AVEVA Group plc (LON:AVV), a global leader in engineering and industrial software, has announced the following trading update for the period from 1 April 2020 to 30 June 2020.
AVEVA continued to deliver strong growth in recurring revenue during the first quarter. Subscription revenue grew 30%, while as expected, Maintenance revenue was broadly flat and Perpetual licences and Services reduced substantially. This reduction was partly due to AVEVA’s ongoing transition to a subscription business model and partly due to disruption caused by Covid-19. Overall Group organic constant currency revenue declined 3.5%.
Despite the Covid-19 related disruption, demand for AVEVA’s software has been robust, due to its ability to drive efficiency, flexibility and sustainability for customers across a wide range of industries, with particularly good demand for Cloud solutions. The first quarter included substantial order wins in the power generation, marine, water, food and life sciences end markets, together with wins in oil & gas across a wide range of customers.
As previously outlined, AVEVA faces a tough comparative period in the first half of the 2021 financial year, particularly in Asia Pacific, partly due to the early renewal of a large contract in the prior year.
Notwithstanding the short-term challenges, the Covid-19 crisis is expected to accelerate the digitalisation of the industrial world as efficiency, flexibility and sustainability become increasingly urgent requirements for customers. The order pipeline for the remainder of the financial year is solid and is expected to benefit from large contract renewals in the second half of the financial year.
AVEVA maintains a strong balance sheet and had net cash and treasury deposits of £109.7 million at 30 June 2020. AVEVA will pay a full year dividend in respect of the financial year ended 31 March on 11 August 2020. The Group has made no redundancies in respect of Covid-19 and has not furloughed any staff.