AVEVA share price blitzed as revenues plummet
AVEVA, the Cambridge engineering and industrial software specialist, lost 264p (almost six per cent) off its UK share price after a disappointing trading update for the first half of its FY 2021. It covers the period from April 1 to September 30, 2020.
The group expects to report revenue of around £333 million for the first half of FY 2021.
While this was broadly in-line with the group's plan for the shape of the year, stockholders were spooked by a double whammy – an increased FX translation headwind and two medium sized subscription deals slipping from Q2 into Q3.
Despite the coronavirus pandemic, AVEVA reported solid demand for its software due to what it described as “its ability to drive efficiency, flexibility and sustainability for customers across a wide range of industries.”
The company added: “AVEVA has performed creditably in the first half against this backdrop and its outlook for the full year remains unchanged. Adjusting for the previously disclosed early renewal of a significant global account contract, which caused a £20 million pull forward of revenue into September 2019, the organic constant currency revenue decline was seven per cent. Without this adjustment, the decline was 12 per cent.”
AVEVA says the order pipeline for the remainder of the financial year is strong, underpinned by a higher volume of contract renewals, including major international contracts, as well as deals that slipped from the second quarter.
“As such, the board expects to see solid revenue growth in the second half and remains confident in the full year outlook,” a statement to London Stock Exchange added.
• AVEVA will announce its results for the six months ended September 30 November 5 but the board doesn’t expect any fireworks.