Aveva hands back half its cash

Large and increasingly complex oil & gas projects were a major driver at the core engineering and design business, where underlying revenue grew 9 per cent to a record £189m. Much of that came from the UK, Russia and the Middle East, and strong licence growth in Asia, especially China. That made up for a lacklustre performance in the Americas where delays at Brazilian oil giant Petrobras meant less work for Aveva’s engineering customers, capping sales growth at just 3 per cent. Still, business there is picking up, says finance boss James Kidd, and Latin America should return to growth this year.

Nuclear new-build in China and India has underpinned growth in power, too, and fewer discounts on its new Everything3D plant design software should help margins. The response so far has been "highly encouraging". Crucially, the enterprise solutions division has finally made a profit and annual growth of at least 20 per cent is sustainable from here, says Mr Kidd.

Broker Panmure Gordon expects a pre-tax profit of £82.5m in 2014, giving underlying EPS of 83.6p, up from £70.7m and 77.5p, respectively, in 2013.