A build up of momentum at AVEVA during the final quarter has clearly had an impact on confidence at the engineering software company. A thriving oil and gas industry and boom time in Brazil were the major contributors to record revenues, and management thinks this year will see a repeat performance. However, with the shares chased 12 per cent higher post results, it will need to be to justify the current valuation.
Deepwater rig activity at an all-time implies strong demand for AVEVA's rig design software in a sector that already generates nearly half of all revenue, much of that in Brazil. The country accounts for about half the £38.2m of sales generated by the Americas business and expects grow of at least 20 per cent a year from here on. Rental growth in Europe, the Middle East and Africa pushed sales there up a fifth, too. So it was no surprise, then, that the core Engineering & Design division grew revenues by 11 per cent to £172m.
Chinese nuclear expansion should offer opportunities, but it's India that AVEVA is really getting excited about - expect a big push there in the coming months. There were a few disappointments though. Excluding acquisitions, revenues at the smaller data management division, which includes AVEVA NET, grew just 14 per cent and it posted a £4.4m loss. Marine will remain subdued, too.
Investec Securities expects adjusted EPS of 74.4p, up from 63.8p in 2012.
AVEVA (AVV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,663p | MARKET VALUE: | £1.13bn | |
| TOUCH: | 1,662-1,663p | 12-MONTH HIGH: | 1,801p | LOW: 1,290p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 28 | |
| NET ASSET VALUE | 326p* | NET CASH: | £179m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 128 | 45.0 | 50.8 | 6.65 |
| 2009 | 164 | 59.2 | 62.3 | 9.36 |
| 2010 | 148 | 49.6 | 49.4 | 16.90 |
| 2011 | 174 | 49.8 | 50.9 | 18.25 |
| 2012 | 196 | 57.7 | 58.9 | 21.0 |
| % change | +13 | +16 | +16 | +15 |
Ex-div: 20 Jun Payment: 27 Jul *Includes intangible assets of £49.4m, or 73p a share | ||||
