UK engineering firm Aveva is in a sweet spot in with some of its business interests at the moment according to its H1 trading statement and is still benefitting from demand from the oil and gas sector from emerging markets such as Latin America, South Korea and Central and Eastern Europe. But it might be wincing at missed opportunities when it looks at its business in China, which is still suffering the effects of a reorganization that is not expected to start showing positive results until H2, while demand for engineering and design products in North America is weak. Hopefully the absence of a specific reference to the UK market suggests at least a steady state.
The company has previously warned that revenue would be weighted to the back end of the year. Its transformation programme is ongoing (see Aveva remains steady thanks once again to oil and gas) as its builds its fledgling Enterprise Solutions business. Progress will be easy to track as it will now report its traditional engineering and design business (which generates the vast bulk of its revenue - H1 revenue £71.4m), and the enterprise solutions segment (H1 revenue of £6.9m) separately. At £78.5m, total revenue was essentially flat compared to H1 2010 but costs will have gone up and the enterprise solutions segment suffered a pre tax loss of £3.7m. The company is building, changing and reorganizing and has made a few acquisitions so this is not of great concern at the moment but the pressure is on to deliver in H2.