Numis reiterates 'add' on Aveva after first half results

8th Nov 2016 15:12

(ShareCast News) - Numis on Tuesday reiterated an 'add' rating on Aveva and a target price of 2,050p after the engineering software provider swung to a profit in the first half.In the six months to the end of September, the group made a pre-tax profit of £5.5m compared to a £800,000 loss the year before, as revenue edged up 3% to £84.3m. Aveva pointed out that in 2015, reported profit was hit by the professional adviser costs associated with the aborted transaction with Schneider Electric.As far as revenue is concerned, it said the weakening of the pound in the aftermath of the Brexit vote has had a favourable impact.Aveva lifted its interim dividend by 117% to 13p per share following the board's decision to re-weight the total dividend more heavily towards the interim dividend than in previous years.Numis said Aveva's first half was in line with expectations, helped by cost control and a strong currency tailwind."In our view Aveva remains a top quality business with some challenging end markets," Numis analysts David Toms and Will Wallis said."At some point the oil and gas headwinds will abate, revenue growth will return and we think margins could increase back to 33-35% (in line with the decade average) giving 100p+ of earnings per share and we think patient investors could see a 50% + share price rise. However, the timing of this remains impossible to predict."Shares dipped 0.28% to 1,774p at 1533 GMT.