AVEVA Group hit by contracts slippage

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AVEVA Group PLC (LON:AVV), the engineering and industrial software specialist, said its half-year revenues were dented by adverse foreign exchange movements and contract slippage.

The company said revenue for the six months to the end of September had been “broadly in line” with expectations at about GBP333mln; the term “broadly” is usually taken by the market to signify a figure that falls slightly short, and the shares duly retreated 3.5% in early deals to 4,569p.

The group said two medium-sized subscription deals that were expected in the second quarter have now slipped into the third quarter of the current financial year.

Adjusting for the previously disclosed early renewal of a significant global account contract, which caused a GBP20 million pull forward of revenue into September 2019, the organic constant currency revenue year-on-year decline was 7%. Without this adjustment, the decline was 12%.

The group said its order book remains strong and it remains confident in the full-year outlook, which remains unchanged.

In a separate announcement, AVEVA said syndication of the revolving GBP250mln revolving credit facility to fund its proposed acquisition of OSIsoft has been completed.

The proposed US$900mln term loan that was also to have been syndicated will now be provided directly by Schneider Electric, which indirectly controls around two-fifths of AVEVA’s equity.

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