TIDMAVV

RNS Number : 8668R

AVEVA Group PLC

10 November 2021

AVEVA GROUP PLC

RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2021

Solid financial results, integration of OSIsoft on-track

AVEVA Group plc ('AVEVA' or 'the Group') announces its preliminary results for the six months ended 30 September 2021.

On 19 March 2021, the Group announced the completion of the acquisition of OSIsoft, LLC (OSIsoft) enhancing AVEVA's ability to accelerate the digital transformation of the industrial world.

The statutory results(1) are for the combined AVEVA and OSIsoft business in H1 FY22 and for AVEVA only for H1 FY21. To provide a better understanding of the combined comparative trading performance and to improve transparency, non-statutory results are also shown for the combined Group on a pro forma basis(2) .

We believe that the pro forma results give helpful insight into the performance of the Group and form a basis from which to consider the outlook.

Highlights

Combined AVEVA Group on a pro forma basis

-- On an organic constant currency basis(3) pro forma revenue for the combined Group grew 9.0% and adjusted EBIT(4) grew 33.9%; while adjust diluted EPS grew 13.3% and included the tax benefit from the OSIsoft acquisition.

-- Pro forma constant currency Annualised Recurring Revenue (ARR)(5) increased 9.2% to GBP711.4m (H1 FY21: GBP651.2m). The introduction of Subscription selling at OSIsoft will support growth in ARR going forward.

-- After the impact of FX translation headwinds, pro forma revenue grew by 0.8% to GBP516.1m (H1 FY21: GBP512.2m) and pro forma adjusted EBIT grew 20.5% to GBP125.2m (H1 FY21: GBP103.9m), representing a margin of 24.3% (H1 FY21: 20.3%).

-- Integration of the AVEVA and OSIsoft businesses has progressed well and the Board remains excited about the growth opportunities ahead.

Statutory results

-- Revenue was GBP480.9m after the impact of the deferred revenue haircut (H1 FY21: GBP332.6m), representing an increase of 44.6%, most of which was due to the acquisition of OSIsoft.

-- Loss from operations was GBP74.3m (H1 FY21: GBP23.2m) with the loss being primarily due to the amortisation of intangible assets of GBP115.8m (H1 FY21: GBP46.2m).

   --     Interim dividend is being increased 4.8% to 13.0p pence (H1 FY21: 12.4 pence). 

Chief Executive Officer, Peter Herweck said:

"AVEVA achieved a good first half performance, delivering a solid set of results and laying foundations for future growth. The integration of the AVEVA and OSIsoft businesses has progressed well, with both cost and revenue synergies starting to materialise as planned.

End market conditions started to improve during the period following disruption caused by the Covid crisis. 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.

We remain confident in the growth outlook and believe that our first half results form a strong foundation for us to build on and to meet our medium-term targets."

Summary results

 
 Combined AVEVA Group on a pro forma basis 
 Six months ended 30 September      2021        2020      Change   Organic constant 
                                                                       currency 
                                 ----------  ----------  -------  ----------------- 
 
 Revenue                          GBP516.1m   GBP512.2m    0.8%          9.0% 
                                 ----------  ----------  -------  ----------------- 
 Annualised recurring revenue     GBP711.4m   GBP651.2m     -            9.2% 
                                 ----------  ----------  -------  ----------------- 
 Adjusted EBIT                    GBP125.2m   GBP103.9m   20.5%         33.9% 
                                 ----------  ----------  -------  ----------------- 
 Adjusted diluted earnings 
  per share                        37.38p      32.98p     13.3%           - 
                                 ----------  ----------  -------  ----------------- 
 
 
 AVEVA Group plc statutory results 
 Six months ended 30 September      2021        2020      Change   Constant 
                                                                    currency 
                                 ----------  ----------  -------  ---------- 
 
 Revenue                          GBP480.9m   GBP332.6m   44.6%      55.8% 
                                 ----------  ----------  -------  ---------- 
 Loss from operations             GBP74.3m    GBP23.2m    220.3%       - 
                                 ----------  ----------  -------  ---------- 
 Basic earnings per share         (27.07)p    (10.11)p      -          - 
                                 ----------  ----------  -------  ---------- 
 Diluted earnings per share       (27.07)p    (10.11)p      -          - 
                                 ----------  ----------  -------  ---------- 
 

Notes

(1) Statutory results include the results for the combined AVEVA Group for the 6 months to 30 September 2021 compared to the results of the standalone AVEVA business only for the 6 months to 30 September 2020. EPS in the prior period has been adjusted for a Bonus Factor of 0.8 to reflect the Bonus element of the November 2020 Rights Issue.

(2) Pro forma results include results for both AVEVA and OSIsoft for the 6 months to 30 September 2021 and the 6 months to 30 September 2020. In addition to this, the results have been adjusted to exclude the effect of the deferred revenue haircut under IFRS 3 (Business Combinations), which reduces current year statutory revenue.

(3) Organic constant currency revenue excludes a currency translation reduction of GBP40.8 million; and adjusts for the disposals of the Acquis Software, Termis Software and Water Loss Management Software businesses in June 2021 by removing the results of the disposals from each reporting period.

(4) Adjusted metrics are calculated before amortisation of intangible assets (excluding other software), share-based payments, gain/loss on fair value of forward foreign exchange contracts and exceptional items. Adjusted Earnings Per Share also includes the tax effects of these adjustments.

(5) ARR makes it easier to track recurring revenue progression by annualising revenue associated with Subscription, Cloud and Maintenance contracts . It removes distortions caused by revenue recognition standards by annualising the revenue associated with contracts at a point in time. It is calculated on a constant currency basis.

Enquiries:

AVEVA Group plc

Matt Springett, Head of Investor Relations Tel: 07789 818 684

FTI Consulting LLP

Edward Bridges / Dwight Burden Tel: 0203 727 1017

Conference call details

AVEVA will host a conference call for registered participants, at 10.00 (GMT) today. A replay of the call will be made available later in the day. Conference calls dial in details: UK: 020 3936 2999, USA: 1 646 664 1960, all other locations: +44 203 936 2999. Conference call code: 527762.

Chief Executive's review

Summary

AVEVA had a solid first half of the financial year. The Group delivered a good financial performance and made significant operational progress in integrating OSIsoft, which was acquired just before the start of the period.

On a statutory basis, revenue for the period was GBP480.9 million which was 44.6% higher compared with the previous year (H1 FY21: GBP 332.6 million). This change was due to the inclusion of OSIsoft in H1 FY21 and growth in the business, partly offset by negative FX translation due to the relative strengthening of Sterling, particularly in relation to the US Dollar.

Pro forma organic constant currency revenue grew by 9.0% and proforma adjusted EBIT increased 33.9% on the same basis. The revenue growth was driven by both the heritage AVEVA business, which increased revenue by 5.8% on an organic constant currency basis and the heritage OSIsoft business, which grew revenue by 14.9% on the same basis. The increase in adjusted EBIT was a result of the revenue growth and a slower increase in overall costs, which resulted in positive margin leverage.

On a reported pro forma basis (i.e. not adjusted for currency translation), Group revenue grew by 0.8% to GBP516.1 million (H1 FY21: GBP512.2 million). On the same basis, adjusted EBIT grew by 20.5% to GBP125.2 million (H1 FY21: GBP103.9 million). This reduction versus organic constant currency growth was largely due to the relative strength of the Group's reporting currency Sterling, versus the US Dollar, given that the majority of AVEVA's sales are made in US Dollars.

Integration

The integration of OSIsoft progressed well, in accordance with AVEVA's plans. The organisational model has been established and leadership roles determined.

AVEVA is on-track to achieve both cost and revenue synergies in-line with its acquisition model. Pre-tax cash cost synergies are expected of not less than $30 million per annum on a run rate basis by the year ending 31 March 2023. Revenue synergies of at least $100 million per annum are expected by the year ending 31 March 2026.

Progress toward achieving cost synergies includes the establishment of plans for removing duplication in office facilities, marketing, and IT. All of the cost synergies have been sized and have target delivery dates established. It is expected that most of the office duplication will be removed by the end of the current financial year.

Work towards achieving revenue synergies is also well established. The sales operating model has been determined and incentives have been put in place to drive product portfolio cross selling. The first cross sell synergy contracts have been closed through the direct sales force, the AVEVA partner channel and Schneider Electric.

The R&D organisation has been integrated and has accelerated work on the product portfolio roadmap to achieve interoperability between products to add greater value to customers. Good progress has been made, for example in integrating Data Hub and AVEVA Connect. Other major product integrations are underway, including integrating AVEVA Unified Operation Centre and AVEVA Advance Analytics with the PI System and will be launched in calendar year 2022.

Subscription transition

AVEVA also 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 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 ARR.

AVEVA made significant progress in developing its Cloud business. Key products were launched on the Group's SaaS platform, AVEVA Connect. These included Unified Engineering, Unified Operations Control and Unified Supply Chain.

While absolute revenue from SaaS products was relatively small due to a low starting base, order wins by contract value were more than double revenue. Sales of Engineering products drove growth in the first half. This is expected to continue, while being increasingly augmented by sales of Operations products as customers choose to move towards a hybrid Cloud deployment model.

AVEVA won a substantial number of new logos during the first half including Kairos Power and T é cnicas Reunidas .

In the context of having not yet launched a Subscription offering, the growth that OSIsoft achieved did not make a full contribution to growth in ARR for the Group during the first half. Notwithstanding this, period end ARR for the combined AVEVA Group was GBP711.4 million (30 September 2020: GBP651.2 million). This represented a 12 month increase of 9.2% on a pro forma constant currency basis. This growth was driven by the heritage AVEVA business, which increased ARR by 10.5%, while OSIsoft increased ARR by 6.8%.

Pro forma regional performance

AVEVA is managed on a regional basis.

EMEA revenue was GBP172.2 million, representing a decrease of 3.6% (H1 FY21: GBP178.6 million) due to the impact of FX translation. On an organic constant currency basis, sales grew 3.5%. AVEVA achieved good growth in Eastern Europe and the Middle East in particular. On a product basis, Engineering, Asset Performance and Data Management achieved good growth.

Americas revenue grew by 1.8% to GBP225.3 million (H1 FY21: GBP221.3 million) due to the impact of FX translation. On an organic constant currency basis, sales grew 10.6%. The growth was broad based with all regions delivering a good performance. All business areas showed a year-on-year improvement, with growth being led by Monitoring & Control and Information Management.

Asia Pacific revenue was GBP118.6 million, representing an increase of 5.6% (H1 FY21: GBP112.3 million). On an organic constant currency basis, sales increased 14.5% with growth being led by a recovery in China. On a product basis, Planning & Operations, Monitoring & Control and Data Management achieved good growth.

Business units

Following the acquisition of OSIsoft, AVEVA has been organised into two business units: Engineering and Operations.

Engineering consists of Engineering and Simulation software. In turn, Engineering software includes Engineering & Design, Project Execution and Engineering Information Management. Simulation includes Simulation & Learning and Value Chain Optimisation.

Engineering contributed 29.9% of pro forma revenue in the period. On an organic constant currency basis, revenue increased by 6.2% .

AVEVA saw good demand for Engineering Information Management, Simulation & Learning and Value Chain Optimisation in particular.

End market conditions started to improve during the period following disruption caused by the Covid crisis. AVEVA's Engineering, Procurement and Construction (EPC) customers began to recover as both Net Zero projects and an improving general pipeline of greenfield asset construction projects started to build.

AVEVA's Owner Operator customers continued to drive their digital twin strategies, deploying the Engineering Information Management portfolio, with new customer wins at PTT and a leading semiconductor chip manufacturer.

Owner Operators also continued to drive carbon emission reduction programs across their integrated assets with our Value Chain Optimization portfolio, with new customer wins at Indian Oil and LyondellBasell.

In terms of end markets, there was an increase in orders from the Oil & Gas and Marine sector as energy prices recovered and demand for transportation increased. For example, AVEVA saw order wins with International Maritime Industries and Sinopec Engineering. Demand from the Chemicals market also grew as customers drove their circular economy agendas. Key wins came from Dupont and Beijing Petro Chemicals.

Operations consists of Asset Performance, Monitoring & Control and Information Management. In turn, Asset Performance consists of Asset Performance Management and Manufacturing Executions Systems software. Monitoring & Control includes HMI SCADA, Enterprise Visualisation and Pipeline Management software. Information Management consists of the recently acquired OSIsoft business.

Operations contributed 70.1% of pro forma revenue in the period. On an organic constant currency basis, revenue increased 10.2 %.

End market conditions improved versus the previous financial year, allowing for the resumption of structural growth driven by increased digitalisation across a wide range of industry sectors, with notable wins in Power, Mining, Consumer Packaged Goods and Energy.

Asset Performance Management delivered a strong performance, with growth in Energy and Utilities. For example, the Group achieved a recent large order win in Asset Performance Management with Saudi Aramco.

Monitoring & Control delivered good growth, while continuing the transition to a Subscription-based recuring revenue model. Again, AVEVA saw good wins in the Energy and Infrastructure sectors.

In Information Management, the OSIsoft business performed strongly and continued to win significant new business, for example in the Mining market with Vale.

Outlook

The Board remains confident in the outlook for AVEVA. Growth is expected to continue in the second half of the financial year on an organic constant currency basis, supported by a good contract pipeline and improving market conditions as economies recover from the Covid crisis.

Growth in AVEVA's ARR is expected to increase as Subscription offers are introduced for products from the acquired OSIsoft business and the proportion of SaaS sales rises.

Finance review

Overview

On 25 August 2020, AVEVA announced that it had reached agreement to acquire OSIsoft at an enterprise value of $5.0 billion . The transaction subsequently completed on 19 March 2021 and therefore the statutory results compare the performance of the combined AVEVA and OSIsoft business in H1 FY22 with the standalone AVEVA business in H1 FY21.

The finance review begins with a commentary of those statutory results and then covers pro forma results to show the underlying performance of the combined business.

Statutory results

On a statutory basis, revenue for the period was GBP480.9 million which was 44.6% higher compared with the previous year (H1 FY21: GBP 332.6 million). This change was due to the inclusion of OSIsoft in H1 FY21 and growth in the business, partly offset by negative FX translation due to the relative strengthening of Sterling, particularly in relation to the Dollar.

Subscription revenue, which includes rental contracts and Cloud contracts, grew 17.7% to GBP134.1 million (H1 FY21: GBP113.9 million), primarily due to the growth in the heritage AVEVA business.

Maintenance revenue grew by 63.4% to GBP162.7 million (H1 FY21: GBP99.6 million), primarily due to the inclusion of OSIsoft in H1 FY21.

Perpetual licences grew 106.8% to GBP127.6 million (H1 FY21: GBP61.7 million), primarily due to the inclusion of OSIsoft in H1 FY21 and growth in the OSIsoft business.

Services revenue declined 1.6% to GBP56.5 million (H1 FY21: GBP57.4 million) due to a focus on higher margin software revenue.

Total statutory costs increased to GBP555.2 million (H1 FY21: GBP355.8 million). This increase was due to the acquisition of OSIsoft and the cost of sale, operating cost and amortisation of intangible assets associated with this.

The Group made a loss before tax of GBP80.3 million (H1 FY21: GBP24.2 million). This was due to the amortisation of intangible assets relating to AVEVA's combinations with the Schneider Electric industrial software business and OSIsoft.

Basic loss per share was (27.07)p (H1 FY21: (10.11)p and diluted earnings per share were (27.07)p (H1 FY21: (10.11)p).

The statutory tax charge was GBP1.2 million (H1 FY21: credit of GBP3.9 million).

Dividends

An interim dividend of 13.0 pence will be payable on 4 February 2022 to shareholders on the register on 7 January 2022. This represents an increase of 4.8% versus the prior year interim dividend (H1 FY21: 12.4 pence).

Operating cash flow

Cash generated from operating activities before tax was GBP(14.4) million, compared to GBP23.7 million generated in the previous year.

This negative amount was due to cash paid in the period in relation to the acquisition of OSIsoft of GBP65.5 million and other exceptional items of GBP17.8 million (H1 FY21: GBP31.1 million).

In addition to this, first half cash flow is impacted by the payment of bonus and sales commissions from the previous financial year, which in H1 FY22 included those related to OSIsoft.

Balance sheet

On 30 September 2021, AVEVA had net debt of GBP533.6 million (31 March 2021: GBP367.9 million). This reflects the $900 million term loan taken out to part finance the acquisition of OSIsoft, together with cash and treasury deposits of GBP136.6 million (31 March 2021: GBP286.9 million). The change in cash and treasury deposits mainly reflects GBP65.5 million paid in relation to the OSIsoft acquisition since the year end and dividend payments of GBP70.8 million. The remainder of the change in net debt in Sterling terms relates to currency translation.

Non-current assets were GBP5.7 billion (31 March 2021: GBP5.8 billion), reflecting goodwill and intangible assets that arose from the combination with the Schneider Electric industrial software business and the OSIsoft acquisition. Goodwill and intangible assets were GBP5.5 billion (31 March 2021: GBP5.6 billion).

Trade and other receivables were GBP266.5 million (31 March 2021: GBP317.0 million). Contract assets increased to GBP241.2 million from GBP215.6 million at 31 March 2021. This increase included the impact of new contract wins and a release of a forward-looking provision held against contract assets.

Contract liabilities were GBP232.5 million (31 March 2021: GBP239.7 million), reflecting a higher billing profile in the second half.

Pro forma results

The pro forma results are summarised below:

 
                                                         Organic constant 
 GBPm                      H1 FY22   H1 FY21    Change           currency 
 
 Revenue                     516.1     512.2      0.8%               9.0% 
 Cost of sales             (106.6)   (110.2)    (3.3)%               3.1% 
------------------------  --------  --------  --------  ----------------- 
 Gross profit                409.5     402.0      1.9%              10.6% 
 Operating expenses        (284.3)   (298.1)    (4.6)%               2.6% 
------------------------  --------  --------  --------  ----------------- 
 Adjusted EBIT               125.2     103.9     20.5%              33.9% 
 Net interest                (6.0)     (9.3)   (35.5)%                  - 
------------------------  --------  --------  --------  ----------------- 
 Adjusted profit before 
  tax                        119.2      94.6     26.0%                  - 
 Tax charge (charge) 
  / credit                   (6.0)       5.1         -                  - 
------------------------  --------  --------  --------  ----------------- 
 Adjusted profit after 
  tax                        113.2      99.7     13.5%                  - 
 
 Adjusted diluted EPS 
  (pence)                   37.38p    32.98p     13.3%                  - 
 Gross margin                79.3%     78.5%    +80bps             +10bps 
 Adjusted EBIT margin        24.3%     20.3%   +400bps            +460bps 
 Tax charge                 (5.0)%      5.4%         -                  - 
 

Pro forma results include results for both AVEVA and OSIsoft for the 6 months to 30 September 2021 and the 6 months to 30 September 2020. In addition to this, the results have been adjusted to exclude the effect of the deferred revenue haircut under IFRS 3 (Business Combinations).

Adjusted metrics are calculated before amortisation of intangible assets (excluding other software), share-based payments, gain/loss on fair value of forward foreign exchange contracts and exceptional items. Adjusted Earnings Per Share also includes the tax effects of these adjustments.

Pro forma revenue

Revenue was GBP516.1 million, representing an increase of 0.8% (H1 FY21: GBP512.2 million). Organic constant currency revenue grew 9.0%, adjusted for a currency translation headwind of GBP40.8 million and minor disposals in the current year.

The revenue mix for the combined Group is shown below:

 
                                                             Organic 
                                                            constant 
                                                Reported    currency       % of H1 
 GBPm                       H1 FY22   H1 FY21     change      change    FY22 total 
 Subscription                 134.3     123.7       8.6%       15.2%         26.0% 
 Maintenance                  197.5     209.5     (5.7)%       2.5 %         38.3% 
                           --------  --------  ---------  ----------  ------------ 
 Total recurring revenue      331.8     333.2     (0.4)%        7.2%         64.3% 
 Perpetual licences           127.8     119.8       6.7%       17.6%         24.8% 
 Services                      56.5      59.2     (4.6)%        1.5%         10.9% 
                           --------  --------  ---------  ----------  ------------ 
 Total                        516.1     512.2       0.8%        9.0%          100% 
                           --------  --------  ---------  ----------  ------------ 
 

Subscription revenue grew by 8.6% to GBP 134.3 million (H1 FY21: GBP123.7 million). On an organic constant currency basis the increase was 15.2%. This was driven by growth in sales of Subscription revenue within the heritage AVEVA business as the transition to a recuring revenue model continued.

Maintenance revenue declined by 5.7% to GBP197.5 million (H1 FY21: GBP209.5 million). On an organic constant currency basis there was an increase of 2.5%. This was driven by growth in Maintenance revenue associated with the growth of the OSIsoft business, which more than offset a decline in Maintenance revenue at the heritage AVEVA business due to the planned Subscription transition.

Perpetual licence revenue grew by 6.7% to GBP127.8 million (H1 FY21: GBP119.8 million). On an organic constant currency basis the increase was 17.6%. This was driven by strong growth from the heritage OSIsoft business, which had not yet moved to a Subscription offering in the first half.

Services revenue declined by 4.6% to GBP56.5million (H1 FY21: GBP59.2 million). On an organic constant currency basis the increase was 1.5%. This was driven by growth in the overall business, partly offset by a focus on higher margin software revenue.

Pro forma costs

An analysis of total expenses is summarised below. Overall, operating costs were a little behind AVEVA's plan, largely due to a tight labour market causing some delay in new hires.

 
                                                                               Net impairment 
                                                                                  gain / loss 
                              Cost of                      Selling             from financial 
 GBPm                           sales      R&D    and distribution   Admin.            assets    Total 
 Adjusted costs                 106.6     80.9               123.1     84.4             (4.1)    390.9 
 
 H1 FY21                        110.2     89.3               130.1     77.8               0.9    408.3 
 Change                        (3.3)%   (9.4)%              (5.4)%     8.5%                 -   (4.3)% 
 Organic constant currency       3.1%   (3.0)%                0.9%    17.9%                 -    2.7 % 
 

Cost of sales decreased by 3.3% to GBP106.6 million (H1 FY21: GBP110.2 million). This decrease was due to FX translation. On a constant currency basis the increase was 3.1%. This was largely due to higher SaaS hosting costs.

Research & Development costs were GBP80.9 million (H1 FY21: GBP 89.3 million), representing a decrease of 9.4%. On a constant currency basis the decrease was 3.0%. This was due a slight increase in employment costs more than offset by reductions in consultancy, IT costs and some delayed recruiting.

Selling and distribution expenses were GBP123.1 million (H1 FY21: GBP130.1 million), representing a decrease of 5.4%. On a constant currency basis the increase was 0.9%. The relatively flat costs represented inflation and higher run-rate costs entering the year offset by some savings on the timing of backfilling open positions.

Administrative expenses were GBP84.4 million (H1 FY21: GBP77.8 million), representing a increase of 8.5%. On a constant currency basis the increase was 17.9%. This was driven by higher costs in IT, finance and HR, due to increases in capacity being needed as the business scales.

Net impairment loss from financial assets represents the impairment of accounts receivable and contract assets. During the period there was a credit following a review of forward-looking provisions against contract assets. This reversal of provisions led to a positive figure of GBP4.1 million (FY20: negative GBP0.9 million).

Pro forma adjusted EBIT

Adjusted EBIT increased by 20.5% to GBP125.2 million (H1 FY21: GBP103.9 million). This resulted in an adjusted EBIT margin of 24.3 % (H1 FY21: 20.3%).

Pro forma net interest charge

The combined pro forma interest charge assumes that the $900 million term loan was drawn down on 1 April 2020 and therefore a full year's interest is charged in each period. Total net interest was GBP6.0 million (H1 FY21: GBP9.3 million). The year-on-year reduction was largely due to lower LIBOR rates.

Pro forma taxation

The pro forma tax charge on adjusted profit before tax was GBP6.0 million (H1 FY21: credit of GBP5.1 million), which equates to an effective tax rate of 5.0% (H1 FY21: 5.4% credit). This tax charge factors in the benefit of UK and US tax incentives on intellectual property and the tax step-up relating to the acquisition of OSIsoft. Although the first half tax rate percentage is lower than the expected full year rate because while the tax deduction relating to the acquisition of OSIsoft accrues evenly over time, first half profits are typically lower than second half profits; we expect these factors to continue to benefit AVEVA's tax rate. On a full year basis, the expected tax rate on adjusted profit before tax is expected to be less than 10%.

Pro forma earnings per share

Pro forma diluted adjusted EPS increased by 13.3% to 37.38 pence (H1 FY21: 32.98 pence) as a result of the higher adjusted EBIT and a tax credit in the prior year.

Normalised and exceptional items

The normalised and exceptional items below have been excluded in presenting the adjusted results.

 
 
 GBPm                                   H1 FY22   H1 FY21 
 Acquisition costs                          0.7      16.3 
 Integration and restructuring 
  activities                               15.8      15.8 
 Other expense/(income)                    17.7     (3.1) 
 Total exceptional items                   34.2      29.0 
-------------------------------------  --------  -------- 
 
 Amortisation (excl. other software)      115.7      45.8 
 Share-based payments                      14.1       4.6 
 Loss on FX contracts                       0.3       0.1 
-------------------------------------  --------  -------- 
 Total normalised items                   130.1      50.5 
-------------------------------------  --------  -------- 
 

Acquisition and integration activities primarily related to consultancy fees paid to advisers and the costs of additional temporary resources due to the combination with OSIsoft, together with IT and systems integration.

Other expense relates to capital expenditure reimbursements from Schneider Electric in H1 FY21 and in H1 FY22, impairment relating to the decision to retire AVEVA steel fabrication software and a loss on the sale of assets (see Note 8 for further details).

Amortisation relates to the amortisation of the fair valued heritage AVEVA intangible assets under acquisition accounting, following the combination with the Schneider Electric industrial software business and the amortisation of intangibles relating to the OSIsoft acquisition. Of the GBP115.7m amortisation charge, GBP72.7m relates to the intangibles acquired through the OSIsoft acquisition.

Independent Review Report to AVEVA Group plc

Conclusion

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2021 which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Consolidated Statement of Changes in Shareholders' Equity, the Consolidated Cash Flow Statement and the related notes 1 to 17. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2021 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 2, the annual financial statements of the Group will be prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting'.

Responsibilities of the directors

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Auditor's responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion is based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Ernst & Young LLP

Birmingham

9 November 2021

Consolidated Income Statement

for the six months ended 30 September 2021

 
                                                          Six months ended          Year ended 
                                                            30 September              31 March 
                                                     -------------------------- 
                                                             2021          2020         2021 
                                                             GBPm          GBPm         GBPm 
                                              Notes   (unaudited)   (unaudited)    (audited) 
-------------------------------------------  ------  ------------  ------------  ----------- 
 Revenue                                        5           480.9         332.6        820.4 
 Cost of sales                                            (106.7)        (83.9)      (181.3) 
-------------------------------------------  ------  ------------  ------------  ----------- 
 Gross profit                                               374.2         248.7        639.1 
 Operating expenses 
 Research & Development costs                             (164.9)        (92.7)      (184.5) 
 Selling and administrative expenses            7         (270.0)       (181.5)      (419.8) 
 Net impairment gain/(loss) on financial 
  assets                                                      4.1         (0.8)        (3.7) 
 Other (expense)/income                         8          (17.7)           3.1          5.5 
 Total operating expenses                                 (448.5)       (271.9)      (602.5) 
-------------------------------------------  ------  ------------  ------------  ----------- 
 (Loss)/profit from operations                             (74.3)        (23.2)         36.6 
 Finance revenue                                              0.7           0.1          0.6 
 Finance expense                                            (6.7)         (1.1)        (3.0) 
-------------------------------------------  ------  ------------  ------------  ----------- 
 (Loss)/profit before tax from continuing 
  operations                                               (80.3)        (24.2)         34.2 
 Income tax (expense)/credit                    9           (1.2)           3.9        (9.4) 
-------------------------------------------  ------  ------------  ------------  ----------- 
 (Loss)/profit for the period attributable 
  to equity holders of the parent                          (81.5)        (20.3)         24.8 
-------------------------------------------  ------  ------------  ------------  ----------- 
 
 
 (Loss)/profit from operations                 (74.3)   (23.2)    36.6 
 Amortisation of intangibles (excluding 
  other software)                               115.7     45.8    95.7 
 Share-based payments                            14.1      4.6    16.3 
 Loss/(gain) on fair value of forward 
  foreign exchange contracts                      0.3      0.1   (0.7) 
 Exceptional items                         8     34.2     29.0    78.5 
----------------------------------------      -------  -------  ------ 
 Adjusted EBIT                                   90.0     56.3   226.4 
----------------------------------------      -------  -------  ------ 
 
 
 (Loss)/earnings per share (pence) 
 - basic                              11   (27.07)   (10.11)   11.35 
 - diluted                            11   (27.07)   (10.11)   11.27 
-----------------------------------  ---  --------  --------  ------ 
 

All activities relate to continuing activities.

Consolidated Statement of Comprehensive Income

for the six months ended 30 September 2021

 
                                                          Six months ended        Year ended 
                                                            30 September            31 March 
                                                     -------------------------- 
                                                             2021          2020         2021 
                                                             GBPm          GBPm         GBPm 
                                                      (unaudited)   (unaudited)    (audited) 
---------------------------------------------------  ------------  ------------  ----------- 
 (Loss)/profit for the period                              (81.5)        (20.3)         24.8 
 Items that may be reclassified to profit or 
  loss in subsequent periods : 
 Exchange gain/(loss) arising on translation 
  of foreign operations                                      80.9         (4.5)         20.7 
 Total of items that may be reclassified to 
  profit or loss in subsequent periods:                      80.9         (4.5)         20.7 
---------------------------------------------------  ------------  ------------  ----------- 
 Items that will not be reclassified to profit 
  or loss in subsequent periods: 
 Remeasurement gain/(loss) on defined benefit 
  plans                                                       1.9         (4.4)        (2.5) 
 Deferred tax effect                                        (1.1)           0.8          0.5 
---------------------------------------------------  ------------  ------------  ----------- 
 Total of items that will not be reclassified 
  to profit or loss in subsequent periods                     0.8         (3.6)        (2.0) 
---------------------------------------------------  ------------  ------------  ----------- 
 Total comprehensive income/(loss) for the period, 
  net of tax                                                  0.2        (28.4)         43.5 
---------------------------------------------------  ------------  ------------  ----------- 
 

Consolidated Balance Sheet

30 September 2021

 
                                                   As at           As at       As at 
                                            30 September    30 September    31 March 
                                                    2021            2020        2021 
                                                    GBPm            GBPm        GBPm 
                                   Notes     (unaudited)     (unaudited)   (audited) 
--------------------------------  ------  --------------  --------------  ---------- 
 Non-current assets 
 Goodwill                                        3,955.0         1,294.6     3,904.1 
 Other intangible assets                         1,558.3           467.1     1,662.3 
 Property, plant and equipment                      46.0            29.0        48.5 
 Right-of-use assets                               102.2            73.3       111.9 
 Deferred tax assets                                38.4            13.6        21.4 
 Trade and other receivables        13              16.0            22.7        19.4 
 Customer acquisition costs                          2.4               -         0.3 
 Investments                                         0.4               -         0.4 
 Retirement benefit surplus                         15.1            10.9        13.1 
                                                 5,733.8         1,911.2     5,781.4 
--------------------------------  ------  --------------  --------------  ---------- 
 Current assets 
 Trade and other receivables        13             266.5           185.1       317.0 
 Contract assets                                   241.2           159.5       215.6 
 Treasury deposits                                   0.3             0.1         0.3 
 Cash and cash equivalents                         136.3            79.8       286.6 
 Restricted cash                                     7.3               -         7.3 
 Financial assets                                    0.4               -         0.7 
 Current tax assets                                 18.1            27.5        18.9 
                                                   670.1           452.0       846.4 
--------------------------------  ------  --------------  --------------  ---------- 
 Total assets                                    6,403.9         2,363.2     6,627.8 
--------------------------------  ------  --------------  --------------  ---------- 
 Equity 
 Issued share capital                               10.7             5.7        10.7 
 Share premium                      15           2,842.1           574.5     3,842.1 
 Other reserves                                  1,292.4         1,180.7     1,209.6 
 Retained earnings                  15             991.6           111.8       130.3 
--------------------------------  ------  --------------  --------------  ---------- 
 Total equity                                    5,136.8         1,872.7     5,192.7 
--------------------------------  ------  --------------  --------------  ---------- 
 Current liabilities 
 Trade and other payables           14             140.9           134.3       271.3 
 Contract liabilities                              232.5           132.9       239.7 
 Loans and borrowings                                  -            20.0           - 
 Lease liabilities                                  20.6            15.5        22.9 
 Financial liabilities                                 -             0.5           - 
 Current tax liabilities                            10.9             1.1        45.6 
--------------------------------  ------  --------------  --------------  ---------- 
                                                   404.9           304.3       579.5 
--------------------------------  ------  --------------  --------------  ---------- 
 Non-current liabilities 
 Loans and borrowings               16             669.5               -       654.0 
 Lease liabilities                                  81.8            48.7        88.9 
 Deferred tax liabilities                           81.4           104.6        82.0 
 Other liabilities                  14              15.5            20.9        18.2 
 Retirement benefit obligations                     14.0            12.0        12.5 
--------------------------------  ------  --------------  --------------  ---------- 
                                                   862.2           186.2       855.6 
--------------------------------  ------  --------------  --------------  ---------- 
 Total equity and liabilities                    6,403.9         2,363.2     6,627.8 
--------------------------------  ------  --------------  --------------  ---------- 
 

Consolidated Statement of Changes in Shareholders' Equity

30 September 2021

 
                                                              Other reserves 
                                                 --------------------------------------- 
                                                   Cumulative      Capital       Reverse                 Total 
                    Share       Share    Merger   translation   redemption   acquisition   Treasury      other   Retained     Total 
                  capital     premium   reserve   adjustments      reserve       reserve     shares   reserves   earnings    equity 
                     GBPm        GBPm      GBPm          GBPm         GBPm          GBPm       GBPm       GBPm       GBPm      GBPm 
---------------  --------  ----------  --------  ------------  -----------  ------------  ---------  ---------  ---------  -------- 
 At 1 April 
  2020 
  (audited)           5.7       574.5     615.6          22.6        101.7         452.5     (12.1)    1,180.3      181.2   1,941.7 
 Loss for the 
  period                -           -         -             -            -             -          -          -     (20.3)    (20.3) 
 Other 
  comprehensive 
  loss                  -           -         -         (4.5)            -             -          -      (4.5)      (3.6)     (8.1) 
---------------  --------  ----------  --------  ------------  -----------  ------------  ---------  ---------  ---------  -------- 
 Total 
  comprehensive 
  loss                  -           -         -         (4.5)            -             -          -      (4.5)     (23.9)    (28.4) 
 Share-based 
  payments              -           -         -             -            -             -          -          -        4.6       4.6 
 Tax arising on 
  share-based 
  payments              -           -         -             -            -             -          -          -        2.7       2.7 
 Investment in 
  own 
  shares                -           -         -             -            -             -      (1.1)      (1.1)          -     (1.1) 
 Cost of 
  employee 
  benefit trust 
  shares 
  issued to 
  employees             -           -         -             -            -             -        6.0        6.0      (6.0)         - 
 Equity 
  dividends             -           -         -             -            -             -          -          -     (46.8)    (46.8) 
---------------  --------  ----------  --------  ------------  -----------  ------------  ---------  ---------  ---------  -------- 
 At 30 
  September 
  2020 
  (unaudited)         5.7       574.5     615.6          18.1        101.7         452.5      (7.2)    1,180.7      111.8   1,872.7 
 Profit for the 
  period                -           -         -             -            -             -          -          -       45.1      45.1 
 Other 
  comprehensive 
  income                -           -         -          25.2            -             -          -       25.2        1.6      26.8 
---------------  --------  ----------  --------  ------------  -----------  ------------  ---------  ---------  ---------  -------- 
 Total 
  comprehensive 
  income                -           -         -          25.2            -             -          -       25.2       46.7      71.9 
 Issue of new 
  shares              0.5       465.2         -             -            -             -          -          -          -     465.7 
 Rights issue         4.5     2,831.0         -             -            -             -          -          -          -   2,835.5 
 Transaction 
  costs 
  relating to 
  issue 
  of share 
  capital               -      (28.6)         -             -            -             -          -          -          -    (28.6) 
 Share-based 
  payments              -           -         -             -            -             -          -          -       11.7      11.7 
 Tax arising on 
  share-based 
  payments              -           -         -             -            -             -          -          -      (0.6)     (0.6) 
 Cost of 
  employee 
  benefit trust 
  shares 
  issued to 
  employees             -           -         -             -            -             -        3.7        3.7      (3.7)         - 
 Equity 
  dividends             -           -         -             -            -             -          -          -     (35.6)    (35.6) 
---------------  --------  ----------  --------  ------------  -----------  ------------  ---------  ---------  ---------  -------- 
 At 31 March 
  2021 
  (audited)          10.7     3,842.1     615.6          43.3        101.7         452.5      (3.5)    1,209.6      130.3   5,192.7 
 Loss for the 
  period                -           -         -             -            -             -          -          -     (81.5)    (81.5) 
 Other 
  comprehensive 
  income                -           -         -          80.9            -             -          -       80.9        0.8      81.7 
---------------  --------  ----------  --------  ------------  -----------  ------------  ---------  ---------  ---------  -------- 
 Total 
  comprehensive 
  income                -           -         -          80.9            -             -          -       80.9     (80.7)       0.2 
 Share-based 
  payments              -           -         -             -            -             -          -          -       14.1      14.1 
 Tax arising on 
  share-based 
  payments              -           -         -             -            -             -          -          -        1.1       1.1 
 Investment in 
  own 
  shares                -           -         -             -            -             -      (0.5)      (0.5)          -     (0.5) 
 Cost of 
  employee 
  benefit trust 
  shares 
  issued to 
  employees             -           -         -             -            -             -        2.4        2.4      (2.4)         - 
 Equity 
  dividends             -           -         -             -            -             -          -          -     (70.8)    (70.8) 
 Capital 
  reduction             -   (1,000.0)         -             -            -             -          -          -    1,000.0         - 
---------------  --------  ----------  --------  ------------  -----------  ------------  ---------  ---------  ---------  -------- 
 At 30 
  September 
  2021 
  (unaudited)        10.7     2,842.1     615.6         124.2        101.7         452.5      (1.6)    1,292.4      991.6   5,136.8 
---------------  --------  ----------  --------  ------------  -----------  ------------  ---------  ---------  ---------  -------- 
 

Consolidated Cash Flow Statement

for the six months ended 30 September 2021

 
                                                          Six months ended        Year ended 
                                                            30 September            31 March 
                                                     -------------------------- 
                                                             2021          2020         2021 
                                                             GBPm          GBPm         GBPm 
                                                      (unaudited)   (unaudited)    (audited) 
---------------------------------------------------  ------------  ------------  ----------- 
 Cash flows from operating activities 
 (Loss)/profit for the period                              (81.5)        (20.3)         24.8 
 Income tax expense/(credit)                                  1.2         (3.9)          9.4 
 Net finance expense                                          6.0           1.0          2.4 
 Amortisation of intangible assets                          115.8          46.2         96.3 
 Depreciation of property, plant and equipment 
  and right-of-use assets                                    18.7          13.5         28.2 
 Loss on disposal of property, plant and 
  equipment                                                   0.8           0.2          1.0 
 Loss on disposal of intangibles                                -           0.1            - 
 Impairment of intangibles                                   14.9             -            - 
 Gain on disposal of pension scheme                             -         (0.4)        (0.3) 
 Loss on disposal of business                                 2.8             -            - 
 Share-based payments                                        14.1           4.6         16.3 
 Difference between pension contributions 
  paid and amounts charged to operating profit                0.4           0.3          0.3 
 Research & Development expenditure tax credit              (1.0)         (1.4)        (3.1) 
 Changes in working capital: 
 Trade and other receivables                                 61.9          39.2        (4.8) 
 Contract assets                                           (25.2)        (17.1)       (70.8) 
 Customer acquisition costs                                 (2.1)             -        (0.3) 
 Trade and other payables                                 (133.1)           5.5          5.5 
 Contract liabilities                                       (8.4)        (43.9)       (13.0) 
 Changes to fair value of forward foreign 
  exchange contracts                                          0.3           0.1        (0.7) 
---------------------------------------------------  ------------  ------------  ----------- 
 Cash generated from operating activities 
  before tax                                               (14.4)          23.7         91.2 
 Income taxes paid                                         (44.5)        (11.3)       (32.8) 
---------------------------------------------------  ------------  ------------  ----------- 
 Net cash generated from operating activities              (58.9)          12.4         58.4 
---------------------------------------------------  ------------  ------------  ----------- 
 Cash flows from investing activities 
 Purchase of property, plant and equipment                  (4.3)         (6.3)       (10.9) 
 Purchase of intangible assets                              (0.1)         (0.8)        (0.5) 
 Payment on disposal of pension scheme                          -         (0.3)        (0.3) 
 Acquisition of subsidiaries, net of cash 
  acquired                                                      -             -    (3,029.5) 
 Restricted cash from acquisition of business 
  - held in escrow                                              -             -        (7.3) 
 Net payment for forward contracts under 
  hedge accounting                                              -             -       (74.2) 
 Proceeds from sale of business, net of cash                  1.6             -            - 
 Purchase of treasury deposits                                  -             -        (0.2) 
 Interest received                                            0.5           0.1          0.5 
---------------------------------------------------  ------------  ------------  ----------- 
 Net cash flows used in investing activities                (2.3)         (7.3)    (3,122.4) 
---------------------------------------------------  ------------  ------------  ----------- 
 Cash flows from financing activities 
 Interest paid                                              (6.6)         (1.3)        (2.8) 
 Purchase of own shares                                     (0.5)         (1.1)        (1.1) 
 Proceeds from borrowings, net of fees incurred                 -          20.0        645.6 
 Payment of principal element of lease liabilities         (11.6)         (8.6)       (18.5) 
 Proceeds from rights issue                                     -             -      2,835.5 
 Transaction costs on issue of shares                           -             -       (28.6) 
 Payment of facility arrangement fees                           -             -        (2.0) 
 Dividends paid to shareholders of the parent              (70.8)        (46.8)       (82.4) 
---------------------------------------------------  ------------  ------------  ----------- 
 Net cash flows used in financing activities               (89.5)        (37.8)      3,345.7 
---------------------------------------------------  ------------  ------------  ----------- 
 Net (decrease)/increase in cash and cash 
  equivalents                                             (150.7)        (32.7)        281.7 
 Net foreign exchange difference                              0.4         (2.0)      (109.6) 
 Opening cash and cash equivalents                          286.6         114.5        114.5 
---------------------------------------------------  ------------  ------------  ----------- 
 Closing cash and cash equivalents                          136.3          79.8        286.6 
---------------------------------------------------  ------------  ------------  ----------- 
 

Notes to the Interim Report

   1    The Interim Report 

The Interim Report was approved by the Board on 9 November 2021. The interim condensed financial statements set out in the Interim Report are unaudited but have been reviewed by the auditor, Ernst & Young LLP, and their report to the Company is set out above.

   2    Basis of preparation and accounting policies 
   a)   Basis of preparation 

This Interim Report has been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board (IASB) and as adopted by the UK, and the disclosure requirements of the Listing Rules.

The Interim Report does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Annual Report for the year ended 31 March 2021.

The financial information set out within this report does not constitute AVEVA's consolidated statutory financial statements as defined in Section 434 of the Companies Act 2006. The results for the year ended 31 March 2021 have been extracted from the consolidated statutory financial statements for AVEVA Group plc for the year ended 31 March 2021 on which the auditor gave an unqualified report (which made no statement under Section 498(2) or 498(3) respectively of the Companies Act 2006 and did not draw attention to any matters by way of emphasis) and have been filed with the Registrar of Companies.

   b)   Accounting policies 

Except for the application of UK-adopted international accounting standards, for which there are no material differences from International Financial Reporting Standards as issued by the IASB and adopted by the EU when applied to AVEVA, the Interim Report has been prepared on the basis of the accounting policies set out in the most recently published Annual Report of the Group for the year ended 31 March 2021. New standards and amendments effective from 1 April 2021 have not had an impact on the interim consolidated financial statements of the Group.

   c)   Non-GAAP measures 

The Group presents the non-GAAP performance measure 'adjusted earnings before interest and tax (EBIT)' on the face of the Consolidated Income Statement and reconciles this to profit from operations as required to be presented under the applicable accounting standards. Adjusted EBIT is not defined by IFRSs and therefore may not be directly comparable with the adjusted EBIT measures of other companies. It is not intended to be a substitute for, or superior to, GAAP measures of profit. The Directors believe that this alternative measure of profit provides a reliable and consistent measure of the Group's underlying performance. Adjusted earnings per share is calculated having adjusted profit after tax for the same items, their tax effect, the deferred revenue haircut arising due to the fair valuing of OSIsoft's contract liabilities on acquisition, and the tax effect of the deferred revenue haircut.

The business is managed and measured on a day-to-day basis using adjusted results. To arrive at adjusted results, certain adjustments are made for normalised and exceptional items that are individually important and which could, if included, distort the understanding of the performance for the year and the comparability between periods.

The Group also presents pro forma results within the Chief Executive's Review and Finance Review. For the six months ended 30 September 2021, these represent the Group's adjusted results with an additional adjustment to add back the deferred revenue haircut arising due to the fair valuing of OSIsoft's contract liabilities on acquisition. For the six months ended 30 September 2020, these include pre-acquisition OSIsoft results for the period, assumes no synergies or trading between the groups, and assumes the term loan used to finance the acquisition was entered into on 1 April 2020. These are presented to increase year-on-year comparability, given the significant impact of the OSIsoft acquisition upon the newly enlarged Group's results.

Additional information, definitions and reconciliations from GAAP measures are provided in the non-GAAP measures section below.

   3    Going concern 

In adopting the going concern basis for preparing the interim financial statements, the Group has considered the business activities, and principal risks and uncertainties in the context of the current operating environment. This includes expectations of business performance and estimated potential ongoing impact of global Covid-19 pandemic and its subsequent impact upon the Group's cashflow, liquidity headroom and covenant forecasts.

At 30 September 2021, the Group held external debt in the form of a GBP669.5 million term loan, due for repayment in March 2024. The Group has access to a GBP250.0 million Revolving Credit Facility (RCF), of which nil was drawn down at 30 September 2021. This facility is due for renewal in February 2024, with two one-year extension options subject to the lender's approval.

The Group has developed working capital financial models covering the period from the signing of this Interim Report to 31 December 2022. These include:

   --      Scenario 1: A base case scenario, representing the Group's forecasts for the period. 

-- Scenario 2: A stress case scenario, representing a severe but plausible downside where revenue is decreased 10% from the base case and there are moderate delays in cash collection (a 10-day increase in debtor days).

-- Scenario 3: A more severe stress case where revenue is decreased 20% from the base case and there are severe delays in cash collection (a 20-day increase in debtor days).

Under Scenarios 1 and 2, there is no expected requirement to draw down on the RCF across the going concern period. Under Scenario 3, the Group would utilise the RCF, but within the current liquidity levels available. Throughout all scenarios, the Group has liquidity headroom on existing facilities and against the RCF financial covenants during the assessment period. Should a more extreme downside scenario occur, additional mitigating actions could be taken such as the cancellation or deferral of dividend payments and reductions in other discretionary operating costs.

The interim financial statements for the six months ended 30 September 2021 have therefore been prepared under the going concern basis of accounting.

   4    Risks and uncertainties 

There are several potential risks and uncertainties which could have a material impact on the Group's long-term performance. The principal risks and uncertainties as set out in the Annual Report for the year ended 31 March 2021 remain unchanged, except for Industrial digitalisation strategy which is no longer considered a principal risk. The unchanged risks are:

   --      Talent; 
   --      Subscription; 
   --      Cloud; 
   --      Sustainability; 
   --      OSIsoft integration; 
   --      Competitors; 
   --      Dependency on cyclical markets; 
   --      AVEVA software products implicated in industrial accidents or customer cyber attack; 
   --      Cyber attack; 
   --      Regulatory compliance; 
   --      Global economic disruption and declining GDPs; 
   --      Internal IT systems (suitability and continuity); and 
   --      Disruptive technologies. 

Industrial digitalisation strategy is no longer considered to be a principal risk because:

-- The market has evolved; the move towards digitalisation has accelerated within the last 24 months where customers have understood and accepted the imperative need to evolve. There is now a diminished need to convince customers to digitalise, rather it is the expected standard.

-- Given this market evolution and AVEVA's strategic acquisition of OSIsoft, which further consolidates its position within the industrial digitalisation market, this is no longer a material threat to AVEVA over the next 18 months.

-- AVEVA's strategy to grow its market share of industrial digitalisation now morphs into other existing principal risks, namely strategic risk elements of Cloud, Competitors, Sustainability, Subscription and OSIsoft integration.

These risks are described in more detail on pages 36 to 46 of the 2021 Annual Report. The Directors routinely monitor these risks and uncertainties, and appropriate actions are taken to manage them within agreed risk appetites. Included in the Chief Executive's Review is a commentary on the outlook of the Group for the remaining six months of the year.

At an executive level, risk management remains the responsibility of the Executive Risk Committee, who report to the Board on risk matters.

   5    Revenue 

An analysis of the Group's revenue is as follows:

 
                                       Services transferred       Services 
                                              at a point in    transferred 
 Six months ended 30 September 2021                    time      over time   Total 
  (unaudited)                                          GBPm           GBPm    GBPm 
------------------------------------  ---------------------  -------------  ------ 
 Subscription                                          60.6           73.5   134.1 
 Maintenance                                              -          162.7   162.7 
 Perpetual licences                                   127.6              -   127.6 
 Services                                                 -           56.5    56.5 
------------------------------------  ---------------------  -------------  ------ 
                                                      188.2          292.7   480.9 
------------------------------------  ---------------------  -------------  ------ 
 
 
                                       Services transferred       Services 
                                              at a point in    transferred 
 Six months ended 30 September 2020                    time      over time   Total 
  (unaudited)                                          GBPm           GBPm    GBPm 
------------------------------------  ---------------------  -------------  ------ 
 Subscription                                          53.2           60.7   113.9 
 Maintenance                                              -           99.6    99.6 
 Perpetual licences                                    61.7              -    61.7 
 Services                                                 -           57.4    57.4 
------------------------------------  ---------------------  -------------  ------ 
                                                      114.9          217.7   332.6 
------------------------------------  ---------------------  -------------  ------ 
 
 
                                       Services transferred       Services 
                                              at a point in    transferred 
                                                       time      over time   Total 
 Year ended 31 March 2021 (audited)                    GBPm           GBPm    GBPm 
------------------------------------  ---------------------  -------------  ------ 
 Subscription                                         236.1          123.6   359.7 
 Maintenance                                              -          197.7   197.7 
 Perpetual licences                                   141.6              -   141.6 
 Services                                                 -          121.4   121.4 
------------------------------------  ---------------------  -------------  ------ 
                                                      377.7          442.7   820.4 
------------------------------------  ---------------------  -------------  ------ 
 
   6    Segment information 

The Executive Leadership Team (ELT) monitors and appraises the business based on the performance of three geographic regions: Americas; Asia Pacific; and Europe, Middle East and Africa (EMEA). These three regions are the basis of the Group's primary operating segments reported in the financial statements. Performance is evaluated based on regional contribution using the same accounting policies as adopted for the Group's financial statements. There is no inter-segment revenue. Corporate costs include centralised functions such as Executive Management, Information Management, Finance and Legal. Balance sheet information is not included in the information provided to the ELT.

 
                                            Six months ended 30 September 2021 (unaudited) 
                                        Americas   Asia Pacific     EMEA   Corporate     Total 
                                            GBPm           GBPm     GBPm        GBPm      GBPm 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Revenue 
 Subscription                               50.7           33.4     50.0           -     134.1 
 Maintenance                                79.5           27.8     55.4           -     162.7 
 Perpetual licences                         51.1           40.2     36.3           -     127.6 
 Services                                   23.1           13.6     19.8           -      56.5 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Regional revenue total                    204.4          115.0    161.5           -     480.9 
 Cost of sales(1)                         (28.0)         (10.5)   (16.3)      (51.8)   (106.6) 
 Selling and administrative 
  expenses(1)                             (45.6)         (24.2)   (42.3)      (95.4)   (207.5) 
 Net impairment loss on financial 
  assets                                     0.7            3.1      0.3           -       4.1 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Regional contribution                     131.5           83.4    103.2     (147.2)     170.9 
 Research & Development costs(1)                                                        (80.9) 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Adjusted EBIT                                                                            90.0 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Exceptional items, other normalised 
  adjustments(1) and net interest                                                      (170.3) 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Loss before tax                                                                        (80.3) 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 

1. Cost of sales, Selling and administrative expenses and Research & Development costs exclude the impact of exceptional and normalised adjustments. Normalised adjustments include amortisation of intangible assets (excluding other software), share-based payments, and movements on fair value of forward exchange contracts.

 
                                            Six months ended 30 September 2020 (unaudited) 
                                        Americas   Asia Pacific     EMEA   Corporate     Total 
                                            GBPm           GBPm     GBPm        GBPm      GBPm 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Revenue 
 Subscription                               34.8           29.2     49.9           -     113.9 
 Maintenance                                42.5           23.4     33.7           -      99.6 
 Perpetual licences                         18.9           20.8     22.0           -      61.7 
 Services                                   22.1           13.7     21.6           -      57.4 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Regional revenue total                    118.3           87.1    127.2           -     332.6 
 Cost of sales(1)                         (24.8)          (8.6)   (16.1)      (34.2)    (83.7) 
 Selling and administrative 
  expenses(1)                             (28.0)         (18.8)   (31.3)      (53.4)   (131.5) 
 Net impairment loss on financial 
  assets                                     0.4            0.8    (2.0)           -     (0.8) 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Regional contribution                      65.9           60.5     77.8      (87.6)     116.6 
 Research & Development costs(1)                                                        (60.3) 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Adjusted EBIT                                                                            56.3 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Exceptional items, other normalised 
  adjustments(1) and net interest                                                       (80.5) 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Loss before tax                                                                        (24.2) 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 

1. Cost of sales, Selling and administrative expenses and Research & Development costs exclude the impact of exceptional and normalised adjustments. Normalised adjustments include amortisation of intangible assets (excluding other software), share-based payments, and movements on fair value of forward exchange contracts.

 
                                                  Year ended 31 March 2021 (audited) 
                                        Americas   Asia Pacific     EMEA   Corporate     Total 
                                            GBPm           GBPm     GBPm        GBPm      GBPm 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Revenue 
 Subscription                               94.6           95.5    169.6           -     359.7 
 Maintenance                                84.3           46.7     66.7           -     197.7 
 Perpetual licences                         42.1           47.4     52.1           -     141.6 
 Services                                   44.4           31.7     45.3           -     121.4 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Regional revenue total                    265.4          221.3    333.7           -     820.4 
 Cost of sales(1)                         (50.0)         (19.8)   (39.9)      (70.8)   (180.5) 
 Selling and administrative 
  expenses(1)                             (64.4)         (40.7)   (68.0)     (120.3)   (293.4) 
 Net impairment loss on financial 
  assets                                   (1.0)          (1.8)    (0.9)           -     (3.7) 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Regional contribution                     150.0          159.0    224.9     (191.1)     342.8 
 Research & Development costs(1)                                                       (116.4) 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Adjusted EBIT                                                                           226.4 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Exceptional items, other normalised 
  adjustments(1) and net interest                                                      (192.2) 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 Profit before tax                                                                        34.2 
-------------------------------------  ---------  -------------  -------  ----------  -------- 
 

1. Cost of sales, Selling and administrative expenses and Research & Development costs exclude the impact of exceptional and normalised adjustments. Normalised adjustments include amortisation of intangible assets (excluding other software), share-based payments, and movements on fair value of forward exchange contracts.

   7    Selling and administrative expenses 

An analysis of selling and administrative expenses is set out below:

 
                                          Six months ended        Year ended 
                                            30 September            31 March 
                                     -------------------------- 
                                             2021          2020         2021 
                                             GBPm          GBPm         GBPm 
                                      (unaudited)   (unaudited)    (audited) 
-----------------------------------  ------------  ------------  ----------- 
 Selling and distribution expenses          157.5         103.2        226.8 
 Administrative expenses                    112.5          78.3        193.0 
                                            270.0         181.5        419.8 
-----------------------------------  ------------  ------------  ----------- 
 
   8    Exceptional items 
 
                                      Six months ended        Year ended 
                                        30 September            31 March 
                                 -------------------------- 
                                         2021          2020         2021 
                                         GBPm          GBPm         GBPm 
                                  (unaudited)   (unaudited)    (audited) 
-------------------------------  ------------  ------------  ----------- 
 Acquisition costs                        0.7          16.3         44.4 
 Integration and restructuring           15.8          15.8         39.6 
 Other expense/(income)                  17.7         (3.1)        (5.5) 
                                         34.2          29.0         78.5 
-------------------------------  ------------  ------------  ----------- 
 

The total cash outflow during the year as a result of exceptional items was GBP35.1 million (H1 FY21: GBP31.1 million).

   a)   Acquisition costs 

Current and prior year acquisition costs relate to adviser fees incurred as a result of the acquisition of OSIsoft, LLC which completed on 19 March 2021. These costs are not expected to significantly increase in the second half of the financial year.

   b)   Integration and restructuring 

Integration and restructuring included GBP7.8 million in relation to the integration of OSIsoft, LLC, consisting primarily of consultancy fees paid to advisers and the costs of additional temporary resources. Costs of GBP8.0 million were incurred in relation to the integration of heritage AVEVA and Schneider Electric industrial software business, relating primarily to the implementation of a global ERP system.

Prior year integration and restructuring related to the integration of heritage AVEVA and the Schneider Electric industrial software business. Key activities included work undertaken to exit the Transitional Service Agreements (TSA) provided by Schneider Electric; costs incurred in the initial design and build phases of the new ERP system; and assistance from consultants to the Group in running programmes designed to deliver revenue and cost synergies.

   c)   Other expense/(income) 

Other expense includes a GBP2.8 million loss on sale resulting from the disposal of the Acquis Software, Termis Software and Water Loss Management Software business. See note 12(b) for further details. GBP14.9 million relates to an impairment of intangible assets (developed technology and customer relationships) associated with the Group's steel fabrication business, following the announcement in July 2021 of these products' retirement. These assets are allocated across all operating segments. A discounted cash flow model was used to determine the value in use over the remaining life.

Prior year other income related to the reimbursement from Schneider Electric for capital expenditure incurred as part of the Group's migration activities covered by Transitional Services Agreements (TSA) following the combination of heritage AVEVA and SES in February 2018.

   d)   Tax impact 

The tax credit on the exceptional items of GBP34.2 million (H1 FY21: GBP29.0 million) is GBP5.9 million (H1 FY21: GBP4.2 million).

   9    Income tax expense 

The total tax expense for the half year ended 30 September 2021 is GBP1.2 million (H1 FY21: credit of GBP3.9 million).

The effective tax rate on the loss before tax is (1.5)% (H1 FY21: 16.1%). The difference between the Group's effective tax rate and the US tax rate of 24.0% is due to a GBP17.0 million expense relating to the increase in the UK tax rate to 25% from 1 April 2023 and higher overseas tax rates.

The tax credit on adjusted profit before tax is GBP3.2 million (H1 FY21: expense of GBP9.5 million) which equates to an effective tax rate of (3.8)% (H1 FY21: 17.2%).

   10   Ordinary dividends 

The proposed interim dividend of 13.0 pence per ordinary share will be payable on 4 February 2022 to shareholders on the register on 7 January 2022. In accordance with IFRS, no provision for the interim dividend has been made in these financial statements.

The dividends relating to year ended 31 March 2021 were declared and paid relating to AVEVA Group plc.

An analysis of dividends paid is set out below:

 
                                                      Six months ended        Year ended 
                                                        30 September            31 March 
                                                 -------------------------- 
                                                         2021          2020         2021 
                                                         GBPm          GBPm         GBPm 
                                                  (unaudited)   (unaudited)    (audited) 
-----------------------------------------------  ------------  ------------  ----------- 
 Final 2020/21 paid at 23.5 pence per ordinary 
  share                                                  70.8             -            - 
 Interim 2020/21 paid at 12.4 pence per 
  ordinary share(1)                                         -             -         35.6 
 Final 2019/20 paid at 23.3 pence per ordinary 
  share(1)                                                  -          46.8         46.8 
                                                         70.8          46.8         82.4 
-----------------------------------------------  ------------  ------------  ----------- 
 

1. Dividends per share for comparative periods have been restated and adjusted for a bonus factor of 0.80, to reflect the bonus element of the November 2020 rights issue. Previously stated dividends per ordinary share were interim 2019/20 dividend at 15.5 pence per ordinary share and final 2019/20 dividend at 29.0 pence per ordinary share.

   11   Earnings per share 
 
                                                    Six months ended         Year ended 
                                                      30 September             31 March 
                                             ----------------------------- 
                                                                      2020 
                                                     2021    (restated)(1)         2021 
                                                    pence            pence        pence 
                                              (unaudited)      (unaudited)    (audited) 
-------------------------------------------  ------------  ---------------  ----------- 
 (Loss)/earnings per share for the period: 
 - basic                                          (27.07)          (10.11)        11.35 
 - diluted                                        (27.07)          (10.11)        11.27 
 Adjusted earnings per share: 
 - basic                                            37.59            22.82        81.86 
 - diluted                                          37.38            22.68        81.31 
-------------------------------------------  ------------  ---------------  ----------- 
 
 
                                                        Six months ended          Year ended 
                                                          30 September              31 March 
                                                 ----------------------------- 
                                                                          2020 
                                                         2021    (restated)(1)          2021 
                                                       number           number        number 
                                                  (unaudited)      (unaudited)     (audited) 
-----------------------------------------------  ------------  ---------------  ------------ 
 EPS 
 Weighted average number of ordinary shares 
  for basic EPS                                   301,103,964      200,852,783   218,531,149 
 Effect of dilution: employee share options(2)              -                -     1,489,318 
-----------------------------------------------  ------------  ---------------  ------------ 
 Weighted average number of ordinary shares 
  adjusted for the effect of dilution             301,103,964      200,852,783   220,020,467 
-----------------------------------------------  ------------  ---------------  ------------ 
 
 Adjusted EPS 
 Weighted average number of ordinary shares 
  for basic EPS                                   301,103,964      200,852,783   218,531,149 
 Effect of dilution: employee share options         1,756,647        1,178,921     1,489,318 
-----------------------------------------------  ------------  ---------------  ------------ 
 Weighted average number of ordinary shares 
  adjusted for the effect of dilution             302,860,611      202,031,704   220,020,467 
-----------------------------------------------  ------------  ---------------  ------------ 
 

1. Basic and adjusted EPS for September 2020 has been restated and adjusted for a bonus factor of 0.80 to reflect the bonus element of the November 2020 rights issue. Amounts originally stated as at 30 September 2020 were (12.60) pence basic earnings per share, (12.60) pence diluted earnings per share, 28.43 pence adjusted basic earnings per share, and 28.26 pence adjusted diluted earnings per share.

2. The effect of share options are anti-dilutive in the six months ended 30 September 2021 and the six months ended 30 September 2020 due to the Group recognising a net loss for the periods. They are therefore excluded from the diluted earnings per share calculation.

The calculation of EPS is based on the net loss attributable to equity holders of the parent for the six months ended 30 September 2021 of GBP81.5 million and the weighted average number of shares stated above.

Details of the calculation of adjusted EPS are set out below:

 
                                                            Six months ended        Year ended 
                                                              30 September            31 March 
                                                       -------------------------- 
                                                               2021          2020         2021 
                                                               GBPm          GBPm         GBPm 
                                                        (unaudited)   (unaudited)    (audited) 
-----------------------------------------------------  ------------  ------------  ----------- 
 (Loss)/profit after tax for the period                      (81.5)        (20.3)         24.8 
 Intangible amortisation (excluding other 
  software)                                                   115.7          45.8         95.7 
 Share-based payments                                          14.1           4.6         16.3 
 Loss/(gain) on fair value of forward foreign 
  exchange contracts                                            0.3           0.1        (0.7) 
 Exceptional items                                             34.2          29.0         78.5 
 Effect of acquisition accounting adjustments(1)               35.2             -          3.3 
 Tax effect on exceptional items                              (5.9)         (4.2)       (15.1) 
 Tax effect on other normalised adjustments 
  (excluding net finance expense)                              10.3         (9.2)       (23.0) 
 Tax effect on acquisition accounting adjustments(1)          (9.2)             -        (0.9) 
 Adjusted profit after tax                                    113.2          45.8        178.9 
-----------------------------------------------------  ------------  ------------  ----------- 
 

1. Acquisition accounting adjustments relate to the deferred revenue haircut made upon the combination with OSIsoft, LLC.

   12   Business combinations 
   a)   Acquisition of OSIsoft, LLC 

The Group acquired 100% of the voting shares of OSIsoft, LLC on 19 March 2021. See the Group's 2021 Annual Report for further details. Provisional fair values at acquisition were reported in note 14 of the 2021 Annual Report. This was revised in the six months to 30 September 2021 due to the finalisation of the completion accounts process. The revised fair values of identifiable assets acquired and liabilities assumed at the acquisition date, alongside the carrying values at acquisition, are:

 
                                                              Provisional 
                                             Carrying value    fair value   Provisional 
                                             at acquisition    adjustment    fair value 
                                                       GBPm          GBPm          GBPm 
-----------------------------------------  ----------------  ------------  ------------ 
 Non-current assets 
 Intangible assets                                      0.4       1,231.6       1,232.0 
 Property, plant and equipment                         21.0             -          21.0 
 Right-of-use assets                                   36.2             -          36.2 
 Deferred tax assets                                   22.0        (11.2)          10.8 
 Trade and other receivables                            2.9             -           2.9 
 Customer acquisition costs                            10.3        (10.3)             - 
 Investments                                            0.4             -           0.4 
-----------------------------------------  ----------------  ------------  ------------ 
 Total non-current assets                              93.2       1,210.1       1,303.3 
-----------------------------------------  ----------------  ------------  ------------ 
 Current assets 
 Trade and other receivables                           75.6         (2.5)          73.1 
 Contract assets                                        2.4             -           2.4 
 Customer acquisition costs                             4.0         (4.0)             - 
 Cash and cash equivalents                            150.6             -         150.6 
 Financial assets                                       0.4             -           0.4 
-----------------------------------------  ----------------  ------------  ------------ 
 Total current assets                                 233.0         (6.5)         226.5 
-----------------------------------------  ----------------  ------------  ------------ 
 Current liabilities 
 Trade and other payables                           (115.1)         (3.3)       (118.4) 
 Contract liabilities                               (136.2)          60.5        (75.7) 
 Lease liabilities                                    (6.8)             -         (6.8) 
 Current tax liabilities                             (29.9)         (7.6)        (37.5) 
-----------------------------------------  ----------------  ------------  ------------ 
 Total current liabilities                          (288.0)          49.6       (238.4) 
-----------------------------------------  ----------------  ------------  ------------ 
 Non-current liabilities 
 Lease liabilities                                   (37.9)             -        (37.9) 
 Retirement benefit obligations                       (0.9)             -         (0.9) 
-----------------------------------------  ----------------  ------------  ------------ 
 Total non-current liabilities                       (38.8)             -        (38.8) 
-----------------------------------------  ----------------  ------------  ------------ 
 Net identifiable assets and liabilities              (0.6)       1,253.2       1,252.6 
 Goodwill                                                                       2,572.4 
-----------------------------------------  ----------------  ------------  ------------ 
 Total consideration                                                            3,825.0 
-----------------------------------------  ----------------  ------------  ------------ 
 

These provisional fair values are subject to change. Final fair values will be reported in the Group's 2022 Annual Report.

   b)   Disposal of Acquis Software, Termis Software and Water Loss Management Software businesses 

On 11 May 2021 the Group entered into an agreement whereby it agreed to sell the business and assets of Acquis Software, Termis Software and Water Loss Management Software to Schneider Electric for an aggregate consideration of GBP1.6 million. This transaction was made at arm's length, with the consideration set based upon independent advice.

This completed on 30 June 2021. A loss on disposal of GBP2.8 million was recognised, calculated as follows:

 
                              Total 
                               GBPm 
                        (unaudited) 
---------------------  ------------ 
 Cash consideration             1.6 
---------------------  ------------ 
 Gross consideration            1.6 
 Net assets disposed          (4.4) 
---------------------  ------------ 
 Loss on disposal             (2.8) 
---------------------  ------------ 
 

Net assets disposed comprised:

 
                                    Total 
                                     GBPm 
                              (unaudited) 
---------------------------  ------------ 
 Non-current assets 
 Goodwill                             5.2 
 Other intangible assets              0.1 
 Total non-current assets             5.3 
---------------------------  ------------ 
 Current liabilities 
 Contract liabilities               (0.9) 
---------------------------  ------------ 
 Total current liabilities          (0.9) 
---------------------------  ------------ 
 Net assets                           4.4 
---------------------------  ------------ 
 

The net loss on disposal is included within other expense.

Disposed goodwill of GBP5.2 million has been allocated to the following CGUs:

   --      GBPnil million to Americas 
   --      GBP1.9 million to APAC 
   --      GBP3.3 million to EMEA 
   13   Trade and other receivables 
 
                                      30 September   30 September    31 March 
                                              2021           2020        2021 
                                              GBPm           GBPm        GBPm 
                                       (unaudited)    (unaudited)   (audited) 
-----------------------------------  -------------  -------------  ---------- 
 Current 
 Trade receivables                           189.4           99.3       245.3 
 Amounts owed from related parties 
  (note 16)                                   21.9           35.7        21.6 
 Prepayments and other receivables            55.2           50.1        50.1 
-----------------------------------  -------------  -------------  ---------- 
                                             266.5          185.1       317.0 
-----------------------------------  -------------  -------------  ---------- 
 Non-current 
 Prepayments and other receivables            16.0           22.7        19.4 
-----------------------------------  -------------  -------------  ---------- 
                                              16.0           22.7        19.4 
-----------------------------------  -------------  -------------  ---------- 
 

The Directors consider that the carrying amount of trade and other receivables approximates their fair value.

   14   Trade and other payables 
 
                                        30 September   30 September    31 March 
                                                2021           2020        2021 
                                                GBPm           GBPm        GBPm 
                                         (unaudited)    (unaudited)   (audited) 
-------------------------------------  -------------  -------------  ---------- 
 Current 
 Trade payables                                 20.3           20.4        39.6 
 Amounts owed to related parties 
  (note 16)                                      2.4            1.9         1.5 
 Social security, employee and sales 
  taxes                                         21.1           20.6        28.5 
 Accruals                                       72.2           76.4       176.8 
 Other payables                                 24.9           15.0        24.9 
                                               140.9          134.3       271.3 
-------------------------------------  -------------  -------------  ---------- 
 Non-current 
 Other liabilities                              15.5           20.9        18.2 
-------------------------------------  -------------  -------------  ---------- 
                                                15.5           20.9        18.2 
-------------------------------------  -------------  -------------  ---------- 
 

Accruals as at 30 September 2021 has decreased from 31 March 2021 due to payment of one-off costs relating to the acquisition of OSIsoft, LLC and employee annual bonuses in the six months to 30 September 2021.

   15   Capital reduction 

The Group received approval from shareholders to perform a GBP1.0 billion capital reduction at the Annual General Meeting on 7 July 2021. This completed on 10 August 2021, resulting in a reduction in share premium and an increase in reserves within retained earnings.

   16   Related party transactions 

Transactions between Group subsidiaries have been eliminated on consolidation.

   a)   Schneider Electric Group companies 

During the period, Group companies entered into the following transactions with Schneider Electric Group companies:

 
                                       Six months ended        Year ended 
                                         30 September            31 March 
                                  -------------------------- 
                                          2021          2020         2021 
                                          GBPm          GBPm         GBPm 
                                   (unaudited)   (unaudited)    (audited) 
 Sales of goods and services              30.0          33.4         62.2 
 Purchase of goods and services          (1.1)         (4.2)        (3.4) 
 Interest expense on term loan           (3.9)             -        (0.2) 
 Other non-trading transactions            1.6           9.2         13.7 
--------------------------------  ------------  ------------  ----------- 
 

At 30 September 2021, other non-trading transactions comprised the GBP1.6 million sale of Acquis Software, Termis Software and Water Management Software to Schneider Electric. See note 12(b) for further details. For the year-ended 31 March 2021, this comprised the reimbursement for expenditure incurred during the Group's migration away from activities covered as part of the TSA with Schneider Electric. See note 8 for further details.

As at the balance sheet date, Group companies held the following balances with Schneider Electric Group companies:

 
                                30 September   30 September    31 March 
                                        2021           2020        2021 
                                        GBPm           GBPm        GBPm 
                                 (unaudited)    (unaudited)   (audited) 
 Trade and other receivables            21.8           24.6        18.9 
 Trade and other payables              (2.4)          (1.9)       (1.5) 
 Non-trading receivables                 0.1           11.1         2.7 
 Term loan(1)                        (670.2)              -     (654.8) 
-----------------------------  -------------  -------------  ---------- 
 

1. This balance represents the contractual obligation owed to Schneider Electric Group companies. The carrying value per the balance sheet is stated after offsetting directly attributable costs for obtaining this financing.

   b)   Transactions with other related parties 

Dr J Patrick Kennedy controls 4.42% of the issued ordinary share capital of AVEVA Group plc through his controlling ownership of Estudillo Holdings Corp and is Chairman Emeritus of the Group, a board advisory position.

During the period, Group companies entered into the following transactions with companies in which Dr J Patrick Kennedy has a shareholding:

 
                                       Six months ended        Year ended 
                                         30 September            31 March 
                                  -------------------------- 
                                          2021          2020         2021 
                                          GBPm          GBPm         GBPm 
                                   (unaudited)   (unaudited)    (audited) 
--------------------------------  ------------  ------------  ----------- 
 Purchase of goods and services            2.0             -          0.1 
--------------------------------  ------------  ------------  ----------- 
 
   17   Commitments and contingencies 
 
                              30 September   30 September    31 March 
                                      2021           2020        2021 
                                      GBPm           GBPm        GBPm 
                               (unaudited)    (unaudited)   (audited) 
---------------------------  -------------  -------------  ---------- 
 Bank guarantees                      10.9           23.9        12.8 
 Parent Company guarantees            49.4           29.0        44.7 
---------------------------  -------------  -------------  ---------- 
                                      60.3           52.9        57.5 
---------------------------  -------------  -------------  ---------- 
 

The Group provides a number of guarantees for obligations to complete and deliver projects. These include bid, performance and warranty bonds, and guarantees against advance payments, all of which arise in the ordinary course of business and are issued by either banking partners or AVEVA parent companies. The amounts disclosed above represent the Group's contractual exposure at the balance sheet date.

Non-GAAP Measures (unaudited)

Various non-GAAP measures are presented throughout this Interim Report, which management believe provide useful information for understanding the Group's financial performance. These non-GAAP measures should be considered in addition to IFRS measures and are not intended to be a substitute for them.

The Group's adjusted results exclude the costs relating to major integration or restructuring events while including the benefits. They also exclude significant recurring expense relating to normalised items. Therefore, adjusted results will present a more favourable view than GAAP measures and should not be considered to be a complete picture of the Group's financial performance.

As the Group's non-GAAP measures are not defined by IFRS, they may not be directly comparable with other companies who use similar measures.

Further information, definitions, the intention in presenting these measures, and a reconciliation from the nearest IFRS measure are provided below.

 
                     Closest 
 Non-GAAP             equivalent                                                                      Reconciliation 
  measure             IFRS measure      Definition and purpose                                         / calculation 
  Income statement - revenue measures 
 Annualised          No direct          The non-cancellable contract consideration                    Consistent with 
  recurring           equivalent         related to subscription and maintenance                      definition 
  revenue (ARR)                          contracts as at the reporting                                given. 
                                         date divided by the number of 
                                         days in the non-cancellable contract                         This cannot be 
                                         period and multiplied by 365.                                reconciled to 
                                                                                                      an IFRS measure. 
                                         ARR represents the annualised 
                                         value of the recurring revenue 
                                         base that is expected to be carried 
                                         into future periods. 
 
                                         ARR is calculated on a constant 
                                         currency basis. 
 
                                         ARR growth is a component of the 
                                         Group bonus scheme. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Revenue at          Revenue            Constant currency is derived by                               See section a 
  constant                               translating the relevant current                              below. 
  currency                               year figure at prior year average 
                                         exchange rates. 
 
                                         Constant currency enables measurement 
                                         of performance on a comparable 
                                         year-on-year basis without the 
                                         potentially distorting effect 
                                         of foreign exchange translation. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Organic revenue     Revenue            Constant currency figures, adjusted                           See section a 
  at constant                            for significant one-off events                                below. 
  currency                               affecting year-on-year comparability, 
                                         including acquisitions and disposals 
                                         of subsidiaries. 
 
                                         Organic constant currency enables 
                                         measurement of performance on 
                                         a comparable year-on-year basis 
                                         without the potentially distorting 
                                         effects of foreign exchange movements 
                                         and merger & acquisition activity. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Recurring           No direct          Recurring revenue is defined as                               See section a 
  revenue             equivalent         subscription revenue plus maintenance                         below. 
                                         revenue. 
 
                                         Recurring revenue is revenue earned 
                                         from customers for the provision 
                                         of goods or services over a contractual 
                                         term, where future contract renewal 
                                         is required for ongoing use of 
                                         the product. 
                    -----------------  ------------------------------------------------------------  ----------------- 
  Income statement - cost measures 
 Adjusted            No direct          Expense excluding exceptional                                 See section c 
  costs               equivalent         and normalised items.                                         below. 
 
                                         Adjusted costs allow for the comparison 
                                         of results year-on-year without 
                                         the potentially distorting effects 
                                         of significant one-off items or 
                                         items which do not relate to the 
                                         underlying performance of the 
                                         Group. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Adjusted            No direct          Constant currency is derived by                               See section c 
  costs at            equivalent         translating the relevant current                              below. 
  constant                               year figure at prior year average 
  currency                               exchange rates. 
 
                                         Constant currency enables measurement 
                                         of performance on a comparable 
                                         year-on-year basis without the 
                                         potentially distorting effect 
                                         of foreign exchange movements. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Exceptional         No direct          Items which are non-recurring                                 Exceptional 
  items               equivalent         and are identified by virtue of                              items 
                                         either their size or their nature.                           are included 
                                         These items can include, but are                             on the face of 
                                         not restricted to:                                           the Consolidated 
                                          *    costs of significant restructuring exercises;          Income 
                                                                                                      Statement. 
                                                                                                      Further 
                                          *    fees associated with business combinations; and        information 
                                                                                                      on the nature 
                                                                                                      of exceptional 
                                          *    costs incurred in integrating acquired companies.      items is 
                                                                                                      included 
                                                                                                      within note 8 
                                                                                                      of the notes 
                                         In the six months ended 30 September                         to the Interim 
                                         2021, exceptional items also includes                        Report. 
                                         the loss on disposal of a business 
                                         and impairment of intangible assets 
                                         following the decision to end-of-life 
                                         the associated products. 
 
                                         Exceptional items are excluded 
                                         from statutory measures to determine 
                                         adjusted results. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Normalised          No direct          These are recurring items which                               Normalised items 
  items               equivalent         management consider to have a                                are included 
                                         distorting effect on the underlying                          on the face of 
                                         results of the Group. These include:                         the Consolidated 
                                          *    amortisation of intangible assets (excluding other     Income 
                                               software);                                             Statement. 
                                                                                                      Further 
                                                                                                      information 
                                          *    share-based payment charges; and                       on the rationale 
                                                                                                      for these items 
                                                                                                      being normalised 
                                          *    fair value adjustments on financial derivatives.       is included in 
                                                                                                      note 2(c) of 
                                                                                                      the notes to 
                                                                                                      the Interim 
                                         Normalised items are excluded                                Report. 
                                         from statutory measures to determine 
                                         adjusted results. 
                    -----------------  ------------------------------------------------------------  ----------------- 
  Income statement - profit measures 
 Adjusted            Profit             Earnings before finance revenue,                              A reconciliation 
  EBIT                from operations    finance expense, tax, exceptional                            is given on the 
                                         items, and normalised items.                                 face of the 
                                                                                                      Consolidated 
                                         Adjusted results allow for the                               Income 
                                         comparison of results year-on-year                           Statement. 
                                         without the potentially distorting 
                                         effects of significant one-off 
                                         items or items which do not relate 
                                         to the underlying performance 
                                         of the Group. Adjusted EBIT is 
                                         a measure of the underlying profitability 
                                         of the Group. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Adjusted            No direct          Year-on-year percentage increase                              Consistent with 
  EBIT growth         equivalent         in adjusted EBIT.                                            definition 
                                                                                                      given. 
                                         Adjusted results allow for the 
                                         comparison of results year-on-year 
                                         without the potentially distorting 
                                         effects of significant one-off 
                                         items or items which do not relate 
                                         to the underlying performance 
                                         of the Group. Adjusted EBIT growth 
                                         is a measure of the movement in 
                                         the underlying profitability of 
                                         the Group. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Adjusted            No direct          Adjusted EBIT as a percentage                                 Consistent with 
  EBIT margin         equivalent         of revenue.                                                  definition 
                                                                                                      given. 
                                         Adjusted results allow for the 
                                         comparison of results year-on-year 
                                         without the potentially distorting 
                                         effects of significant one-off 
                                         items or items which do not relate 
                                         to the underlying performance 
                                         of the Group. Adjusted EBIT margin 
                                         is a measure of the underlying 
                                         profitability of the Group. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Adjusted            EPS                Adjusted profit after tax divided                             See note 11 of 
  EPS                                    by the weighted average number                               the notes to 
                                         of ordinary shares. Weighted average                         the Interim 
                                         number of ordinary shares are                                Report. 
                                         the same as those used in the 
                                         Group's EPS calculation. 
 
                                         Adjusted results allow for the 
                                         comparison of results year-on-year 
                                         without the potentially distorting 
                                         effects of significant one-off 
                                         items or items which do not relate 
                                         to the underlying performance 
                                         of the Group. Adjusted EPS is 
                                         a measure of the underlying earnings 
                                         per share for the Group. 
 
                                         Adjusted diluted EPS growth is 
                                         a performance condition for LTIP 
                                         vesting. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Adjusted            Profit             Profit after tax, adjusting for                               See note 11 of 
  profit after        after              exceptional and normalised items                             the notes to 
  tax                 tax                and the tax effect of those items,                           the Interim 
                                         and the revenue haircut and associated                       Report. 
                                         tax effect. The tax on normalised 
                                         items includes the benefit from 
                                         tax deductible goodwill and intangibles. 
 
                                         Adjusted results allow for the 
                                         comparison of results year-on-year 
                                         without the potentially distorting 
                                         effects of significant one-off 
                                         items or items which do not relate 
                                         to the underlying performance 
                                         of the Group. 
 
                                         Adjusted profit after tax is used 
                                         in determining cash conversion, 
                                         a long-term target for the Group. 
                    -----------------  ------------------------------------------------------------  ----------------- 
  Income statement - tax measures 
 Effective           No direct          Tax expense for the year per the                              See section b 
  tax rate            equivalent         income statement expressed as                                 below. 
                                         a percentage of profit before 
                                         tax. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Effective           No direct          Tax expense for the year per the                              See section b 
 tax rate             equivalent         income statement adjusted for                                below. The tax 
 before                                  the tax effect of exceptional                                effect of 
 exceptional                             items, expressed as a percentage                             exceptional 
 items                                   of profit before tax and exceptional                         items is 
                                         items.                                                       provided 
                                                                                                      in note 11 of 
                                         This provides an indication of                               the notes to 
                                         the ongoing tax rate across the                              the Interim 
                                         Group.                                                       Report. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Effective           No direct          Tax expense for the year per the                              See section b 
  tax rate            equivalent         income statement adjusted for                                below. The tax 
  on adjusted                            the tax effect of exceptional                                effects of 
  profit before                          and normalised items, expressed                              exceptional 
  tax                                    as a percentage of profit before                             and normalised 
                                         tax, exceptional and normalised                              items are 
                                         items. The tax on normalised items                           provided 
                                         includes the benefit from tax                                in note 11 of 
                                         deductible goodwill and intangibles.                         the notes to 
                                                                                                      the Interim 
                                         This provides an indication of                               Report. 
                                         the ongoing tax rate across the 
                                         Group. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 Income statement presentations 
 Pro forma           Group              Pro forma financial information                               See section d 
                      GAAP results      does not represent the enlarged                                below. 
                                        Group's actual results and does 
                                        not purport to represent what 
                                        the combined results would have 
                                        been. 
 
                                        Pro forma results are presented 
                                        to provide a year-on-year performance 
                                        comparison for the newly enlarged 
                                        Group. 
 
                                        Non-market performance conditions 
                                        for LTIPs granted in the year-ended 
                                        31 March 2021 and the six months 
                                        ended 30 September 2021 have been 
                                        set using pro forma results as 
                                        a baseline for measuring growth 
                                        over the vesting period. 
 
                                        Non-market performance conditions 
                                        for unvested LTIPs granted in 
                                        years prior to the year-ended 
                                        31 March 2021 have been revised 
                                        to incorporate pro forma results. 
 
                                        Six months ended 30 September 
                                        2021 
                                        Pro forma results for the six 
                                        months ended 30 September 2021 
                                        are prepared on an adjusted basis 
                                        and modified for the deferred 
                                        revenue haircut acquisition accounting 
                                        adjustment made on acquisition 
                                        of OSIsoft, LLC. 
 
                                        Six months ended 30 September 
                                        2020 
                                        Pro forma results for the six 
                                        months ended 30 September 2020 
                                        have been prepared on the basis 
                                        that: 
                                         *    The financial information is the combination of the 
                                              consolidated financial statements of AVEVA Group plc 
                                              and OSIsoft, LLC for the six months to 30 September 
                                              2020. 
 
 
                                         *    No pro forma adjustments have been made to reflect 
                                              synergies or cost savings that may be expected to 
                                              occur as a result of the acquisition, nor have any 
                                              adjustments been made to reflect the stand-alone 
                                              costs expected. 
 
 
                                         *    There has been no trading between the two groups for 
                                              either of the years presented. 
 
 
                                         *    The term loan was entered into on 1 April 2020, and 
                                              interest accrued from that date. 
 
 
 
                                        Pro forma organic constant currency 
                                        Pro forma organic constant currency 
                                        results are prepared on the same 
                                        basis as detailed above and additionally: 
                                         *    Results for the six months ended 30 September 2021 
                                              are translated at the comparative period exchange 
                                              rates. 
 
 
                                         *    Results for disposed businesses are excluded from the 
                                              current and prior year. 
 
 
 
                                        Pro forma adjusted diluted EPS 
                                        The pro forma adjusted diluted 
                                        EPS calculation assumes: 
                                         *    Rights issue shares were issued on 1 April 2020. 
 
 
                                         *    Rights issue adjustments for unexercised share 
                                              options at the date of the rights issue were made at 
                                              the later of 1 April 2020 and the share option award 
                                              date. 
 
 
                                         *    No timing adjustments made for actual or potential 
                                              share option awards to OSIsoft employees. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 
   a)   Constant currency revenue 

Pro forma revenue by fee type

 
                                                                      Total 
                                                                  recurring   Perpetual 
                                    Subscription   Maintenance      revenue    licences   Services   Total 
                                            GBPm          GBPm         GBPm        GBPm       GBPm    GBPm 
---------------------------------  -------------  ------------  -----------  ----------  ---------  ------ 
 Six months ended 30 September 
  2021 
 Statutory revenue at actual 
  rates                                    134.1         162.7        296.8       127.6       56.5   480.9 
 Revenue haircut                             0.2          34.8         35.0         0.2          -    35.2 
---------------------------------  -------------  ------------  -----------  ----------  ---------  ------ 
 Pro forma revenue at actual 
  rates                                    134.3         197.5        331.8       127.8       56.5   516.1 
 Impact of foreign exchange                  8.2          17.0         25.2        12.2        3.4    40.8 
---------------------------------  -------------  ------------  -----------  ----------  ---------  ------ 
 Pro forma revenue at constant 
  currency rates                           142.5         214.5        357.0       140.0       59.9   556.9 
 Disposal of business                          -         (0.6)        (0.6)       (0.1)      (0.1)   (0.8) 
 Pro forma organic revenue at 
  constant currency rates                  142.5         213.9        356.4       139.9       59.8   556.1 
---------------------------------  -------------  ------------  -----------  ----------  ---------  ------ 
 
 Six months ended 30 September 
  2020 
 Statutory revenue at actual 
  rates                                    113.9          99.6        213.5        61.7       57.4   332.6 
 Pre-acquisition OSIsoft revenue 
  at actual rates                            9.8         109.9        119.7        58.1        1.8   179.6 
 Pro forma revenue at actual 
  rates                                    123.7         209.5        333.2       119.8       59.2   512.2 
 Disposal of business                          -         (0.8)        (0.8)       (0.8)      (0.3)   (1.9) 
---------------------------------  -------------  ------------  -----------  ----------  ---------  ------ 
 Pro forma organic revenue at 
  actual rates                             123.7         208.7        332.4       119.0       58.9   510.3 
---------------------------------  -------------  ------------  -----------  ----------  ---------  ------ 
 
 Pro forma change at actual 
  rates                                     8.6%        (5.7)%       (0.4)%        6.7%     (4.6)%    0.8% 
 Pro forma change at constant 
  currency                                 15.2%          2.4%         7.1%       16.9%       1.2%    8.7% 
 Pro forma change at organic 
  constant currency                        15.2%          2.5%         7.2%       17.6%       1.5%    9.0% 
---------------------------------  -------------  ------------  -----------  ----------  ---------  ------ 
 

Pro forma revenue by geographic region

 
                                              Americas   Asia Pacific     EMEA   Total 
                                                  GBPm           GBPm     GBPm    GBPm 
-------------------------------------------  ---------  -------------  -------  ------ 
 Six months ended 30 September 2021 
 Statutory revenue at actual rates               204.4          115.0    161.5   480.9 
 Revenue haircut                                  20.9            3.6     10.7    35.2 
-------------------------------------------  ---------  -------------  -------  ------ 
 Pro forma revenue at actual rates               225.3          118.6    172.2   516.1 
 Impact of foreign exchange                       19.4            9.5     11.9    40.8 
-------------------------------------------  ---------  -------------  -------  ------ 
 Pro forma revenue at constant currency 
  rates                                          244.7          128.1    184.1   556.9 
 Disposal of business                                -          (0.2)    (0.6)   (0.8) 
 Pro forma organic revenue at constant 
  currency rates                                 244.7          127.9    183.5   556.1 
-------------------------------------------  ---------  -------------  -------  ------ 
 
 Six months ended 30 September 2020 
 Statutory revenue at actual rates               118.3           87.1    127.2   332.6 
 Pre-acquisition OSIsoft revenue at actual 
  rates                                          103.0           25.2     51.4   179.6 
 Pro forma revenue at actual rates               221.3          112.3    178.6   512.2 
 Disposal of business                                -          (0.6)    (1.3)   (1.9) 
-------------------------------------------  ---------  -------------  -------  ------ 
 Pro forma organic revenue at actual 
  rates                                          221.3          111.7    177.3   510.3 
-------------------------------------------  ---------  -------------  -------  ------ 
 
 Pro forma change at actual rates                 1.8%           5.6%   (3.6)%    0.8% 
 Pro forma change at constant current            10.6%          14.1%     3.1%    8.7% 
 Pro forma change at organic constant 
  currency                                       10.6%          14.5%     3.5%    9.0% 
-------------------------------------------  ---------  -------------  -------  ------ 
 
   b)   Effective tax rate 
 
                                                                  Six months ended    Year ended 
                                                                    30 September        31 March 
                                                                ------------------- 
                                                                      2021     2020         2021 
                                                                      GBPm     GBPm         GBPm 
--------------------------------------------------------------  ----------  -------  ----------- 
 Profit 
 (Loss)/profit before tax                                           (80.3)   (24.2)         34.2 
 Exceptional items                                                    34.2     29.0         78.5 
--------------------------------------------------------------  ----------  -------  ----------- 
 (Loss)/Profit before tax and exceptional items                     (46.1)      4.8        112.7 
 Normalised items 
 
   *    Amortisation of intangibles (excluding other 
        software)                                                    115.7     45.8         95.7 
 
   *    Share-based payments                                          14.1      4.6         16.3 
 
   *    Loss/(gain) on fair value of forward foreign exchange 
        contracts                                                      0.3      0.1        (0.7) 
--------------------------------------------------------------  ----------  -------  ----------- 
 Profit before tax, exceptional items, and normalised 
  items                                                               84.0     55.3        224.0 
--------------------------------------------------------------  ----------  -------  ----------- 
 
 Income tax 
 Income tax expense/(credit)                                           1.2    (3.9)          9.4 
 Tax effect on exceptional items                                       5.9      4.2         15.1 
--------------------------------------------------------------  ----------  -------  ----------- 
 Income tax expense before exceptional items                           7.1      0.3         24.5 
 Tax effect on normalised items                                     (10.3)      9.2         23.0 
--------------------------------------------------------------  ----------  -------  ----------- 
 Income tax (credit)/expense before exceptional 
  items and normalised items                                         (3.2)      9.5         47.5 
--------------------------------------------------------------  ----------  -------  ----------- 
 
 Effective tax rate 
 Income tax expense/(credit)                                           1.2    (3.9)          9.4 
 (Loss)/profit before tax                                           (80.3)   (24.2)         34.2 
--------------------------------------------------------------  ----------  -------  ----------- 
 Effective tax rate                                                 (1.5)%    16.1%        27.5% 
--------------------------------------------------------------  ----------  -------  ----------- 
 
 Effective tax rate before exceptional items 
 Income tax expense before exceptional items                           7.1      0.3         24.5 
 (Loss)/Profit before tax and exceptional items                     (46.1)      4.8        112.7 
--------------------------------------------------------------  ----------  -------  ----------- 
 Effective tax rate before exceptional items                       (15.4)%     6.3%        21.7% 
--------------------------------------------------------------  ----------  -------  ----------- 
 
 Effective tax rate on profit before tax, exceptional items, 
  and normalised items 
 Income tax (credit)/expense before exceptional 
  items and normalised items                                         (3.2)      9.5         47.5 
 Profit before tax, exceptional items, and normalised 
  items                                                               84.0     55.3        224.0 
--------------------------------------------------------------  ----------  -------  ----------- 
 Effective tax rate on profit before tax, exceptional 
  items, and normalised items                                       (3.8)%    17.2%        21.2% 
--------------------------------------------------------------  ----------  -------  ----------- 
 
   c)   Adjusted and constant currency cost 
 
                                                        Operating expenses 
                                                                                    Net impairment 
                                                         Selling                         loss from 
                         Cost         Research               and   Administrative        financial     Other 
                     of sales    & Development      distribution         expenses           assets    income     Total 
                         GBPm             GBPm              GBPm             GBPm             GBPm      GBPm      GBPm 
-----------------  ----------  ---------------  ----------------  ---------------  ---------------  --------  -------- 
 Six months ended 30 September 2021 
 Statutory cost 
  at actual 
  rates                 106.7            164.9             157.5            112.5            (4.1)      17.7     555.2 
 Amortisation 
  excl. 
  other software            -           (84.0)            (31.7)                -                -         -   (115.7) 
 Share-based 
  payments                  -                -                 -           (14.1)                -         -    (14.1) 
 Loss on FX 
  contracts                 -                -                 -            (0.3)                -         -     (0.3) 
 Exceptional 
  items                 (0.1)                -             (2.7)           (13.7)                -    (17.7)    (34.2) 
-----------------  ----------  ---------------  ----------------  ---------------  ---------------  --------  -------- 
 Adjusted costs 
  at actual 
  rates                 106.6             80.9             123.1             84.4            (4.1)         -     390.9 
 Impact of 
  foreign 
  exchange                7.0              5.7               8.2              7.3              0.2         -      28.4 
-----------------  ----------  ---------------  ----------------  ---------------  ---------------  --------  -------- 
 Adjusted costs 
  at constant 
  currency rates        113.6             86.6             131.3             91.7            (3.9)         -     419.3 
 Disposal of 
  business              (0.4)            (0.2)                 -                -                -         -     (0.6) 
-----------------  ----------  ---------------  ----------------  ---------------  ---------------  --------  -------- 
 Organic costs at 
  constant 
  currency rates        113.2             86.4             131.3             91.7            (3.9)         -     418.7 
-----------------  ----------  ---------------  ----------------  ---------------  ---------------  --------  -------- 
 
 Six months ended 30 September 2020 
 Statutory cost 
  at actual 
  rates                  83.9             92.7             103.2             78.3              0.8     (3.1)     355.8 
 Amortisation 
  excl. 
  other software            -           (32.3)            (13.5)                -                -         -    (45.8) 
 Share-based 
  payments                  -                -                 -            (4.6)                -         -     (4.6) 
 Loss on FX 
  contracts                 -                -                 -            (0.1)                -         -     (0.1) 
 Exceptional 
  items                 (0.2)            (0.1)             (1.6)           (30.2)                -       3.1    (29.0) 
-----------------  ----------  ---------------  ----------------  ---------------  ---------------  --------  -------- 
 Adjusted costs 
  at actual 
  rates                  83.7             60.3              88.1             43.4              0.8         -     276.3 
 Pre-acquisition 
  OSIsoft 
  costs at actual 
  rates                  26.5             29.0              42.0             34.4              0.1         -     132.0 
-----------------  ----------  ---------------  ----------------  ---------------  ---------------  --------  -------- 
 Pro forma costs 
  at 
  actual rates          110.2             89.3             130.1             77.8              0.9         -     408.3 
 Disposal of 
  business              (0.4)            (0.2)                 -                -                -         -     (0.6) 
-----------------  ----------  ---------------  ----------------  ---------------  ---------------  --------  -------- 
 Pro forma 
  organic costs 
  at actual rates       109.8             89.1             130.1             77.8              0.9         -     407.7 
-----------------  ----------  ---------------  ----------------  ---------------  ---------------  --------  -------- 
 
 Pro forma change 
  at 
  actual rates         (3.3)%           (9.4)%            (5.4)%             8.5%         (555.6)%         -    (4.3)% 
 Pro forma change 
  at 
  constant 
  currency               3.1%           (3.0)%              0.9%            17.9%         (533.3)%         -      2.7% 
 Pro forma change 
  at 
  organic 
  constant 
  currency               3.1%           (3.0)%              0.9%            17.9%         (533.3)%         -      2.7% 
-----------------  ----------  ---------------  ----------------  ---------------  ---------------  --------  -------- 
 
   d)   Pro forma results 

6 months ended 30 September 2021

 
                                                                                                                               Pro 
                                                                                           Impact        Pro                 forma 
                                                                                               of      forma   Disposal    organic 
                               Normalised   Exceptional              Revenue       Pro    foreign   constant         of   constant 
                   Statutory        items         items   Adjusted   haircut     forma   exchange   currency   business   currency 
                        GBPm         GBPm          GBPm       GBPm      GBPm      GBPm       GBPm       GBPm       GBPm       GBPm 
----------------  ----------  -----------  ------------  ---------  --------  --------  ---------  ---------  ---------  --------- 
 Revenue               480.9            -             -      480.9      35.2     516.1       40.8      556.9      (0.8)      556.1 
 Cost of sales       (106.7)            -           0.1    (106.6)         -   (106.6)      (7.0)    (113.6)        0.4    (113.2) 
----------------  ----------  -----------  ------------  ---------  --------  --------  ---------  ---------  ---------  --------- 
 Gross profit          374.2            -           0.1      374.3      35.2     409.5       33.8      443.3      (0.4)      442.9 
 Operating expenses 
 Research & 
  Development 
  costs              (164.9)         84.0             -     (80.9)         -    (80.9)      (5.7)     (86.6)        0.2     (86.4) 
 Selling and 
  administrative 
  expenses           (270.0)         46.1          16.4    (207.5)         -   (207.5)     (15.5)    (223.0)          -    (223.0) 
 Net impairment 
  loss on 
  financial 
  assets                 4.1            -             -        4.1         -       4.1      (0.2)        3.9          -        3.9 
 Other expense        (17.7)            -          17.7          -         -         -          -          -          -          - 
----------------  ----------  -----------  ------------  ---------  --------  --------  ---------  ---------  ---------  --------- 
 Total operating 
  expenses           (448.5)        130.1          34.1    (284.3)         -   (284.3)     (21.4)    (305.7)        0.2    (305.5) 
----------------  ----------  -----------  ------------  ---------  --------  --------  ---------  ---------  ---------  --------- 
 (Loss)/profit 
  from 
  operations          (74.3)        130.1          34.2       90.0      35.2     125.2       12.4      137.6      (0.2)      137.4 
 Finance revenue         0.7            -             -        0.7         -       0.7          -        0.7          -        0.7 
 Finance expense       (6.7)            -             -      (6.7)         -     (6.7)      (0.5)      (7.2)          -      (7.2) 
----------------  ----------  -----------  ------------  ---------  --------  --------  ---------  ---------  ---------  --------- 
 (Loss)/profit 
  before tax          (80.3)        130.1          34.2       84.0      35.2     119.2       11.9      131.1      (0.2)      130.9 
----------------  ----------  -----------  ------------  ---------  --------  --------  ---------  ---------  ---------  --------- 
 

6 months ended 30 September 2020

 
                                                                                           Term             Disposal       Pro 
                               Normalised   Exceptional              Pre-acquisition       loan       Pro         of     forma 
                   Statutory        items         items   Adjusted           OSIsoft   interest     forma   business   organic 
                        GBPm         GBPm          GBPm       GBPm              GBPm       GBPm      GBPm       GBPm      GBPm 
----------------  ----------  -----------  ------------  ---------  ----------------  ---------  --------  ---------  -------- 
 Revenue               332.6            -             -      332.6             179.6          -     512.2      (1.9)     510.3 
 Cost of sales        (83.9)            -           0.2     (83.7)            (26.5)          -   (110.2)        0.4   (109.8) 
----------------  ----------  -----------  ------------  ---------  ----------------  ---------  --------  ---------  -------- 
 Gross profit          248.7            -           0.2      248.9             153.1          -     402.0      (1.5)     400.5 
 Operating expenses 
 Research & 
  Development 
  costs               (92.7)         32.3           0.1     (60.3)            (29.0)          -    (89.3)        0.2    (89.1) 
 Selling and 
  administrative 
  expenses           (181.5)         18.2          31.8    (131.5)            (76.4)          -   (207.9)          -   (207.9) 
 Net impairment 
  loss on 
  financial 
  assets               (0.8)            -             -      (0.8)             (0.1)          -     (0.9)          -     (0.9) 
 Other income            3.1            -         (3.1)          -                 -          -         -          -         - 
----------------  ----------  -----------  ------------  ---------  ----------------  ---------  --------  ---------  -------- 
 Total operating 
  expenses           (271.9)         50.5          28.8    (192.6)           (105.5)          -   (298.1)        0.2   (297.9) 
----------------  ----------  -----------  ------------  ---------  ----------------  ---------  --------  ---------  -------- 
 (Loss)/profit 
  from 
  operations          (23.2)         50.5          29.0       56.3              47.6          -     103.9      (1.3)     102.6 
 Finance revenue         0.1            -             -        0.1               0.1          -       0.2          -       0.2 
 Finance expense       (1.1)            -             -      (1.1)             (0.6)      (7.8)     (9.5)          -     (9.5) 
----------------  ----------  -----------  ------------  ---------  ----------------  ---------  --------  ---------  -------- 
 (Loss)/profit 
  before tax          (24.2)         50.5          29.0       55.3              47.1      (7.8)      94.6      (1.3)      93.3 
----------------  ----------  -----------  ------------  ---------  ----------------  ---------  --------  ---------  -------- 
 

Adjusted diluted earnings per share

Pro forma earnings per share is calculated based upon the following number of ordinary shares adjusted for the effect of dilution:

 
                                                      Six months ended         Year ended 
                                                         30 September            31 March 
                                                 -------------------------- 
                                                         2021          2020          2021 
                                                       number        number        number 
-----------------------------------------------  ------------  ------------  ------------ 
 Weighted average number of ordinary shares 
  adjusted for the effect of dilution             302,860,611   202,031,704   220,020,467 
 Adjustment for timing of rights issue(1)                   -   100,303,142    82,337,239 
-----------------------------------------------  ------------  ------------  ------------ 
 Pro forma weighted average number of ordinary 
  shares adjusted for the effect of dilution      302,860,611   302,334,846   302,357,706 
-----------------------------------------------  ------------  ------------  ------------ 
 

1. Adjustment to timing of incremental paid for shares issued as a result of the November 2020 rights issue, as if the rights issue occurred on 1 April 2020.

Pro forma EPS is calculated using the following profits:

 
                                                        Six months ended    Year ended 
                                                          30 September        31 March 
                                                      ------------------- 
                                                           2021      2020         2021 
                                                           GBPm      GBPm         GBPm 
----------------------------------------------------  ---------  --------  ----------- 
 Pro forma profit before tax                              119.2      94.6        338.7 
 Pro forma income tax                                     (1.2)     (5.5)        (2.8) 
 Pro forma tax effect of normalised and exceptional 
  items, and revenue haircut                              (4.8)      10.6       (17.4) 
 Pro forma profit after tax                               113.2      99.7        318.5 
----------------------------------------------------  ---------  --------  ----------- 
 
 
                                                   Six months ended    Year ended 
                                                     30 September        31 March 
                                                 ------------------- 
                                                      2021      2021         2021 
                                                     pence     Pence        pence 
-----------------------------------------------  ---------  --------  ----------- 
 Pro forma adjusted diluted earnings per share       37.38     32.98       105.34 
-----------------------------------------------  ---------  --------  ----------- 
 

Responsibility Statement of the Directors

in respect of the Interim Report

The Directors of the Company confirm that to the best of our knowledge:

   --        the Interim Report has been prepared in accordance with IAS 34; 

-- the Interim Report includes a fair review of the information required by DTR 4.2.7R, being an indication of the important events that have occurred during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the year; and

-- the Interim Report includes a fair review of the information required by DTR 4.2.8R, being disclosure of related party transactions and changes therein since the last Annual Report.

The Directors of the Company are consistent with those listed in the 2021 Annual Report and Accounts, except for:

   --        the resignation of Craig Hayman with effect 7 July 2021; 

-- the appointment of Hilary Maxson as a Non-Executive Director with effect 1 August 2021; and

-- the appointment of Dr Ayesha Khanna as an independent Non-Executive Director with effect 28 October 2021.

A list of current directors is maintained on the Company's website www.aveva.com.

By order of the Board

 
 Peter Herweck 
  Chief Executive Officer 
 
   9 November 2021 
 

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November 10, 2021 02:00 ET (07:00 GMT)

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