PLMish results start in earnest this week, as both PTC and Dassault Systèmes talk about their June quarter results. But AVEVA kicked things off in their uniquely British way last week, updating us on how things are going so far in fiscal 2015 — and all seems to be to plan. With typical understatement, the announcement says “we have not seen any noticeable shift in the trends reported [in May] in either our end markets or from a geographical perspective”. What, you may ask, was that? Was it good? Bad? Somewhere in between?
The second half of fiscal 2014 was a confusing picture of growth and weakness: EMEA was up slightly on strength in Central and Western Europe tempered by weakness in Russia and the Middle East. The Americas were dragged down by problems in Brazil even though shale gas in North America is “booming”. Asia was the overall standout as China was “tough” but India, “good”, and South Korean shipyards continued their expansion from traditional shipbuilding into offshore oil & gas. Diversity in both geo and end-industry that appears to be continuing into the summer.
The company said that the March to June quarter is “seasonally the least significant” since many large contract renewals happen later in the year and the new “One AVEVA” go-to-market approach won’t really kick in until the second half of the fiscal year.
The one downbeat note in the announcement was that the continued strengthening of the British pound will likely hinder growth this year, since fully 90% of AVEVA’s revenue comes from outside UK. Even so, “[t]he Group … continued to see solid cash generation in the first quarter, resulting in net cash of £129 million at 30 June 2014.” That’s impressive, considering that it was £204 million a year ago, before distribution of a £100 million special dividend, and up from £118 million at the end of the 2014 fiscal year in March.
Bottom line: “Our expectations for the Group performance on a constant currency basis for the full financial year remain unchanged.” London City analysts expect the strong British Pound and other currency effects to cut something like 5% off revenue for the year, mainly in the first half, but still on average expect revenue to be 256 million, up 8% year/year.
In slightly other news, the Financial Times is once again reporting that AVEVA is a takeover candidate, this time by companies as diverse as Emerson, General Electric and Siemens on the major industrial conglomerate side, and “peers in product life cycle management such as Dassault Systemes”. I’ve even heard Autodesk and PTC mentioned. Every company is always a takeover candidate, so don’t get too excited about this — AVEVA comes up fairly often since it’s been growing well, is profitable, is executing on a product roadmap and has blue-chip customers. I’m not hearing anything that makes this a more imminent deal than anything rumored over the last 15 years.
Let’s see what PTC and DS have to say on Thursday — maybe more acquisitions there, too?