FTSE 100 listed IT company, Aveva (LON:AVV), saw its shares slide on Monday morning, as the company saw half-year revenues slide due to COVID disruption.
The company said that revenues are expected to finish at £333 million for the first half period, which it said was ‘broadly in-line’ with the group’s plans, save for FX-related headwinds and two medium-sized subscription deals slipping from the second to third quarter.
One of these contracts was the renewal of a ‘significant’ global account. With revenues from this contract being pulled forwards into September 2019, unadjusted revenues declined by 12% in H1 2020. Accounting for the contract renewal, revenues declined year-on-year by 7% during the first half.
Speaking on the confidence it has in its offering, and future prospects, the Aveva statement read: “Notwithstanding Covid-19 related disruption, there has been solid demand for AVEVA’s software due to its ability to drive efficiency, flexibility and sustainability for customers across a wide range of industries. AVEVA has performed creditably in the first half against this backdrop and its outlook for the full year remains unchanged.”
“The order pipeline for the remainder of the financial year is strong, underpinned by a higher volume of contract renewals, including major Global Account contracts, as well as the contracts that slipped from the second quarter. As such, the Board expects to see solid revenue growth in the second half and remains confident in the full year outlook.”
Following the update, Aveva shares slid by 4.79% or 227.00p, to 4,499.00p 21/10/20 11:45 GMT. This more than 6% above its consensus target price of 4,209p, but far below its year-to-date high of 5,290p.
The company currently has a consensus ‘Hold’ rating, and a 63.49% ‘Underperform’ stance from the Marketbeat community. Its p/e ratio is 43.57, below the IT and tech average of 65.37.