Attention Aconex Ltd (ASX: ACX) shareholders, watch out below…
Aconex Ltd Share Price
What happened?
In a statement to the ASX this morning, the construction software company delivered a trading update to the market.
Despite just setting its 2017 financial year forecasts in late October, the company lowered its revenue expectations and forecast a significant drop in profit.
The company said it continues to invest in itself but the Brexit and poor sales performances in the U.K. together with the Americas dampened its outlook. Aconex's full-year revenue is now expected to be between $160 million and $165 million. That's down from the revenue expectations set in October for $172 million to $180 million.
While the midpoint of the updated range would represent year over year revenue growth of 32%, its operating profit is expected to bear a heavier brunt of the soft conditions.
Indeed, the midpoint expectation for operating profit (excluding any costs associated with acquisitions and integration) is for 21% growth — down from 68% growth. That would represent an operating profit of $16.5 million, which ordinarily may be considered a top result.
Unfortunately, prior to Aconex's share price fall today the company was valued at $1.1 billion, or 47 times the midpoint of 2017's forecast operating profit.
It is easy to see why the market was disappointed.
