Feature on Stockhouse.... Conac Builds With Revenues, New B2B Products,Acquisitions
Conac Software is trying to carve its piece out of the exploding construction industry in the United States. The Canadian firm is readying its products for the B2B market and is in talks with possible acquisition targets in the US.
Calgary, AB, June 15 /SHfn/ -- Conac Software [V.COT] is trying to make tech savvy investors pay attention to its efforts to sell its software to the construction industry. The Richmond, BC-based software developer is attempting to make its mark on the CDNX with revenue growth, B2B products and its acquisition strategy in the US.
In its March Q2 report, Conac announced a 38% increase in revenues, to $1,273,000, for the period ending January 31, 2000. With Q3 results due out at the end of this month, CEO Jacqueline Michael is forecasting more good news. "There's definitely revenue growth from the last quarter as well as from last year," says Michael. "Compared to last year, it's phenomenal."
"There's definitely revenue growth from the last quarter as well as from last year," says Michael. "Compared to last year, it's phenomenal."
Investors have been waiting for Q3 numbers to come out. Shares have been trading sideways for the past month on thin volume, closing at $0.34 on June 13, well off their $1.19 high set in early March.
Conac markets and develops software for the construction industry. The Conac Software 2000 series includes Conac TrackPoint, a multiple-user system used in job cost estimating and Conac Axis c/s, a customizable product for every stage of the construction process.
The company is currently developing and preparing its products for the B2B marketplace. A "thin client" architecture will be used to Internet-enable Conac products for B2B use. Michael says the B2B drive will mean good things for the Canadian small cap. The development stage should last one year, according to the company's Q2 report.
"We are looking at an extremely broad vision for this company. I can't disclose too much but we're really looking very seriously at taking this company to a completely new level," she enthuses.
Acquisitions may play a role in the move to this new level. Tom D'Sena, vice-president development and marketing is enthusiastic about the company's current acquisition prospects, "Some of the companies are kind of a fair size compared to ourselves so it will be a fairly major acquisition." D'Sena is confident that Conac will be announcing the agreements and that they will be done deals. He also says the announcements "will definitely be before six months."
"We are positioning the company for very substantial growth and everything should come into play, I would say in the next three to six months."
A technology leader in its industry, Conac's software boasts the ability to seamlessly access data and download it for job scheduling, estimating and accounting. There is no need to link to third party software to update information that is input to accounts receivable or payable. When data is entered, it automatically updates the general ledger, job costs, equipment costs, service dispatch and other aspects of the project. By not having to leave the program and go into other modules to import data, unbalanced records are prevented.
This seamless quality, Michael says, sets Conac's product apart from competitors like Timberline Software [TMBS]. She says that despite Timberline's lion share of the market, "they don't necessarily have the best product." She says that although some competitors profess to a totally seamless product, this isn't the case. "We have ex-Timberline people working for us that have said the flow [in Timberline products] is not as seamless as our system."
However, Timberline's latest quarterly report did have a certain flow that undoubtedly pleased investors. Timberline reported revenues of US$12,340,000 and $0.07 per share. Despite Conac's 38% revenues increase, the company still showed a loss of $0.02 per share. Conac reported a loss of $0.08 per share for the same period in 1999. Not surprisingly, Timberline's market cap of US$100 million towers over Conac's C$8 million.
At the moment, Conac's main hurdle is to increase awareness of its product in the construction industry and increase sales. There is an estimated US$6 billion market for construction project management software. Michael says the company is working on entrenching itself in the US market where the construction industry is booming. As part of its marketing strategy, Conac will be in every major trade show, including this week's Electric East Show in New York.
Along with its acquisition strategy, Conac's participation in major trade shows should raise the company's profile with the public and in the investment community, says CEO Michael.
Conac believes its project management software leads the industry and if Q3 growth is truly "phenomenal," this Canadian small cap may prove to be a worthy long-term investment for the risk-tolerant investor. "We are positioning the company for very substantial growth and everything should come into play, I would say in the next three to six months," says D'Sena. |
