Investec reiterates positive outlook for AVEVA

14th Jul 2014 11:13

Investec has repeated its 'buy' recommendation for engineering data and design IT systems group AVEVA, playing down concerns after the company said that full-year results will be weighted more towards the second half.AVEVA said that the strengthening of sterling against a number of currencies in territories in which AVEVA operates, which began in the second half of the previous financial year, has continued to have an "adverse impact".Meanwhile, the effect of timing and phasing of rental contracts, which tends to result in the majority of rental renewals occurring in the second half, will be "somewhat more pronounced" this year with revenues geared more towards the second half than in previous years.Investec said: "There has been no material change in the demand backdrop since the [annual results in March], where growth in the core business was strong. "This should give some comfort, but the second half-weighting comment due to deal timing could act as a modest dampener. However, this is due to deals that are becoming larger as customers are consuming more, which is a positive."The broker said it was keeping a positive stance on the stock based on AVEVA's exposure to its growth demand trends, which include offshore oil and gas, shale and large global engineering production and construction companies.A 2,800p target price has been retained for the shares.The stock was up 0.7% at 2,076p by 11:12, erasing an earlier fall.BC