Aveva Group, the provider of engineering data and design IT systems, had another strong period in H1 (to September 30 2013) with double-digit revenue growth of 11% to £108.5m, although performance within the business varied. Adjusted PBT was up a reassuring 13% to £32.3m, with straight PBT up 6% to £27.3m, so it is managing good growth without runaway costs undermining progress.
The traditional side of the business, Engineering and Design Systems (88% of group revenue) saw 12% revenue growth but Enterprise Solutions, the new business area Aveva is looking to for expansion, only managed a lower than expected 5% uplift. This was attributed to two customers changing their plans, and the early stage of the target market which is dragging out sales cycles. Enterprise Solutions’ performance was a disappointment, especially as it reached the break-even milestone at the end of the last financial year (see here). Prospects are unlikely to change in the short-term but Aveva remains hopeful for the medium and long term.
Slow Enterprise Solutions performance pulled EMEA results down (4% revenue growth) but within the region the UK and Central Europe did well. Asia-Pacific was the star performer (up 22%) with the America’s coming in with 9% growth. Overall, momentum is growing for Everything 3D and with E3D AVEVA E3D Insight for Mobile and Cloud launched in October there are new offerings to take to market.
Aveva continues to perform better than Autodesk and is also doing better than Dassault in the wake of its recent warning. The question is how Autodesk’s acquisition of Delcam will impact Aveva (see here). It will certainly drive interest in Aveva but with Aveva doing well and operating in a lean fashion there is no bargain buy to be had here.