796 was turned into a pre-tax profit of £133,491 in 2012.

UK collaboration vendors - profit/loss

However, the profit was achieved during a year in which turnover slipped 30% from £2,247,499 in the year to 30 June 2011, to £1,562,610 a year later. The report initially gives little explanation other than to point out that it had had to close down its branch in Libya (reported previously in its 2011 report), with all staff either repatriated or made redundant (though non-UK sales amounted to just 2% of revenues in 2012, compared to 6% in 2011).

 UK vendor revenues

UK cost of sales shrank from roughly £135,000 to around £59,000, and administration expenses were cut from £2.38m to £1.44m, but the new-found profitability appears also to be about accounting measures. A note to the accounts shows the operating profit/loss was calculated after various adjustments that differed in their impact in each year’s accounts – for example, in 2011, Aconex (UK) Ltd incurred a foreign exchange loss of nearly £188,000 (against £7,000 in 2012), while in 2012 it had a management fee credit of £209,313, compared to a 2011 management fee charge of £310,911 in 2011.

My view

I underline that I am no accountant, but the turnover dip – on the back of the then continuing recession in the UK construction market – while disappointing, seems realistic (and is consistent with CEO Leigh Jasper’s November 2012 view that the UK and mainland Europe remained “tough”), though other UK-based vendors have been very bullish about the market of late (in May, 4Projects, for example, was talking about double digit growth, while Conject was claiming significant new gross order intake).

The new-found profitability seems less likely, but could be due to how various overheads are accounted for, along with the unravelling of adjustments in previous years.

To me, the graphs tell their own story: Aconex UK appears to be losing ground on rival UK operations on turnover (though we are, of course not comparing like with like: 4Projects’ and London-based Asite’s numbers cover all their international operations, for instance), but – by whatever means – Aconex’s underlying UK direction of travel on profit/loss appears – for now – positive.

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