Despite project delays in Brazil, engineering design software group Aveva (AVV) reported decent momentum during its first half. Indeed, recurring revenue grew 14 per cent in the period and now generates 69 per cent of group sales, while - on the back of further expansion among its large engineering contractors - underlying revenue at the engineering & design systems business rose 10 per cent to £85.4m.
Sales in the Europe, Middle East and Africa (EMEA) unit and the Asia Pacific operation rose 13 per cent and 21 per cent, respectively, although the Americas business registered just a 6 per cent sales rise. That partly reflected tough comparatives, but also delays in Brazil - a major contributor to last year's robust oil and gas revenues. Finance director James Kidd believes the setbacks are only temporary. "Regulators in Brazil require our customers to source local expertise, which is delaying projects," he says. "After a flat performance, we expect growth to pick up there in the second half." Mr Kidd is also confident that budget cycles in China, skewed to Aveva's second half, will have a favourable impact.
Operating expenses rose 19 per cent year-on-year to £40.5m as Aveva beefed-up sales teams, expanded into India and promoted Everything3D - a new product, due for launch in December. Broker Panmure Gordon expects full-year adjusted pre-tax profit of £82.6m, giving EPS of 83.8p (from £62.3m and 65.4p in 2012).
AVEVA (AVV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,966p | MARKET VALUE: | £1.34bn | |
| TOUCH: | 1,960-1,969p | 12-MONTH HIGH: | 2,079p | LOW: 1,408p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 331p* | NET CASH: | £166.4m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 85.2 | 23.8 | 24.5 | 4.0 |
| 2012 | 97.6 | 25.8 | 27.0 | 4.5 |
| % change | +15 | +8 | +11 | +13 |
Ex-div: 2 Jan Payment: 1 Feb *Includes intangible assets of £63.7m, or 94p a share | ||||
