By Alistair Gray
Published: January 19 2008 02:00 | Last updated: January 19 2008 02:00
Growth in its end markets of oil, gas and shipping has allowed Aveva, which makes engineering software for companies such as Royal Dutch Shell, DuPont and BP, to continue to locate growth while many peers face declining IT budgets and a consumer slowdown. Another strong trading performance – in the usually slower third quarter – prompted profit upgrades. The City was particularly pleased by good figures at the Asian division. Strong demand coupled with high energy prices means Aveva’s customers continue to invest, although concerns have emerged recently that Asian shipbuilders may face declining orders, which may eat into growth. Future prospects are bolstered by Aveva Net, the network collaboration software dubbed “Google for engineers”. Moreover, with a healthy cash balance in excess of £60m, the company will return cash to shareholders if acquisitions are not forthcoming. The shares, which moved into the FTSE 250 just over a year ago, rose by 11 per cent yesterday. Before that jump they traded on a price to earnings multiple of 19.4, although its niche products make comparisons with the rest of the IT sector rather unhelpful. Alistair Gray
Copyright The Financial Times Limited 2008
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