Aveva shares plunge by a fifth as it warns over pound's strength and contract delays

The company, which makes computer programs used in the design of ships and energy plants, said sterling’s strength and the timing of renewals of rentals for its products would reduce revenues by £14m in the first half of the year.

“We have seen a temporary impact from the now completed sales force reorganisation announced in April 2014 and mixed levels of customer activity regionally, with a reduction in demand in South America and parts of Asia, set against double-digit growth in China,” the company said in a trading update issued on Friday.

“We have seen no change in the competitive environment during the period," it added. "As a result of these factors, reported first-half revenue is expected to be in the range of £84m to £90m, dependent on the timing of contract signings.”

The second half would see a better performance, Aveva said, as rental renewals would now fall in the later part of the year, though the group is now reviewing its plans for discretionary spending and adding staff.

Analysts at Liberum said the forecast was below consensus of £107m, and they expected estimates to be cut.

Panmure cut its target price on the shares to £21.22 from £22.49, with a rating of “hold”, and Numis reduced its rating from “buy” to “add”.

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