Aveva shares plummet after H1 sales drop

12th Sep 2014 08:11

Engineering data and design IT systems group Aveva has revealed that it is reviewing its headcount growth plans and spending after a tough first half, in which revenues are expected to fall as much as 23%.The stock fell as much as 20% in early deals on Friday.The company said that interim results for the six months to 30 September will show a "material impact" from currency movements and the timing of certain rental renewals.Both factors will have a £14m hit on revenue, it said.Meanwhile, Aveva said that the now-completed "sales force reorganisation" announced in April, mixed levels of customer activity regionally and a reduction in demand in South America and parts of Asia have also had a temporary impact.As such, first-half revenues are expected to be around £84m-90m, compared with £108.5m the previous year, although the company warned that this is dependent on the timing of contract signings.Analysts at Liberum said that the current consensus forecast is £107m.Full-year results, as previously stated, will be more second-half weighted than in previous years due to the timing of renewals, while the benefits of its 'One Aveva' approach - which includes the simplification of its sales strategy - will only begin to accrue after the half-year mark."Furthermore, in light of the performance to date, we are reviewing our headcount growth plans and discretionary expenditure," it added.The shares were 19.5% lower at 1,745p by 08:28.