First half results were broadly in-line with the Group’s plan for the shape of the year, save for an increased FX translation headwind and two medium-sized subscription deals slipping from Q2 into Q3
Adjusting for the previously disclosed early renewal of a significant contract, which caused approximately £20 million pull forward of revenue into September 2019, organic constant currency revenue3 declined 6.8%
Without this adjustment organic constant currency revenue declined3 by 11.7%
Recurring revenue as a percentage of total revenue increased to 64.2% (H1 FY20: 61.9%) and grew in three of AVEVA’s four business units
Reduction in adjusted costs2 of 8.3% (5.8% on a constant currency basis) as a result of tight cost control
Adjusted EBIT of £56.3m (H1 FY20: £90.6m) was impacted by the decline in revenue
Strong focus on strategic investments to drive future growth with R&D investment in AI, Cloud and Extended Reality and digital marketing investment increased
AVEVA’s position as a global leader in industrial software will be strengthened by the proposed acquisition of OSIsoft, a global leader in real-time industrial data software
Strong second half order pipeline underpins the Board’s confidence in its outlook for the full year
Interim dividend maintained at 15.5 pence per share, reflecting confidence in AVEVA’s resilience
OSIsoft update
OSIsoft has continued to perform strongly in the seven-month period ended 31 July 2020 with revenue increasing by 9.5% compared to the seven months ended 31 July 2019 and operating profit increasing by 110.1%. This positive trading momentum has continued in recent months, with billings increasing by approximately 12% in the first nine months of 2020 compared to the same period last year
Regulatory approvals on track. Expected to complete between December 2020 and February 2021
Underwritten Rights Issue to be launched very shortly
Chief Executive Officer, Craig Hayman said: "Given the Covid-19 disruption, AVEVA has performed creditably in what has been a relatively tough trading environment in the first half, and against very tough comparatives. We continue to see solid demand from our customers for AVEVA’s software to help them digitize and the long-term trend towards digitalization of the industrial world remains very exciting. Our order pipeline for the remainder of the year is strong and we expect the Group to achieve year-on-year revenue growth in the second half of the financial year. Despite the challenging market conditions, we have continued to make significant investments and progress in strengthening AVEVA’s position as a global leader in industrial software, including agreeing the proposed acquisition of OSIsoft.”
