Broker Data

This is the latest broker data from Monday 27th the day before volume/SP started to increase. MS doing the heavy lifting.... Apart from UBS, retail offloading shares......



Trade history on the ASX......



Shorts decreasing over 1 day/week/month period.....



(Below) Is the transcript form 30/1. I have a theory that MS were doing the second wave of shorting from the disappointing profit downgrade announced. Its possible the events that occurred were not structural and might be one-offs. Further profit downgrades may never eventuate. MS were extremely bullish on ACX prior to these events. The question is, are they turning bullish once again....

James Bales: (Morgan Stanley, Analyst) Hi guys. Firstly, I'd just like to understand a bit more about what has happened. It implies a big miss especially in the Americas and UK in a business where at the start of the year you have 72% of revenue is locked in. Can you explain what happened and has the miss all been a result of new sales? Or has there been work that's been locked in that hasn't come to fruition?

Leigh Jasper: Thanks James. This is a combination of factors. We have seen slightly slower new sales in the UK and the US being primary markets where we were down in our expectations. That said, primarily it hasn't flown through to revenue quite as quickly as we'd expect given a high proportion of very long contracts in our sales results over the last six months. We also saw some one-off impacts associated with bringing the Conject business into Aconex. Our aligning financials to how we recognise revenue and how we bring revenue into account in the Aconex business. So, that accounts for some of that miss in Europe. In our other regions, we're seeing sales progress as expected, and seen revenue progress as expected in those regions. The other point I would note is that there is a currency impact as well of around $1 million on revenue from the Pound and the Euro.

James Bales: (Morgan Stanley, Analyst) That's since the last guidance?

Leigh Jasper: It's in addition to guidance. I think that's right.

James Bales: (Morgan Stanley, Analyst) What about the change in the total value of pipeline? Has that decelerated materially?

Leigh Jasper: No, we're seeing, I mean in terms of pipeline growth we're seeing the pipeline grow as we would have expected during the year. I think we have seen some delays in decision making, so by definition that also tends to increase your pipeline if deals get pushed back. But certainly, given large infrastructure programs, uncertainty can mean that those get pushed back. At this stage, we've seen no issues with the overall pipeline and that continued to grow in line with expectations. I think the way we see this is really a, if you like, a pause in the growth in business rather than a change in the long-term outlook for how we would expect the business to grow.

James Bales: (Morgan Stanley, Analyst) So, you still believe in the 20% long term sales growth target?

Leigh Jasper: At this stage, yes. We will obviously do more work on our forward forecast over the coming weeks. At this stage, we and I believe that we still have a very large market we're selling into. We've had growth rate in excess of 20% to 25% on a compounding basis for many years. Given the fact that we're selling to a large market, big market opportunity and we've been able to grow consistently at that growth rate or higher, we believe that we will be able to operate high growth rates moving forward.

James Bales: (Morgan Stanley, Analyst) Then finally the cost base that's implied in guidance is lower, is there any scale back of sales marketing and R&D as a result of the softness in revenue you've experienced?

Leigh Jasper: The nature of the business of course is that we have very high gross margin. So, if we see a blow on revenue that can flow straight through to the bottom line. Through to EBITDA. We are of course looking to balance profitability and growth. We have been controlling some of that investment. As I mentioned before, we will continue to invest in growth. We have pulled it back a little bit from our original expectations, but certainly moving forward we expect to continue to invest in growth and we'll do it in the next half. We continue to invest in sales, in marketing, and in the product.

James Bales: (Morgan Stanley, Analyst) Right, thanks

Please note the picture below has nothing to do with ACX. If the tide starts to change the heading has a strong message though..... Please proceed with caution investing/trading in this company.....