AVEVA today hinted at results for the six months ending September 30 and announced that full details will be published on November 15. As expected, performance was strongest in Latin America, South Korea and Central and Eastern Europe, especially in oil and gas. Demand appears to have been strong in China, but the company’s change in business structure there affected revenue reported in this period.
Investors seem happy with the news, sending the share price up slightly on the London Stock Exchange, even though the company signaled that profits would take a hit due to the product line reorganization announced earlier this year. In its press release, AVEVA said that “Enterprise Solutions … revenue [is] substantially ahead of the same period last year. As planned, the cost base for the Enterprise Solutions division has increased as a result of the annualised effect of the investment made in 2010/11 together with the additional investments this year facilitating our revenue growth.” In other words, revenue is up but expenses are up, too.
The company provided a peek into the results for the six months ended September 30, 2010 that break down revenue as if Engineering & Design and Enterprise Solutions had been separate lines of business. For that six month period, Engineering & Design dominated the revenue picture, reporting £71.5 million of AVEVA’s total £78.5 million. As one would expect for a new product in its ramp-up phase, the Enterprise business posted an operating loss of £3.75 million. Many selling and operating expenses were shared, so this isn’t an exact picture of the new business line’s performance, but it will be interesting to see how “substantially ahead” the Enterprise business is this year and how it has developed in the year since this data.
AVEVA’s revenue is typically weighted towards the second half of its year (October – March) and the company expects that to be true again this year.
AVEVA will be announcing interim results on November 15, 2011.
