AVEVA announces H1, inline with September reset

AVEVA today announced fiscal H1 2015 revenue of £86 million, down 21% year/year — basically as announced in October. The good news: no new bad news. I still need to parse the details, but at a high level:

• The company reported strength in China, India and parts of EMEA, offset by weakness in the key markets of South Korea and Brazil.
• AVEVA Everything 3D (aka E3D) is “now a meaningful contributor to revenue, with an acceleration in larger deals during the period” — hope to find out more about that since customers at AVEVA’s user conference last month showed huge interest but are slow to roll out the new generation product. often alongside PDMS.
• The press release includes this teaser: “Negotiated new multi-year deals with Global Accounts at improved pricing, with AVEVA E3D an important driver”. E3D has premium pricing and it’s great to see that the price held even though AVEVA must have pushed pretty hard to close deals, knowing that H1 was going to massively disappoint investors.
• AVEVA has put in place a cost containment program that is expected to generate about £10 million in savings in H2.

CEO Richard Longdon is quoted in the press release as saying, “Whilst the first half financial performance has been disappointing, the underlying fundamentals of the business have not changed given our market leading technology and long-term customer relationships. Despite the macro-economic environment, there are a number of steps we are proactively taking to ensure that we remain focused on long-term growth in revenue and profitability. We continue to maintain a strong balance sheet, with high levels of cash generation and highly defensible positions in our chosen markets, all of which are underpinned by long-term structural growth drivers. As a result, we anticipate achieving a result in the current fiscal year in line with the Board’s expectations.” It looks as though London City analysts are modeling revenue of about £220 million for fiscal 2015, which would be a 7% decline year/year. In case you’re wondering how that’s possible, AVEVA’s revenue has historically been weighted very heavily towards H2, enabling it to make up some ground — sales of E3D should also help boost H2. More when I’ve had the chance to go over the investor materials and briefing.