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SUMMARY OF CHAIRMAN'S STATEMENT
Revenue increased by 29% to £164 million.
Adjusted profit before tax increased by 31% to £62.6 million.
R&D investment increased by 28%.
Full year dividend increased by 41%.
Footprint expanded in growth economies.
I am pleased to report that in the year ended March 2009 AVEVA again achieved strong growth in revenue, profit and cash, despite increasing turbulence in many of the Group's end markets.
Revenue increased in the year by 29% to £164.0 million (2008 - £127.6 million). Key contributors to this were the levels of growth achieved in our Asia Pacific and Central, Eastern and Southern European regions (CES) where revenue increased 32% and 40% respectively. The mix of revenue remained broadly in line with those seen in previous years with recurring fees amounting to 57% of total revenue at £94.2 million (2008 - £66.1 million) and initial fees amounting to £57.7 million (2008 - £52.9 million).
Increased revenue combined with strong margins delivered an adjusted profit before tax, amortisation, share-based payments and goodwill adjustment of £62.6 million, which is an increase of 31% (2008 - £47.9 million). Adjusted earnings per share amounted to 67.33 pence (2008 - 55.22 pence) an increase of 22%. Profit before tax increased by 32% to £59.2 million (2008 - £45.0 million). Basic earnings per share was 62.27 pence (2008 - 50.80 pence).
In the first six months of the financial year the Company continued to increase investment in both its products and sales organisation, although in the second half the levels of investment slowed. The year as a whole saw increased investment in Research and Development of 28% to £27.3 million (2008 - £21.3 million). The Group's expansion of its existing regional offices in Mexico and Russia and the opening of a new office in Brazil increased the Group's global footprint in regions that offer significant opportunities and contributed to an increase in selling and distribution costs of 36% to £53.2 million (2008 - £39 million).
The Group's balance sheet strengthened considerably in the period as the Group's cash increased by 52%, and amounted to £126.2 million (2008 - £82.8 million) at the year end.
Continued growth in profit and a strong cash position lead the Board to recommend a final dividend of 6.5 pence (2008 - 5.0 pence). Combined with the interim dividend of 2.86 pence (2008 - 1.65 pence) this gives a full year dividend of 9.36 pence (2008 - 6.65 pence), an increase of 41%.
Subject to approval at the Annual General Meeting the final dividend will be paid on 31 July 2009 to shareholders on the register on 26 June 2009.
On behalf of the Board I would like to take this opportunity to thank all of our staff for their important contribution over the last twelve months. As all are aware, the market turbulence has made it necessary for the Board to review the structure of the Company. Inevitably, this has led to some very difficult decisions being made and a restructuring programme has been put in place in April 2009. The restructured skills base and annualised cost savings of approximately £5.0 million mean that AVEVA is now better equipped to trade through these challenging times. Despite the potentially unsettling nature of this programme, the hard work, support and efforts of all our staff has remained first class.
During the year Lennart Olsson, Head of Global Sales, retired. Lennart joined AVEVA as part of the acquisition of Tribon in 2004. Under his guidance, AVEVA's sales organisation has achieved outstanding results. On behalf of the Board and Company I wish Lennart a long and happy retirement.
Following the retirement of Lennart we were pleased to appoint Derek Middlemas as Group Operations Director, overseeing all sales and business development activities. Derek joined AVEVA in 2000 and brought with him a wealth of engineering experience. Over recent years Derek led our Business Strategy group, helping to align the ambitions of the Company with the requirements of the market. I have no doubt that Derek's industry knowledge and forward thinking approach will contribute greatly to our future success.
The sustained and considerable investment made by the Group over the past few years in developing our product range and expanding our geographical presence will ensure AVEVA maintains its position as a world leader in the markets in which it operates.
As the current global economic slowdown continues and the oil price and shipping rates sit at lower levels than in recent years, some projects are now being postponed or cancelled, awaiting project funding or visibility of more certain times. Against this backdrop, AVEVA's customer relations and 'best in class' products will remain ever more important and will help to maintain levels of recurring revenue and exploit new opportunities.
The restructuring programme already initiated means that AVEVA is better equipped to successfully trade through the difficult trading environment whilst allowing the Company to invest selectively in already identified important growth opportunities, for example with regard to AVEVA NET and in South America and the CIS.
Nick Prest
Chairman
26 May 2009
Sustained and considerable investment made over the past few years in developing our product range and expanding our geographical presence will ensure AVEVA maintains its position as a world leader.
BUILDING ON OUR STRATEGY
