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AVEVA, which makes design software for heavy engineering applications like power stations and oil and gas installations, trades on a pricey 23 times earnings ratio. But Tempus in the Times still likes the stock. As the column points out, it is the world leader in what it does and the commodities sector is booming, while some of geographies definitely need more power stations, think India and China. Europe and the UK is expected to be slow for predictable reasons but with nuclear demand picking up post Japan tsunami, Tempus says buy on weakness.
"Geographically, we expect a continued strong performance in Latin America, a return to strong growth in China following the reorganisation and we are continuing to invest in developing a much larger organisation in India."
Commenting on the outlook, Chief Executive Richard Longdon said: "We expect growth in the oil and gas industry to continue apace along with our expanding presence in mining. "Power is set to provide a solid base of customers continuing to prepare for the growth in nuclear whilst marine is expected to remain
According to analysts at Jefferies, the results "confirm that AVEVA continues to benefit from strong demand in the oil and gas vertical, in turn supporting our double-digit organic growth estimate for FY13." Meanwhile, Merchant Securities said in a research note this morning that the figures were "surprisingly strong". Both brokers maintained their 'buy' recommendations for the stock. AVEVA pointed out that the biggest driver for growth has been marine-based oil and gas exploration, with "deep-water rig activity is at an all-time high".
AVEVA has been a notable success over the last five years and trades at a price to earnings ratio of 18 times (excluding cash). Some analysts have commented that these results needed to come in significantly ahead of expectations for the shares to rise given the already high valuation. They clearly did, with the stock up 12.2% at 1,661p in afternoon trade on Monday.
This company says the second half of the year was particularly strong, driven by organic growth of 15% over the same period in 2010/11. Adjusted profit before tax increased by 14% over the previous year to £62.3m, beating expectations of £60.94m. The adjusted profit margin was 32% (2011 - 31%) while adjusted basic earnings per share came in at 63.81p, again beating expectations of 63.55p.
The engineering software company, AVEVA, has reported record profits for the 12 months ended March 21st as the firm capitalised on growing demand from deep-water oil and gas exploration. AVEVA delivered revenue during the year of £195.9m, this was better than the consensus expectation of £192.04m and represented an increase of 13% against the prior year.
The acquisition brings with it 90 structural professionals who develop, distribute and support the Bocad products. Bocad has offices in Belgium, Germany, Malaysia, Canada and France and has a worldwide user base in Oil & Gas, Power, Marine and Fabrication markets.
According to AVEVA's statement: "the combination creates a unique end-to-end offering for engineering design, as well as adding best-in-class structural detailing functionality to the AVEVA Engineering & Design product portfolio."
Bocad provides a suite of applications for the design, detailing and assembly of structural steel and other materials, which AVEVA believes directly compliments its own 3D software. Richard Longdon, Chief Executive of AVEVA said: "This acquisition further extends AVEVA's position in the Engineering & Design market providing the most comprehensive 3D design software for plant and marine."
AVEVA, the engineering software provider, has acquired the Bocad group of companies, significantly strengthening its three-dimensional (3D) structural detailing capabilities for the plant, marine and fabrication markets. The €17.5m (£14m) purchase was made on a debt free/cash free basis which has been settled from existing cash resources.
Tempus does like the phenomenally successful Cambridge-based tech company Aveva, which makes software used to design oil rigs, ships and power stations. Strong performances in China, Latin America and Asia Pacific have offset concerns over its exposure to nuclear power. The shares trade on around 20 times forward earnings however so Tempus says only buy on weakness.
Engineering data and design information technology systems provider AVEVA put in a strong finish to the financial year just ended, driven by strong demand from the oil and gas industry. The Europe, Middle East and Africa (EMEA) region continued to perform strongly in the second half of the year, the group said, while the group's Latin American operations were once again the star performers in the Americas.
UBS downgrades from neutral to sell, target lifted from 1,400p to 1,550p.
Big buys after market close 18: 36 1,199,492 @ £17.00 = £20.39M
Feb 10 (Reuters) - Aveva Group PLC: * Goldman Sachs raises Aveva price target to 3,060P from 2,450P
Panmure Gordon has maintained its neutral position for Aveva, but acknowledges that the third quarter was positive and highlights an increasing momentum in China
Midas "buy" recommendation: http://www.dailymail.co.uk/money/experts/article-2058005/MIDAS-SHARE-TIPS-Data-storage-arm-opens-new-frontier-software-firm-Aveva.html
wotreally - yes one hopes so - I did notice but didnt change it as that was the direct quote - I didnt want to ammend in case thats what they meant - however yes the point is in the wrong place - isnt it ?
Richard Longdon, Chief Executive of AVEVA, said: "Following the change in our organisation to bring more focus on Enterprise Solutions, we are delighted to see further progress in this area with significant rates of growth in the first half. This progress, along with the continued strength in Latin America, means we approach the second half of the year well positioned and we expect to deliver the Board's expectations in the second half".
Trading Update AVEVA Group plc ("AVEVA"), one of the world's leading providers of engineering data and design IT systems, announces the following trading update for the six months ended 30 September 2011 as well as historic segmental disclosures relating to the Enterprise Solutions and Engineering and Design Systems divisions. Trading Update The Board is pleased to announce that AVEVA made good progress in the first half. The business has continued to perform well in Latin America, South Korea and Central and Eastern Europe with Oil and Gas continuing to be the main driver. In North America, we have continued to see weak demand for our Engineering and Design tools, while in China, as anticipated, the reorganisation announced earlier this year has had a short term impact on revenue in that region. There has been no significant change to the trends in the end user markets of Oil and Gas, Power or Marine during the first half with Oil and Gas continuing to perform strongly. In line with our development plans, we have continued to make good progress with Enterprise Solutions during the first half with revenue from that division substantially ahead of the same period last year. As planned, the cost base for the Enterprise Solutions division has increased as a result of the annualised effect of the investment made in 2010/11 together with the additional investments this year facilitating our revenue growth. As highlighted in the Interim Management Statement of 7 July 2011, we expected revenue to be more heavily weighted to the second half, primarily as a result of a reorganisation of our business in China which will allow us to better exploit the significant longer term opportunities in that market. Accordingly, adjusted profit before tax for the first half was slightly ahead of the same period in 2010. Once the benefits of the new China organisation are realised, we expect further momentum to be gained in the second half of the financial year.
http://www.investegate.co.uk/Article.aspx?id=201110140700121665Q
Decimal point wrong, I hope.
Aveva: Barclays downgrades to ‘underweight’ from ‘equalweight’; cuts target to 13p from 16.6p.
Aveva acquires laser scanning software company Date: Monday 03 Oct 2011 LONDON (ShareCast) - Engineering software group Aveva has announced the acquisition of Z+F UK, a UK software company which develops and markets laser scanning software for £6.3m. The company, a subsidiary of German outfit Z+F GmbH, will be acquired on a debt free/cash free basis, which has been satisfied from the company's existing cash resources. As part of the acquisition Z+F GmbH has also been granted a licence to continue to distribute the Z+F UK software together with Z+F GmbH's laser scanning hardware products. This initial licence has been granted free of royalty up to the value of the first £1 million of royalties over the next 5 years. Aveva said: "The acquisition brings a versatile software portfolio for the management of laser scanned data together with a team of people with significant domain experience in the laser scanning market." If Aveva's chief executive, Richard Congdon, is to be believed, however, then the chances of retaining the recently acquired UK personnel of Z+F are slim. According to a report in the Sunday Telegraph, Congdon has called on the government to scrap the top rate of tax, currently set at 50p for earnings greater than £150,000 a year. It is believed that the top rate affects around 300,000 high-earners in the UK. It is not known how many of those are programmers or software engineers. Congdon claims in one breath that many overseas employees are refusing to come to work in the UK because of the high tax rate and then in the next calls on the UK to lift the cap on immigration to Britain to make it easier for the flood of talent desperate to come and work in Britain, and contribute to the Exchequer's tax revenue. Congdon said he would consider moving the company to Hong Kong if conditions do not improve, the Sunday Telegraph reported. Shares of Aveva were down 29p to 1,378p in early trading on Monday.