AVEVA Group PLC (LON:AVV) has warned that a global economic downturn caused by the coronavirus pandemic may impact its first half revenues, particularly from its engineering business.
In a trading update, the industrial software group said expected reductions in capital expenditure, particularly in the oil & gas sector, meant engineering is expected to deliver “lower than previously targeted revenue”, while reduced gross domestic product (GDP) was expected to impact demand for new licences.
As a result of the expected slowdown, AVEVA said it is taking several actions to “manage its cost base appropriately” including pay and recruitment freezes and cuts to discretionary spending, although it said it does not intend to reduce employee numbers of furlough staff.
Meanwhile, the company said it had a “satisfactory close” to its financial year to 31 March despite the macro-economic disruption, with revenues expected to be up 9%.
However, given the disruption caused by the pandemic, AVEVA said it will not make a decision on its final dividend for its 2020 financial year until its full-year results announcement, expected to be in early June.
Shares in AVEVA were 1.8% higher at 3,562p in early deals on Thursday.