Design software specialist Delcam enjoyed record sales for the fourth consecutive six month period during the second half of 2011 and posted profits 12 per cent higher than broker's recently upgraded forecasts. This impressive performance didn’t even falter during the eurozone crisis and prompted WH Ireland to upgrade 2012 EPS by a further 3 per cent to 43.6p, pencilling in 52.4p in 2013 - yet the shares remain reasonably rated.
Delcam's diverse global reach clearly helped - the company has more than 35,000 customers in industries ranging from aerospace and automotive manufacturing to footwear and dental - as did the resilience of sales into Europe in the second half. Delcam's Italian subsidiary enjoyed its best ever year and Germany representing its second biggest sales channel at 10 per cent of total royalties. Meanwhile the US enjoyed 14 per cent growth and Delcam's sales into Asia grew by 16 per cent.
Recurring revenues, for software maintenance and support, grew by 12 per cent and now account for almost a third of total sales. The company invests heavily in research and development, equivalent to around a quarter of revenues, to keep new iterations of software feeding into existing customers as well as to hook in new clients.
Delcam has also combined its professional services and tooling operations into a consultancy operation which offers customers process development advice and prototype manufacturing. It also invested in German 3D printing software business Fabbify with a view to adding its software into Delcam's product suite in future.
DELCAM (DLC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 703p | MARKET VALUE: | £ 56m | |
| TOUCH: | 685-720p | 12-MONTH HIGH: | 735p | LOW: 370p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 196p* | NET CASH: | £10.1m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 29.7 | 2.15 | 24.6 | 5.25 |
| 2008 | 32.9 | 2.26 | 21.2 | 5.25 |
| 2009 | 31.8 | 1.09 | 11.4 | 5.25 |
| 2010 | 36.7 | 2.41 | 31.7 | 5.50 |
| 2011 | 41.9 | 3.73 | 40.7 | 7.00 |
| % change | +14 | +55 | +28 | +27 |
Ex-div:28 Mar Payment:14 May * includes intangible assets of £3.37m, or 42p a share | ||||
