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Aveva smashes City expectations after Schneider merger

Software engineer Aveva has trounced City expectations in its first results announcement since completing a multi-billion pound merger with French energy company Schneider Electric.
Adjusted annual profit before tax rose 20pc to ?117.2m on revenue of ?704.6m in the year to March 31. The share of profit before tax posted by Aveva’s legacy operations was ?67.8m, well ahead of analyst forecasts of ?53.3m.
Around ?500m was added to the FTSE 250 company’s market value after its shares surged 13pc.
Aveva announced a third attempt at a tie-up with Schneider Electric’s software arm last September, and completed the deal in March. The merger resulted in the French company taking a majority stake in its Cambridge-based counterpart, which specialises in software for industries such as power, mining, oil and gas, and food.
Numis analyst David Toms said the results were “ahead even of our indications”. Mr Toms called Aveva’s heritage arm, which is approximately half the size of Schneider’s operation on a revenue basis, a “standout” performer.
Meanwhile Aveva announced plans to save ?25m a year by 2020. Chief executive Craig Hayman said these would target “duplications” within the combined group.
Aveva
The merger has meant Aveva is left with multiple offices in locations around the world. For example, the company has three offices in Houston, which would be reviewed, Mr Hayman said.
The chief executive declined to comment on how many jobs across Aveva’s 4,400 global workforce would be lost as part of the cost-cutting exercise.
Aveva smashes City expectations after Schneider merger

Schneider Electric took a majority stake in Aveva as part of the pair's merger
“The integration of the business has begun in earnest,” he said, adding the last 12 months had been “transformational”.
“There is an accelerating, secular trend toward the digitalisation of industry and the combined group is uniquely placed to capture this opportunity,” he said.
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