Aveva restructure

Aveva, a provider of engineering data and design IT systems, has announced strong results for the year ending 31 March 2009, but is anticipating difficult trading conditions ahead.

The Cambridge-based group reported a 29 per cent increase in revenue and a 31 per cent rise in adjusted profit before tax, up from £47.9m to £62.6m, following growth in the marine, oil and gas and power markets. Profit before tax was up 32 per cent to £59.2m and basic earnings per share increased 23 per cent to 62.27p.

These results were boosted by strong performances in the Asia Pacific and central, eastern and southern European regions (CES) where revenue increased by 32 per cent and 40 per cent respectively.

However, despite a robust order book in the first half of the year, Aveva said that increasing market turbulence and lower oil prices were causing some of its projects to be delayed and cancelled.

As a result, the second half of the year has seen a reduction in investment with the group embarking on a restructuring programme in an attempt to gain cost savings of £5m per year.

The programme is due to be completed in the first quarter of this year and is expected to include a decline in subcontractors, pay freezes, part-time working and redundancies.

Nick Prest, the group’s chairman, said: ‘As the current global economic slowdown continues and the oil price and shipping rates sit at lower levels than in recent years, some projects are now being postponed or cancelled, awaiting project funding or visibility of more certain times. Against this backdrop, Aveva’s customer relations and best-in-class products will remain ever more important and will help to maintain levels of recurring revenue and exploit new opportunities.’

Prest added: ‘The restructuring programme already initiated means that Aveva is better equipped to successfully trade through the difficult trading environment while allowing the company to invest selectively in already identified important growth opportunities, for example, with regard to Aveva Net and in South America and the CIS.’