Top Stories
UK’s Aveva sees positive trends in energy and other markets
Global Banking & Finance Review®
Company
By Paul Sandle
LONDON (Reuters) -Britain’s Aveva said its key energy and power markets were showing positive trends, bolstering its confidence after the industrial software firm warned in April that growth would slow this year and its margin would be squeezed by higher costs.
“A year back nobody was worried about the security of energy and the resilience of the supply chain,” Chief Executive Peter Herweck told Reuters.
“That has changed over the last year. And Aveva is of course strong in markets like energy, like power transmission.”
Aveva reported a 7.1% rise in pro-forma revenue to 1.24 billion pounds ($1.55 billion) for the year to end-March on Wednesday, while adjusted operating profit rose 7.7% to 365.1 million pounds.
The group, however, reiterated its warning that revenue growth would be lower this year on an organic constant currency basis and its adjusted operating profit margin was expected to reduce due to higher costs, including wage inflation.
Aveva said it implemented a “substantial” increase to its list prices in April, but it cautioned that the higher prices would only take effect when contracts were renewed or new business was signed.
Herweck said he was focused on accelerating Aveva’s annualised recurring revenue growth from 10.2% in the last 12 months, slightly ahead of its 9% guidance, to 15-20% this year.
Shares in the group, which fell to a four year low in April when it warned on its growth and earnings, were trading up 3.7% at 2,312 pence in morning deals.
($1 = 0.7959 pounds)
(Editing by James Davey and Louise Heavens)
Pro-forma revenue refers to a company's projected or estimated revenue, often used to provide a clearer picture of financial performance by excluding certain expenses or income that may not be part of the core operations.
Adjusted operating profit is a measure of a company's profitability that excludes certain non-recurring items, providing a clearer view of the ongoing operational performance.
Organic growth refers to the increase in a company's revenue generated from its existing operations, excluding any revenue from acquisitions or mergers.
Wage inflation is the increase in the average wage level in an economy over time, often leading to higher costs for businesses and potentially impacting profit margins.
Recurring revenue is the portion of a company's revenue that is expected to continue in the future, often derived from subscriptions or long-term contracts.
Explore more articles in the Top Stories category
