Aconex shares spike on release of robust full-year guidance

Shares in the software market darling have rocketed after it flagged margins that topped expectations.

Daniel Palmer

Aconex co-founder and CEO Leigh Jasper (Source: Supplied)

less than 2 min read

1:02PMOctober 25, 2016

Market darling Aconex has rocketed more than 10 per cent on the release of full-year guidance that pointed to robust margins.

The project management software group (ACX), which listed in December 2014, said it anticipated revenue to land in a range of $172-$180 million, up at least 39 per cent on last year’s $123.4m result.

Its projected earnings before interest, tax, depreciation and amortisation are tipped to rise at least 62 per cent to $22-$25m, from $13.6m in fiscal 2016.

The numbers represent a slowdown in growth from a sharp 350 per cent surge in EBITDA last year and 50 per cent jump in revenue.

However, the EBITDA margins hinted at by the forecasts were welcomed given a sharp recent decline in its share price related to concerns over crimped margins.

“The EBITDA margins implied by the revised guidance are higher than our expectations, however the fiscal 2017 revenue outlook is slightly softer even after adjusting for currency impacts,” RBC analyst Paul Mason said.

“At the FY16 result, the lower revised EBITDA margin guidance (attributable to R&D investment) was a key reason for Aconex’s recent share price decline, so the stronger margin guidance is a positive.”

Aconex said its figures took into account “strong underlying growth and sales momentum”, specifically in its ANZ, Americas and Asian units, although European growth is set to be tempered by Brexit uncertainty while Middle East growth is hamstrung by weak oil prices.

“Current indicators are that new business will improve in the Middle East and based on the positive response to the Aconex platform in Europe, we expect performance in the region to improve throughout the year,” managing director Leigh Jasper said.

The group, which hit ASX boards at $1.90 a share in 2014 and peaked at $8.75 in July. At 12.37pm (AEDT) today, it was trading up 9.44 per cent at $5.68, paring gains slightly from an earlier 10.4 per cent rise.

Aconex reaffirmed long-term forecasts, with 20-25 per cent revenue growth tipped through fiscal 2018 and 2019, and EBITDA to be between 17 and 22 per cent of revenue during those two years.