Aveva Group (LSE:AVV) PLC announced increased losses for the first half due to costs associated with its combinations with the Schneider Electric industrial software business and OSIsoft.
Pre-tax losses in the six months to 30 September 2021 amounted to £80.3mln, compared with a loss of £24.2mln in the same period last year, the industrial software specialist said in its earnings release.
Revenue rose to £480.9mln from £332.6mln, with most of the 44.6% increase attributable to the $5bn acquisition of OSIsoft in March this year.
On a proforma basis, constant currency revenue grew by 9% to £516.1mln, driven by the heritage AVEVA business, which increased revenue by 5.8%, and the heritage OSIsoft business, which grew revenue 14.9%.
Proforma adjusted EBIT increased by 33.9% to £125.2mln.
Aveva raised its interim dividend 4.8% to 13.0p.
“End market conditions started to improve during the period following disruption caused by the COVID crisis,” said chief executive officer Peter Herweck.
“As a result, we are seeing the resumption of structural growth, driven by increased digitalisation and Net Zero projects, across a wide range of industry sectors. We are also observing an increase in activity in the Energy and Marine sectors as energy prices recover and demand for transportation increases.”
He added that the integration of the Aveva and OSIsoft businesses has progressed well, with both cost and revenue synergies starting to materialise as planned.
Aveva said it made good progress with its subscription transition. The heritage Aveva business achieved 16.2% growth in on-premise subscription revenue and 29.2% growth in Software as a Service (SaaS) revenue on a constant currency basis.
The heritage OSIsoft business did not have a material subscription or SaaS offering during the first half, although these have now been introduced and are expected to support future growth in annualised recurring revenue (ARR).
The company said it remains confident in its outlook and expects growth to continue in the final half of the financial year, supported by a good contract pipeline and improving market conditions.
Net debt stood at £533.6mln at the end of September, up from £367.9mln in March, reflecting the $900mln loan taken out to part finance the OSIsoft purchase.
Cash and treasury deposits totalled £136.6mln compared with £286.9mln.
Aveva shares opened 0.86% lower at 3,480.00p.