Delcam Plc Interim Report 2005

Interim Results for the six months to 30 June 2005


  • Record first half sales of £11.8 million against £10.6 million in 2004 first half
  • Record first half pre-tax profit of £0.8 million, up 21% on first half of 2004
  • Interim dividend increased to 1.1p, up 10%
  • Continued high level of investment in R&D and in sales and marketing
  • Winner of Queen’s Award for Enterprise for third year in succession
  • Acquisition of FeatureCAM business in March
  • Position as leading global supplier of specialist NC software confirmed by CIMdata
 

Chairman’s Statement


Financial Highlights

I am very pleased to report that, during the first half of 2005, Delcam has continued the growth in sales that has been seen in recent years. Sales for the half-year to 30 June 2005 were at the record level for a first half at £11.8 million compared with £10.6 million during the first half of 2004, an increase of 11%.

Profit before tax of £0.80 million for the first half was 21% above the £0.66 million achieved during the first half of last year. This result has been achieved even though the Company has continued to increase its investment in product development and in sales and marketing. Basic earnings per share were 11.0p compared with 8.6p in the equivalent period last year, an increase of 28%.

Dividend

With improved profitability to that in the first half of 2004, the Board proposes to pay an interim dividend of 1.1p per ordinary share (2004 — 1p per ordinary share), which will be paid on 16 September 2005.

Review

In July we were formally presented with our fourth Queen’s Award for Enterprise. We were particularly pleased to become one of very few companies to win a Queen’s Award for Enterprise for the third year in succession. Our 2005 Award was in the International Trade category in recognition of the continuing growth in worldwide sales of our Power Solution software. This latest recognition of the Company’s successful development and commercialisation strategies follows our receipt of Queen’s Awards in the Innovation category in 2003 for the ArtCAM engraving and routing software and in 2004 for the PowerINSPECT inspection software. Sales partners from 35 countries attended the presentation.

In March we were very pleased to welcome the staff of Engineering Geometry Systems from Salt Lake City to Delcam. The company, now renamed Delcam USA, is the developer of the FeatureCAM range of CADCAM software. This has expanded the variety of software available from our Company and so made us better able to meet the needs of a wider range of customers, it will also give Delcam a much stronger presence in the large North American market. The FeatureCAM software has little overlap with our established Power Solution range and will continue to be developed in Salt Lake City. While there will be some opportunities to improve both sets of products by sharing technology, the more significant benefits to future profitability will come through being able to expand FeatureCAM’s international presence by offering the software through a number of Delcam’s established resellers.

2005 has also seen an increase in the volume of business with Original Equipment Manufacturers; new contracts have been signed that enable our engraving, routing and inspection software programs to be supplied by manufacturers of related equipment. These contracts typically involve much larger volumes of software than we would supply in our normal relationships.

Outlook

The first half of the year saw improved sales in most of our overseas markets. North and South America, and the Asian countries continued to do well. European sales grew despite the ongoing movement of manufacturing to countries in Eastern Europe and Asia. Our business in the aerospace sector continues to show potential. We expect similar positive trends in the second half of the year, which should allow us to continue our improved performance.

T R M KINSEY
Chairman
9 August 2005

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