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AVEVA impresses with first full year figures after mega-merger
FTSE 250 engineering design software supplier AVEVA (AVV) beat forecasts for its first full year results since its multi-million pound merger with Schneider Electric’s software business (SES), sparking a near 10% share price jump to £27.52.
The £4.3bn company posted better-than-expected underlying growth of around 10% from its core AVEVA business, while the SES side made a welcome return to growth (circa 2.5%), according to calculations by stockbroker Numis which has stripped out a large non-recurring project to give a better representation of how the business has performed.
Earnings before interest and tax (EBIT) of £166m were approximately 13% better than Numis’ forecast. That implies 8.9% progress on the previous year’s pro forma figures.
AVEVA sells computer-aided design tools used by engineers to design and build large infrastructure projects such as oil rigs and transporter ships.
The company merged with SES in March this year in a deal that effectively doubled the original AVEVA’s size. It has lifted cost synergy benefits from the tie-up from £10m to £25m a year.
The stronger trading has been put down to an escalation of oil industry build projects and wider use of digital tools by engineers.
Numis has lifted its March 2019 forecast by around 10% and now anticipates pre-tax profit of £169.6m, rising to £182.1m in 2020. (SF)