Aveva confident on outlook after strong third quarter

Aveva said it was confident in its outlook for annual results after a "strong" third quarter improved revenue growth to about 1.5% in the first nine months of the year.

Organic constant currency recurring revenue rose 10% over nine months taking it to 68% of group revenue. On the same basis revenue rose 26% in the third quarter, the industrial software group said.

Revenue growth was driven by plenty of scheduled subscription renewals including a big three year contract in the food sector. A large engineering, procurement and construction contract was renewed early and two big marine contracts moved from annual fees to multiyear subscription.

The FTSE 100 company said its order pipeline for the rest of the year was solid though there were fewer big contract renewals than in the third quarter. On 31 December Aveva had $2.7bn (£2bn) of cash and no debt after its rights issue for the acquisition of OSI soft.

"The board remains confident in the full-year outlook for Aveva," the company said. "Notwithstanding the disruption seen to the trading environment in 2020, the trend towards the digitalisation of the industrial world is strong and the board remains excited about the significant growth opportunities ahead."

Aveva agreed to buy OSI soft, a US real-time data software maker, in August for $5bn including debt. OSIsoft is performing well and grew billings by 8.5% in the year to the end of December. The deal is due to get US approval in February and to complete soon after.