Engineering design software firm Aveva returned to growth with a standout 19 per cent hike in first half licence sales, to £19.2m, and reporting adjusted pre-tax profits up 12 per cent to £24.6m.
Strong growth was seen in emerging markets, driven mainly by power and oil and gas sectors, with revenues in this segment up a third to £31.6m. It was the same story in the Americas with regional revenues 23 per cent higher at £14.7m. However, Europe continues to suffer the impact of economic turmoil and lack of any real growth in Germany and France. As a result, sales from Europe, Middle East and Africa (EMEA) slumped 7 per cent to £32.1m.
Operating costs have also been an issue though, rising 20 per cent in the six month period to £37.9m, which meant margins fell over 4 percentage points to 29 per cent, although that’s partly down to investment in AVEVA.NET, the company's online product suite. Still, a 11 per cent increase in recurring revenues provides decent sales visibility given this segment accounts for two thirds of group sales, while strong cashflows and a £140m cash pile make more acquisitions likely.
Evolution Securities expects full-year adjusted pre-tax profits of £56.4m and EPS of 57.9p (2010: £50.7m and 50.7p), rising to £63.8m and 65.6p, respectively, in 2011/12.
AVEVA (AVV) | ||||
---|---|---|---|---|
ORD PRICE: | 1,480p | MARKET VALUE: | £1.01bn | |
TOUCH: | 1479-1481p | 12-MONTH HIGH: | 1,572p | 893p |
DIVIDEND YIELD: | 1.2% | PE RATIO: | 30 | |
NET ASSET VALUE: | 262p* | NET CASH: | £140m |
Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2009 | 69.9 | 23.3 | 23.0 | 3.00 |
2010 | 78.5 | 23.1 | 23.2 | 3.36 |
% change | +12 | -1 | +1 | +12 |
Ex-div:05 Jan Payment:04 Feb *Includes intangible assets of £46.1m, or 68p per share |