![Aconex chief executive Leigh Jasper is optimistic about the future with the business serving a 'large and ...](/content/dam/images/g/q/z/8/f/6/image.related.afrArticleLead.620x350.gudhrv.png/1487658977557.jpg)
The chief executive and co-founder of construction software business Aconex, Leigh Jasper, has defended his decision to sell-off a portion of his shares last year, despite it being a contributor to the company's sustained share price fall in the past six months.
"Entrepreneurs build businesses over many years and being able to have a modest selldown is important over time, because a lot of our net worth is tied up in the business," he said.
"Rob Phillpot and I are both significant shareholders and remain committed to the long-term growth. The shares we sold were a small amount – a couple of hundred thousand out of 12 million."
The comments come as Aconex shares fell another 6.17 per cent to $3.50 on the ASX on Tuesday, after its results failed to excite investors.
The business reported revenue growth of 38 per cent to $77 million for the first half, largely driven by the acquisition of German business Conject, and it also posted a statutory loss of $3.53 million for the half-year to December 31, compared to a profit of $4.55 million in the previous corresponding period.
The result was in line with the business' downgraded guidance issued in late January, which saw the company's value plunge 45 per cent in one day to $3.10, and included a $4 million currency hit.
Brexit hits revenue
Britain's vote to leave the European Union resulted in a $3 million whack to Aconex's revenue and a further $1 million was lost because of movements in the euro and US dollar.
Mr Jasper also admitted to having been overly optimistic about the growth of the European business on the back of the $96 million Conject acquisition.
"We overestimated how fast we could grow Conject during the integration phase," he said.
"But there have been good results out of mainland Germany and we expect Europe to move back into growth next year...We will continue to invest in product, sales, marketing and customer service to capture the large global market opportunity."
As well as the currency hit, Aconex suffered from a decline in new project spending in Britain, thanks to the market uncertainty.
Region growth
Without the impact of Britain, growth in Europe was in line with the company's expectations. Revenue from Europe and Africa grew 369 per cent thanks to the Conject acquisition, while the Americas region was up 16 per cent, Asia jumped 18 per cent and the Middle East grew 9 per cent.
Australia and New Zealand still contribute the most revenue to the business, with the local area growing 6 per cent to $25.27 million.
This growth was significantly down on recent previous periods, but this was anticipated by the company and Mr Jasper said he was confident the region would continue to grow thanks to opportunities around product upselling, new customers and through leveraging its network.
RBC Capital Markets vice-president of equity research, Paul Mason, said he was surprised by the degree of slowdown in the Australian market.
"Six per cent was pretty weak compared to what I expected and my impression was that the market expected more, too. The US and Americas were also stronger than I thought they would be, based on the commentary in January," he said.
Firm in 'strong position'
Despite the soft results, Mr Jasper said he was confident the company would maintain a mid- to long-term growth rate of more than 20 per cent.
"Aconex is in a strong position. It is the global market leader serving a very large and under-penetrated global market opportunity," Mr Jasper said on the analyst call.
"The US will grow on the back of increased infrastructure investment... We continue to invest in our product, sales and marketing functions and we've seen no overall change in the competitive environment around the world."
For the full-year the business is anticipating revenue of $160-165 million and earnings before interest, tax, depreciation and amortisation (excluding integration costs) of $15-18 million, but these figures do not factor in currency fluctuations.
"They have said that they now have 90 per cent stability in revenue numbers for 2017, and that excludes enterprise deals rolling over which are generally a very high percentage and they don't forecast additional users coming on board from its North American contracts... so in practice they probably have a stronger visibility into the revenue number," RBC Capital Markets vice-president of equity research, Paul Mason, said.