Aveva pleased with performance in first 10 months

Engineering and industrial software company Aveva Group updated the market on its trading for the 10 months ended 31 January on Thursday, reporting “high” single-digit organic constant currency revenue growth in the first 10 months of the financial year.

The FTSE 100 company said that was supported by “strong” orders in its rental and subscription division, for both on-premise and cloud solutions, partly offset by “significantly lower” initial and perpetual licences and services, as it had planned.

As such, Aveva siad its business model transition was still improving revenue mix and quality, providing customers with greater flexibility, while increasing long-term operating margins and cash flows.

As it had previously outlined, Aveva said it had achieved early contract renewals in the first half, with the corresponding revenue pull forward affecting third quarter revenue growth.

“On a regional basis, Aveva achieved growth across all of its reporting segments, with particularly good growth in Asia Pacific,” the board said in its statement.

“The ongoing disruption in China, caused by the coronavirus, due to travel restrictions and office closures, is having some impact on sales in that country.

“China has historically accounted for around 5% of Aveva’s overall group revenue.”

At a group level, Aveva said it had a “good start” to the fourth quarter, with the order pipeline for the remaining weeks of the financial year said to be solid.

At 0843 GMT, shares in Aveva Group were up 0.1% at 5,295p.