AVEVA Fiscal Year Results Rosy By Comparison

Strong sales in Oil & Gas offset declining revenue in other industry segments. Recurring revenue rose as a percentage of total sales. Unlike most companies we cover, AVEVA has a significant presence in South America, where Oil & Gas are strong markets.

[Editor’s Note: The conversion used in this article is £1 = $1.45, the rate on June 10, 2010]

Plant IT software vendor AVEVA  (LON: AVV) reported results that are practically rosy—considering the economy—for its fiscal year ending March 31, 2010. Strong recurring revenue from its oil & gas customers cushioned the blow from lower revenue and income. Compared to a year earlier that were, by percentage, much better than the industry average.

Revenue for Fiscal Year 2010 was £148.3 million ($215.2 million), down 10% compared to FY 2009 revenue of £164.0 million ($238 million). Revenue was down 14% on a constant currencies basis.

Recurring revenue was up 9% to £102.7 million ($149 million), compared to £94.2 million ($136.7 million) in FY2009. Recurring revenue was 69% of total revenue, up from 57% a year earlier.

Net profit was £49.2 million ($71.4 million), down from £56.6 million ($82.1 million) a year earlier.
New license fees for products were down the most, off 39% from a year earlier. Total new license fees were £35.1 million ($50.9 million), compared to £57.7 million ($83.7 million) in FY09. Asia revenue was affected by deep cuts in Marine spending.

By regions, new license revenue from Asia/Pacific was £19.7 million, £13.5 million came from EMEA, and £1.9 million from the America.

AVEVA’s cash per share on March 31, 2010 was $94.17, a staggering figure compared to every other company we cover. The difference is that AVEVA has less than 1 million shares outstanding, while other companies we cover (including Autodesk, PTC, Dassault Systemes) have millions of shares.

The Final Analysis
AVEVA says Oil & Gas CAPEX (capital asset spending) was down 16% in calendar year 2009, and it expects 2010 CAPEX spending to be about the same. The drop in construction was offset by staff increases, which supported AVEVA’s recurring revenue.

AVEVA sees plenty of opportunity ahead, especially in Oil & Gas and power production. Projects in developing economies are more than making up for slowed activity in mature market regions. The company also expects sales growth in its AVEVA NET division, with its promise of single-screen access to all aspects of engineering IT information.

The company expects flat income for another two years in its Marine division.

Five charts follow, all courtesy AVEVA. §