AEC SaaS technology vendor Asite grew its revenues 20% in the year to 30 June 2019. Could the London-based business be an acquisition target?
In the year to 30 June 2019, London-based construction Software-as-a-Service vendor Asite grew its revenues by 20.4%, from just over £8m in 2018 (post) to £9.638m (c. US$12.6m or €11.43m. According to the company’s 2019 annual report, operational profit for the same period was up 83% to £2.484m (c. US$3.25m or €2.95m), and it says it has strengthened its global footprint over the 12 months.
Nathan Doughty, who succeeded the late Tony Ryan as group CEO of Asite earlier this month, said:
“Asite’s vision is to connect people and help the world build better.
The Asite platform continues to push the boundaries of research and innovation in the field of digital engineering on behalf of our customers. This positions us well to deliver on our strategic plan to become the global leader in digital engineering by integrating supply chains for capital projects and infrastructure developments worldwide.
Our offices across the globe now give us the geographical coverage to fully support our customers worldwide and through investment in our sales and marketing teams within these offices, to achieve our ambitious revenue growth goals.”
Full-year revenue split by region was:
- UK – £7,070,653 (73%)
- Europe – £483,462 (5%)
- APAC – £1,106,580 (11%)
- North America – £797,389 (8%)
- India – £180,224 (2%) – down from £234,264
So, within its “global footprint”, the mature UK market, up 15%, still contributes almost three quarters of Asite’s revenues. (The UK construction market has struggled through Brexit uncertainty for the past three years, and the Construction Products Association forecasts little improvement; last week The Construction Index reported there is “little evidence … that the general election result will … benefit the construction industry in 2020. Those hoping for a Boris bounce are deluded…”.) Meanwhile, overseas, APAC saw Asite’s sharpest growth, up just over 60%, while revenues were up 38% in North America – albeit, in both cases, from relatively low bases and against strong local competitors.
For the second year running, headcount fell, from 213 to 200, again mainly due to reductions in Asite’s largely India-based technical team, now 166 strong (183 in 2018). Asite now has 20% fewer staff than at its 2017 peak of 242. Another change was the post of chairman: Asite’s main shareholder Robert Tchenguiz was appointed to the post on 1 February 2019, succeeding Walter Goldsmith. Another director, Timothy Smalley, resigned in April 2019, and so, following Ryan’s death, the company currently has just three board directors, down from the five it had at the start of the financial year. This should bring overall director remuneration down (it was £673,750 in the year to June 2019), lowering overheads and boosting profits in the current financial year.
Following some rationalisation in the AEC SaaS collaboration sector over the past three years or so (Oracle acquiring Aconex, Trimble acquiring Viewpoint and eBuilder, Autodesk acquiring Plangrid, etc), Asite remains one of the few independent UK-based vendors, and it has been consistently growing revenues and delivering profits in recent years, while also investing in its BIM capabilities (talking about a “BIM escalator” last week). If it can weather the ongoing UK uncertainty and continue to grow its international revenues, then Asite will become an increasingly attractive target for potential investors.
Update (30 January 2020) – Asite has announced two internal promotions: the appointment of Devendra Gera as chief technology officer and Tony Pickworth as chief financial officer.
Update (14 February 2020) – Asite business development and growth plans will be driven by four distinct operating regions: UK / Europe (led by SVP Rob Clifton), APAC (led by SVP Atit Patel), North America (led by SVP Chris Peters), and India / MENA (led by Executive Vice President, Ritesh Narain). These regions will be supported by a robust and mature shared services model from the Asite Group. [News release]