RNS Number:6802R
Aveva Group PLC
05 November 2003
AVEVA Group plc
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
AVEVA Group plc ("AVEVA"; stock code: AVV) the Cambridge headquartered leader in
the international market for engineering data and design IT systems, has
announced its unaudited interim results for the six months ended 30 September
2003.
Key points:
* Solid results with increases in profit, earnings per share and cash.
* Revenue was up 2% to #16.8m (2002: #16.5m).
* Profit before tax and amortisation of intangible assets increased by
8% to #1.67m (2002: #1.54m).
* Earnings per share before amortisation of intangibles were up by 7% to
7.06p (2002: 6.59p).
* Profit before tax increased by 11% to #1.36m (2002: #1.23m).
* An interim dividend of 1.80p will be paid (2002: 1.80p).
* Net cash at 30 September was #4.6m (2002: #3.0m).
* Against an unsettled industrial background, strongest performance was
achieved in Asia-Pacific and EMEA; North America was disappointing.
* Shortly after the period end, an important alliance with Autodesk,
Inc. was signed.
On outlook, Chairman, Richard King stated:
"The favourable market response to our new product offerings together with the
good forward visibility provided by a strong base of recurring revenues gives
AVEVA confidence in its ability to achieve satisfactory results for the year as
a whole."
For further information, please contact:
Richard Longdon, Chief Executive; today:
020-7444-4140
Paul Taylor, Finance Director thereafter:
01223-556611
www.aveva.com
Steve Liebmann at Bankside 020-7444-4163/
07802 888159
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report AVEVA's results for the six months ended 30 September
2003. These are solid results with satisfactory increases in profit, earnings
per share and cash. As in the past two years, we expect the balance of our
business to be heavily biased towards the second half year, reflecting a trading
pattern which has become established for AVEVA.
Results, Finance and Dividend
Turnover increased by 2% to #16.8 million (2002: #16.5 million) with recurring
revenues accounting for 59% of total revenue (2002: 60%). Profit before tax
increased by 11% to #1.36 million (2002: #1.23 million) and earnings per share
were up by 9% at 5.25p (2002: 4.78p). Profit before tax and amortisation of
intangible assets arising from acquisitions increased by 8% to #1.67 million
(2002: #1.54 million) and earnings per share on a similar basis were 7.06p
(2002: 6.59p).
Net cash as at 30 September 2003 was #4.6 million (2002: #3.0 million).
The Board has approved an interim dividend of 1.80p (2002: 1.80p) to be paid on
30 January 2004 to all shareholders on the register on 9 January 2004. As
previously, a decision on the dividend for the full year will be taken in the
light of the results achieved for the year as a whole.
Operations
Trends
The industry background continues to be challenging with the investment
decisions of our customers - the builders and operators of major process plant -
being influenced by world economic events and trends.
Increasingly, execution of multinational engineering projects is migrating from
'developed' mature economies to 'developing' nations in Asia-Pacific, Russia and
Eastern Europe.
A licence sale made in one geographic market may be used in various locations
around the world dependent on where the projects are being executed.
AVEVA is well placed to respond to these changes as it now trades from 22
offices in 16 countries with agency representation in a further 17 countries.
Geographic
After an improved performance last year, North American revenues were
disappointing in the half year. There are two factors which have contributed
towards this: the execution of some international projects has migrated to other
geographic markets and the US domestic market remains depressed and highly
competitive.
In contrast, Asia-Pacific performed very strongly with a 12% growth in revenue,
albeit starting from a smaller base. The investment AVEVA has made in a direct
sales and support infrastructure is starting to show benefits. We have also been
helped by the increasing migration of major projects into the region and general
economic strength, particularly in Korea and China. Some major contract gains
were made including a US$2.5 million order for AVEVA's new VNET software and
services over two years for the world's largest single petrochemical processing
facility in Nanhai, China, in a project led by Shell and BSF, a consortium
comprising Bechtel, Sinopec and Foster Wheeler.
Europe (including the UK) also performed strongly during the half year with
revenues up by 11% including contributions from new business in Eastern and
Southern European countries. Elsewhere, Russian engineering companies and plant
operators are becoming increasingly active within international markets. AVEVA
now has representation in Russia and has gained its first major order for
software and services from a Russian customer.
Markets
Sales into the oil and gas sector have been strong in most geographic markets;
Russia and East European countries stand out as being particularly buoyant in
this sector while the USA was noticeably quiet. In power generation,
Asia-Pacific was strong generally and particularly China - a market in which
AVEVA is the clear leader. With the exception of the large order mentioned above
the petrochemicals sector was steady and in pharmaceuticals, the anticipated
pick up in activity was slower to come through than expected.
Products and services
At a major industry convention in Houston, Texas, early in 2003 AVEVA
'showcased' key new software products including VNET Navigator and the enhanced
'next generation' of its core PDMS 3D design offering. These products were
released to the market on schedule in June and have been well received. AVEVA
believes that its current product range is very strong and highly competitive.
The partnership alliance signed with Autodesk in October brings together leading
2D and 3D technologies and will result in a combined product being offered by
the AVEVA channel next summer. News of the alliance has been favourably received
by both existing and potential customers.
Managed Services performed steadily. Although no new contracts were signed
during the period, reasonable prospects are currently under discussion.
Board and Management
In July 2003, Tony Christian left the company and the Board. Over the previous
five years, he had played an important role in broadening AVEVA's product
portfolio beyond the core 3D design software and the introduction of its managed
services offering. The Board wishes Tony well for the future.
Outlook
The favourable market response to our new product offerings together with the
good forward visibility provided by a strong base of recurring revenues gives
AVEVA confidence in its ability to achieve satisfactory results for the year as
a whole.
Richard King 5 November 2003
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Notes 6 months ended 30 September Year ended
31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Turnover 2 16,837 16,462 36,008
Cost of sales (6,561) (6,846) (13,047)
--------- --------- -----------
Gross profit 10,276 9,616 22,961
Other operating expenses (8,900) (8,332) (17,343)
--------- --------- -----------
Operating profit 1,376 1,284 5,618
Finance (expense)/income (13) (50) (38)
(net)
--------- --------- -----------
Profit on ordinary activities before
taxation 1,363 1,234 5,580
Tax on profit on ordinary (463) (420) (1,922)
activities
--------- --------- -----------
Profit on ordinary
activities after taxation 900 814 3,658
--------- --------- -----------
Profit retained for the 592 508 2,703
period
--------- --------- -----------
Basic earnings per share 4 5.25p 4.78p 21.46p
Diluted earnings per 4 5.19p 4.72p 21.24p
share
Dividend per equity share 3 1.80p 1.80p 5.60p
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
6 months ended 30 September Year ended 31
2003 2002 March 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Profit for the period 900 814 3,658
Translation loss arising on (177) (569) (437)
consolidation
----------- --------- -----------
Total recognised gains and losses
relating to the period 723 245 3,221
----------- --------- -----------
Prior year adjustment - - -
----------- --------- -----------
Total recognised gains and losses
recognised since last annual report 723 245 3,221
----------- --------- -----------
CONSOLIDATED BALANCE SHEET
AS AT 30 SEPTEMBER 2003
At 30 September At 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Fixed assets
Goodwill 1,447 1,714 1,580
Intangible assets 2,153 2,505 2,329
Tangible assets 5,336 3,848 4,674
----------- --------- -----------
8,936 8,067 8,583
----------- --------- -----------
Current assets
Stocks 758 1,213 758
Debtors 13,987 12,591 16,244
Cash at bank and at hand 5,046 2,972 5,129
----------- --------- -----------
Creditors 19,791 16,776 22,131
Amounts falling due within one year (8,637) (8,013) (11,548)
----------- --------- -----------
Net current assets 11,154 8,763 10,583
----------- --------- -----------
Total assets less current 20,090 16,830 19,166
liabilities
Creditors
Amounts falling due after more than (70) - (112)
one year
Provision for liabilities and (523) (583) (472)
charges
----------- --------- -----------
Net assets 19,497 16,247 18,582
----------- --------- -----------
Capital and reserves
Called-up share capital 1,725 1,704 1,705
Share premium account 7,798 7,311 7,318
Profit and loss account 9,974 7,232 9,559
----------- --------- -----------
Shareholders' funds - all equity 19,497 16,247 18,582
----------- --------- -----------
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
6 months ended 30 September Year ended 31
2003 2002 March 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Notes
Net cash (outflow)/inflow
from operating activities 5 2,180 (485) 3,232
Returns on investment and (13) (50) (38)
servicing of finance
Taxation (1,062) (1,520) (2,123)
Capital expenditure and (1,237) (669) (1,735)
financial investment
Equity dividends paid (647) (613) (922)
---------- ---------- ----------
Cash (outflow)/inflow (779) (3,337) (1,586)
before financing
Financing 441 11 (11)
---------- ---------- ----------
(Decrease) /increase in
cash in the period (338) (3,326) (1,597)
---------- ---------- ----------
NOTES
1. Basis of preparation
The financial information contained in this interim report does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
interim financial information is unaudited but has been reviewed by the auditor.
The financial information for the year ended 31 March 2003 has been extracted
from the statutory accounts of AVEVA Group plc for that period, which have been
delivered to the Registrars of Companies. The report of the auditors was
unqualified and did not contain a statement under section 237 (2) or 237 (3) of
the Companies Act 1985.
The financial information has been prepared using the same accounting policies
as the audited accounts for the year ended 31 March 2003.
The interim report for the six months ended 30 September 2003 was approved by
the Board on 4 November 2003.
2. Analysis of turnover
6 months ended 30 September Year ended 31
2003 2002 March 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
By destination:
United Kingdom 1,381 2,370 6,346
Rest of Europe, Middle East and 7,048 5,199 11,029
Africa
Americas 4,344 5,278 10,102
Asia-Pacific 4,064 3,615 8,531
----------- --------- -----------
16,837 16,462 36,008
----------- --------- -----------
3. Interim ordinary dividend
The proposed interim dividend of 1.80p per ordinary share will be payable on 30
January 2004 to shareholders on the register on 9 January 2004.
4. Earnings per share
6 months ended 30 September Year ended 31
2003 2002 March 2003
(unaudited) (unaudited) (audited)
Profit on ordinary activities after #900,000 #814,000 #3,658,000
tax
Ordinary shares of 10p each in 17,134,320 17,039,607 17,042,245
issue
Diluted ordinary shares of 10p 17,343,550 17,249,072 17,222,785
each
The number of shares in the table above represent the weighted average number of
shares during the periods shown.
5. Reconciliation of operating profit to net cash inflow from operating
activities
6 months ended 30 September Year ended 31
2003 2002 March 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Operating profit 1,376 1,284 5,618
Depreciation and amortisation 865 921 1,661
charges
(Profit)/loss on disposal of fixed 7 (12) (4)
assets
Decrease/(increase) in stocks - - 200
Decrease/(increase) in debtors 1,565 (28) (2,798)
Decrease/(increase) in creditors (1,633) (2,650) (1,445)
----------- --------- -----------
Net cash inflow from operating 2,180 (485) 3,232
activities ----------- --------- -----------
6. Interim Report
The Interim Report will be posted to shareholders shortly and copies will be
available from AVEVA Group plc's Registered office, High Cross, Madingley Road,
Cambridge CB3 0HB.
This information is provided by RNS
The company news service from the London Stock Exchange
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