Aconex UK growth makes Conject deal look timely

Latest results from Aconex (UK) Ltd suggest the March 2016  Conject acquisition was timely, with the Australian giant’s European operation lagging behind regional rivals.

Aconex logo 2014I have monitored the performance of Aconex’s UK-based operation, Aconex (UK) Ltd for some years (since at least 2007). The Melbourne, Australia-based parent company has made great strides to become the dominant SaaS ‘pure-play’ vendor in the global construction collaboration market, but in the UK – arguably, the most mature, sophisticated and competitive market for AEC SaaS collaboration – it has historically lagged behind indigenous competitors such as 4Projects, BIW (now Viewpoint and Conject UK respectively) and Asite. Aconex has also fared less well than rivals in the mainland Europe market.

But direct comparisons are also difficult. Despite its name, Aconex (UK) Ltd has not derived most of its revenues from the UK, but from operations in mainland Europe and neighbouring regions such as north Africa (it has an Algerian subsidiary, for example).

uk vendor revenues 01Jun2016Revenues for the year to 30 June 2015 were up 9% from £2.74m to just over £3m, but 2014’s pre-tax profit of £0.357m turned into a small loss (around £18k). While 72% of 2014 sales were from non-UK projects, the figure for the year to June 2015 was 63%.

Aconex’s single-digit European performance therefore lags behind those of its rivals. Over the same reporting period, Asite (post) grew revenues by 12%, while Conject UK earlier grew 13% (post), Viewpoint UK-only revenues were up 14% (post) and Munich, Germany-based think project! reported in February (post) March that its 2015 revenues grew 33%.

Of course, Aconex’s European performance will change dramatically following its acquisition of Conject in March this year. The Conject deal was partially justified on the basis that it would significantly increase Aconex’s market penetration and user network throughout Europe. These latest results suggest such a strategic move was necessary to accelerate the relatively slow organic growth achieved by its existing operation.

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