StockMarketWire.com - Engineering IT systems specialist AVEVA Group said it has not seen any noticeable shift in the trends reported in November and overall it has continued to perform well during the period.

The Group said it maintains a strong balance sheet and continues to see solid cash generation in the third quarter.

Geographic performance

Whilst the Americas region has continued to feel the effect of soft market conditions in Latin America, there has been further good progress in the United States and Canada, building on the success achieved in the first half. The Asia Pacific region continues to grow at a steady pace, with continued strength in South Korea more than offsetting the generally weaker economic conditions in China.

As highlighted at the time of the Interim Results, the EMEA region has been affected in the current financial year by the impact of the lower than expected revenue growth in Enterprise Solutions, as well as some continued weakness in Russia and the Middle East.

Currency

In the first half of the financial year the Group's revenue benefitted on a reported basis from sterling weakening against the Euro and Korean Won, partially offset by a strengthening against the Japanese Yen. However, in the second half sterling has strengthened significantly making a negative foreign exchange translation impact more likely for the full year.

Engineering & Design Systems (EDS)

The EDS business, which represents approximately 90% of Group revenue, has continued to perform well during the period, with good demand for design software and a number of strategic contract wins. AVEVA said it has entered into a new multi-year contract with one of the largest EPC contractors in the United States. Importantly, this deal changes the engagement model with this customer from project-specific to corporately-funded, thus allowing for easier access and faster adoption of AVEVA tools over time.

Despite a solid and growing pipeline, the ES business continues to be characterised by long sales cycles, and revenue continues to be affected by the issues noted at the time of the Interim Results.

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