Global manufacturing recovery gives Delcam its best first half
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MANUFACTURING software supplier Delcam has announced strong interim results boosted by rising global sales.
Based in Birmingham, the group’s software is used across a variety of industries, including aerospace, automotive, footwear, medical and dental, toys and sports equipment.
Sales were up 13% to £20.1m (2010: £17.8m) – representing the strongest six-month sales performance in the company’s history. Pre-tax profit rose 87% to £1.5m (2010: £0.8m).
The announcement cheered investors with shares rising sharply in early trading.
Recurring sales from software maintenance and support contracts were up by 10% to £6.6m (2010: £6.0m). Recurring income now accounts for 33% of the group’s sales.
With an eye on further growth, the company has also upped its R&D investment to £5.4m (2010: £5m) to support ongoing expansion.
Basic earnings per share rose 102% to 17.6p (2010: 8.7p) and the group has announced an interim dividend of 1.75p (2010: 1.35p), an increase of 30%.
The firm has taken advantage of the continuing recovery in global manufacturing to increase both the sales of new software licences and the take-up of maintenance contracts, especially in the automotive and aerospace industries.
The strongest overall sales have come from the United States and Germany, with the fastest growth in sales of new software licences coming from Asia, in particular from China, Korea, Indonesia and India.
The firm, recently ranked as third largest CAM provider globally and the leading specialist provider by sales, said it was well positioned for the key Q4 trading period although remained wary of the current market volatility.
Peter Miles, Delcam chairman, said: “I am pleased to announce very good first half results, with record interim revenues and an 87% rise in pre-tax profits. The improved sales figures reflect a strengthened performance in the majority of our territories as global manufacturing continues to recover and sets a new high in sales for a six-month period.”
He said significant investment by the group in both product development and marketing had been key to the results, and supported the group’s long-term aim of building its global presence.
“We are hopeful that the upward trend in sales will be sustained in the second half of the year. The final quarter is, traditionally, our strongest period and while we remain confident about the strength of Delcam’s software offering and the global reach of our distribution channels, at this stage in the year, the impact of the current global financial markets on our performance remains difficult to judge with certainty. Notwithstanding this, the company remains financially and operationally well-positioned for growth,” he added.
