Aveva profits fall 21% as oil and gas decline hits

With bidders circling, engineering software group Aveva reported what it said was a resilient performance in difficult markets with revenue and profit hitting reduced expectations.

Revenues fell 12% to £208.7m, or fell 7% at the organic constant currency level, with adjusted pre-tax profits down 21% to £62.1m as margins shrank to 29.8% from 33% a year ago.

Statutory profits declined 20% to £54.9m and earnings per share by 17% to 65.07p, with forecasts having been reduced with a profit warning last autumn as the company was hit by the reduction in activity in the upstream oil & gas sector due to the oil price slump.

A final dividend of 25p, up 14%, was declared.

"Despite the difficult trading environment, we have demonstrated our ability to capitalise on our strengths: a broad international reach and strong competitive positioning in all of our markets," said chief executive Richard Longdon.

Looking forward, he said he expected oil & gas spending to return to growth, "but the timing of this is uncertain".

The company is being eyed up by several potential overseas bidders, according to reports, including French energy company Schneider and US-based GE and Emerson.