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- Delcam Plc Interim Report 2003
Delcam Plc Interim Report 2003
Interim Results for the six months to 30 June 2003
- Record half-year sales of £9.8 million against £9.5 million in H1 2002
- Pre-tax interim profit of £0.5 million, similar to H1 2002
- Interim dividend of 0.95p maintained
- Growth in software and maintenance revenues in first half
- Continued high level of investment in R&D
- Winner of Queen’s Award for Enterprise in the Innovation category
- Positioned by CIMdata as world's leading international supplier of specialist NC software and associated services
Chairman's Statement
Financial Highlights
I am very pleased to report that, during the first half of 2003, Delcam has continued the growth in sales that was seen last year. Sales for the half year to 30 June 2003 were at the record level of £9.8 million compared with £9.5 million during the first half of 2002, an increase of 3%, despite difficult general trading conditions and a number of external factors that disrupted our business.
Profit before tax of £0.5 million was similar to the first half of last year as the company continued to increase investment in R&D and in sales and marketing. Basic earnings per share were 6.4p compared with 6.1p in the equivalent period last year.
Dividend
With similar profitability to that in the first half of 2002, the Board proposes to maintain an interim dividend of 0.95p per ordinary share. It will be paid on 16 September 2003 to shareholders on the Register as at 29 August 2003. The shares are expected to be quoted ex dividend on 27 August 2003.
Review
The first half of this year has seen poor economic conditions for manufacturing industry in a number of the territories in which we operate. In addition, a number of external factors, in particular, the conflict in Iraq and the SARS epidemic, have delayed orders with an impact on our sales performance. The increase in sales, achieved in the face of these difficulties, should be considered as a very good result.
We continue to believe that it is essential to enhance our development activity as we seek to further increase sales by having the best products in all of the sectors in which we operate. During this period R & D costs increased by over £250k over the same period last year and now represents 25% of turnover. This increased investment continues to limit our profitability in the short term but we remain confident it will lead to increased long-term profitability.
We have outlined a strategy to increase sales further with three main strands: firstly to develop our reputation as a supplier of product development solutions, rather than just as a CADCAM developer; secondly to grow our business outside the mould and die area, both in other areas of toolmaking and in other industries; and thirdly to increase our sales to larger organisations as well as to smaller and medium-sized companies.
In 2002, we announced the establishment of a consultancy group to tailor our
software for specific applications of our customers operating in a broad range
of industries, including the medical, footwear and aerospace markets. This group
has already won a number of contracts and we expect this to be a growth area
for the business in the future.
We were honoured to win a Queen’s Award for Enterprise in the Innovation
category. While this was awarded specifically in recognition of the continuing
innovation in our ArtCAM software, our leading product for the engraving, jewellery
and signmaking industries, it recognises the high level of innovation of all
our development staff.
Outlook
The general outlook for the second half of the year is in line with the Board’s expectations, although the events of the last six months have shown how external factors can quickly impact our forecasted performance. Historically, our results have been biased towards the second half of our financial year. Although this was not the case during 2001 or 2002, we believe that we will return to this trading pattern in the future.
T R M KINSEY
Chairman
14 August 2003
