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Aveva considers dividend amid Covid-19 crisis
16th Apr 2020 07:36
(Sharecast News) - Aveva said it was considering whether to pay a final dividend as the software company said it did not intend to lay off staff or make use of government relief programmes during the Covid-19 crisis.
The FTSE 100 company said it had a satisfactory close to the year that ended on 31 March despite economic disruption caused by the coronavirus pandemic. Annual revenue rose by about 9% and recurring revenue exceeded its target of 60% of total income.
Aveva said it expected lower growth in overall industrial software sales during the crisis but that it expected to grow at least in line with the wider market. In the first half of the current year spending cuts by oil and gas companies and will reduce revenue compared to target. Reduced economic output will cut demand for new licences, it said.
Aveva said it would hold off on making a decision about its final dividend. Almost a third of FTSE 100 companies have cut, delayed or scrapped their dividends to hold on to cash in the crisis.
"The expected length and depth of the global macro-economic disruption is unknown," the company said. "The board will therefore continue to monitor the situation and will make a decision on the FY20 final dividend as part of the full year results announcement, which is expected to be in early June 2020."
The company is freezing pay and recruitment and cutting discretionary spending during the crisis. Aveva said its business generated plenty of cash and that it had more than £110m of cash and no debt at the end of March with an undrawn credit facility in place until early 2023.
"At this point, Aveva does not intend to make staff reductions in response to the economic environment, furlough any staff, or make use of government support programmes," Aveva said. Employees below board and top executive levels are on full pay.
Aveva said Chairman Philip Aiken, Chief Executive Craig Hayman, other board members and top executives would donate 10% of their base salaries to the company's Action for Good social wellbeing programme for six months from the start of April.
The company stuck to its medium-term target of 30% margins for earnings before interest and tax but said progress may be slower than expected.
The FTSE 100 company said it had a satisfactory close to the year that ended on 31 March despite economic disruption caused by the coronavirus pandemic. Annual revenue rose by about 9% and recurring revenue exceeded its target of 60% of total income.
Aveva said it expected lower growth in overall industrial software sales during the crisis but that it expected to grow at least in line with the wider market. In the first half of the current year spending cuts by oil and gas companies and will reduce revenue compared to target. Reduced economic output will cut demand for new licences, it said.
Aveva said it would hold off on making a decision about its final dividend. Almost a third of FTSE 100 companies have cut, delayed or scrapped their dividends to hold on to cash in the crisis.
"The expected length and depth of the global macro-economic disruption is unknown," the company said. "The board will therefore continue to monitor the situation and will make a decision on the FY20 final dividend as part of the full year results announcement, which is expected to be in early June 2020."
The company is freezing pay and recruitment and cutting discretionary spending during the crisis. Aveva said its business generated plenty of cash and that it had more than £110m of cash and no debt at the end of March with an undrawn credit facility in place until early 2023.
"At this point, Aveva does not intend to make staff reductions in response to the economic environment, furlough any staff, or make use of government support programmes," Aveva said. Employees below board and top executive levels are on full pay.
Aveva said Chairman Philip Aiken, Chief Executive Craig Hayman, other board members and top executives would donate 10% of their base salaries to the company's Action for Good social wellbeing programme for six months from the start of April.
The company stuck to its medium-term target of 30% margins for earnings before interest and tax but said progress may be slower than expected.