Broker snap: Cash return possible at Aveva

25th Jan 2010 13:04

Broker Panmure Gordon thought it detected undertones of caution in the trading statement from engineering data and IT systems provider Aveva, along with the bullish comments about prospects in Brazil.'There is a hint of caution in the narrative with performance being "satisfactory" and "uncertainty" in underlying markets - this might lead to some profit taking,' suggests analyst George O'Connor.The broker has increased its forecast for adjusted profit before tax by £1.5m to £49.4m, to reflect recent currency moves. This feeds through to an increase in its earnings per share forecast from 49.3p to 50.9p. The broker sees an acquisition or a special dividend as possible near term share price catalysts. 'An acquisition is likely to be in the PLM [product lifecycle management] arena although technology acquisitions in plant should not be ruled out either. We expect that a special dividend is preferred to increasing the dividend,' the broker suggests. 'We consider that Aveva would like to keep c£40m in the business so the combined efforts could see c£100m being distributed,' O'Connor postulates. The broker has maintained its 'buy' recommendation and inched its price target up to 1143p from 1142p.