Growth in oil and gas fuels Aveva’s profits
ENGINEERING and design software group Aveva yesterday posted a 14 per cent rise in adjusted profit, helped by a strong demand at the end of the year from the oil and gas industries, increasing its confidence for the current year.
The group reported adjusted pretax profit of £62.3m, ahead of market forecasts of £60m. Revenues were up 13 per cent to £195.9m for the year to the end of March.
The company, whose software is used to design ships, oil refineries and nuclear power stations, said it expected a better performance in China after a restructuring.
Chief executive Richard Longdon said: “The strong close to last year has put Aveva in a very good position to deliver against our strategy and to continue our focused investment to expand the business in all areas.
“We expect growth in the oil and gas industry to continue apace along with our expanding presence in mining.
“Power is set to provide a solid base of customers continuing to prepare for the growth in nuclear whilst marine is expected to remain slow.”
The company’s shares jumped by 10.7 per cent to £16.38 after the announcement.
Longdon said that the prospects in China and Latin America were positive, adding that the firm is developing “a much larger organisation” in India.
Milan Radia at Jefferies said Aveva continues to benefit from strong demand in the integrated oil and gas sector, supporting his double-digit organic growth forecast for 2013.
“Premium growth is becoming scarce and Aveva accordingly deserves an emphatic premium rating,” said Radia.