UK’s Aveva sees positive trends in energy and other markets

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)