Aveva weighed down by hefty losses despite shift to subscription model
Aveva has failed to tame hefty losses despite boosting revenues as the technology firm shifts to a subscription model.
The British software specialist reported a pronounced growth in revenues in its half-year update, which grew 14.7 per cent year-on-year to £551.5m, up from £480.9m just 12 months ago.
However, losses from operations before tax remained high at £77.6m, above the £74.3m shortfall recorded last year.
The company was hit by higher costs than expected, particularly regarding research and development alongside distribution
Despite being in the red, Aveva revealed recurring revenue climbed 11.6 per cent to £876.2m, from £785.2m this time last year.
This was driven by subscription revenues which grew 23.2 per cent, with software-as-a-service revenue spiking 85.8 per cent.
Meanwhile, diluted loss per share was 26.52p, down from 27.07p.
Separately, French industrial group Schneider Electric confirmed it was still pursuing the full takeover of Aveva last week – but warned it make sense from both a financial and strategic perspective.
Chief Financial Officer Hilary Maxson said: “This is not an absolute must-do deal for us.”
He revealed the group could also opt to maintain its 59 per cent ownership.
The group announced in September it would proceed with the full takeover of the company – offering £31 per share in a deal valuing the whole company at around £9.48bn.