BIW – Battered in Woking

I see (thanks to a post by Nathan Doughty – to which I will respond in a separate post) that the latest annual reports and accounts have been filed at Companies House by Woking, Surrey-based BIW Technologies Ltd [my former employer*] and its newly-formed parent company, BIW Technologies Group Ltd. Both underline what I have been forecasting for some months: the global financial crisis has had a big impact on some construction collaboration software-as-a-service (SaaS) technology businesses.

On behalf of BIW, I issued a news release in late 2008 saying this UK SaaS company had achieved record turnover of £7.3m and a profit of around £1.1m (see BIW grows 27% to September 2008). While the latter figure is restated in the filed accounts as £0.928m, the plunge in construction activity, particularly in the Middle East, had a drastic impact up to 30 September 2009 on both BIW’s turnover and its profitability. After years of steady growth, the company recorded its first drop in turnover, which dropped 19% to £5.934m.


Two years of profitability were replaced by an operating loss of £0.73m (though this includes “one-off exceptional reorganisation costs of £618k relating to redundancies, compromise agreements, office relocation and bad debt write-offs”), resulting in a profitability plunge reminiscent of the reverses suffered by rivals in 2003-04:


BIW’s business review says:

“In line with world markets, the Company found trading conditions over the last years challenging. As a direct result of the economic downturn and the subsequent withdrawal of funding, a number of large development projects stalled, or in some cases were cancelled, resulting in a 19% reduction in the company’s revenues….” (p.2)

BIW says its operating losses were mainly sustained during the first six months of the financial year, with continuous monthly profitability returning from April 2009 onwards (excluding a loss in September 2009 arising from expenses relating to its ‘recapitalisation‘; see also A tough year for BIW). It seeks to reassure readers:

“Despite being its first ever fall in revenues, management believes that the business performed comparatively well during this period of unprecedented economic difficulty and that this underlines the strength of the SaaS model.” (p.2)

Middle East

After explaining the circumstances of its corporate restructuring in September and listing some new UK-based clients, BIW’s business review expands upon the impact of the downturn in the Gulf region:

“The Middle-Eastern operation, based in Dubai, suffered more acutely, with significant cancellations of projects and a paucity of new business. Importantly though, the Company agreed terms for all outstanding monies due from its Dubai-based clients, including Nakheel, has now collected those monies and has no outstanding debts in the region. Whilst the outlook for new projects in Dubai is poor, the Company has re-focused its sales & marketing efforts into neighboring [sic] Abu Dhabi (an oil-rich nation, currently investing heavily in infrastructure projects such as roads, educational establishments and hospitals) and is enjoying some early success there with key clients such as Mubadala…..” (p.3)

It would seem that BIW took an even bigger hit from the bursting of the Dubai construction bubble than its Australia-based rival Aconex (see post) – while fellow UK vendor 4Projects‘ decision not to pursue opportunities in the Middle East has been vindicated (post). The impact of project deferrals and cancellations on BIW is clear from the figure given for future revenues yet to be invoiced: down a quarter to £9.4m from last year’s £12.8m.


In November, I wrote again about BIW’s financial restructuring (see also BIW undertakes recapitalisation), and BIW’s new financial reports give a little further background, and – as one might expect – they portray its position in a positive light, stressing its absence of debt:

“Now, with a financially sound parent company with a strong balance sheet, monthly profitable trading, year-end cash of almost £1m and a un-used overdraft facility of £425,000 from Coutts & Co, the Company is in an enviable position in relation to its competitors and is able to weather adverse trading conditions and take advantage of an improvement in market conditions as the economy recovers.” (p.2)

(Remember, though, BIW’s debt-free advantage didn’t worry 4Projects’ Steve Nelson when I met him last month – see post.)


BIW’s positive messages are reiterated in a series of bullet points (p.3), to which is added the anticipated benefits of the new relationship with Sage CRE in north America (see post). However, does the opening claim – that BIW Technologies Ltd “remains the UK market leader” – still stand?

First, as the first graph above suggests, the gap on turnover between BIW and 4Projects is now much closer, and it is conceivable that 4Projects’ turnover in its financial year to 30 March 2010 could see it overtake BIW. The battle does, though, seem to be between these two companies as there is a big gap back to other UK-based vendors – and some of these have yet to report results for the same troubled period covered in BIW’s 2009 report.

Second, if leadership is based on profits (see second graph, plus post), 4Projects has been consistently profitable throughout its existence whereas BIW took some years to reach profitability. This year’s dip may be exaggerated by the exceptional expenses, but it remains to be seen how quickly BIW will be able to return to the c. £1m profit achieved in 2008 – let alone achieve the kind of figure achieved by 4Projects in its most recent accounts. And, again, other UK vendors have yet to reveal what profits or losses they posted this year (potentially, other vendors could have dips like BIW’s for 2009).

Third, much depends, of course, on how one measures market leadership. If only we had some reliable statistics about projects and unique currently active users, for instance, they might give a different picture to that conveyed solely by the financial performances. Others may look more closely at the technologies being developed and deployed; being ‘cutting edge’ might, for example, justify a claim to being the UK market leader even if financials or size of user base lags behind others.

Update (12 January 2010): Fourth, I suppose leadership might conceivably also be claimed on the basis that a company has the most employees, though it’s how efficiently those employees are deployed that really matters.

[* Disclosure: I worked for BIW Technologies Ltd from 2000 to May 2009, and have since undertaken occasional paid PR consultancy projects for the company.]

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  3. […] at the same reports myself (see BIW: Battered in Woking), I think Nathan’s use of the word ‘decline’ is possibly a bit strong. We are […]

  4. […] the industry downturn in the first few months of the year experienced by Aconex (post) and BIW (post) among […]

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  6. […] 2010, show a turnover of £6.59m (up from £5.934m in the year to 30 September 2009 – post) and a pre-tax loss of £140k (an improvement on the £0.73m losss last time). BIW was acquired by […]

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  8. […] BIW experienced when the Global Financial Crisis devastated the construction market in 2008 (read BIW – Battered in Woking), it retained a strong management team led by Colin Smith. After BIW plc went into administration, […]

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