Specialist software developer Delcam (DLC) has reported record sales figures, fuelled by impressive growth in its software licence and maintenance divisions. The former grew revenue by 10 per cent to £12.7m, while a push to encourage new customers to subscribe to maintenance contracts, along with a wave of product releases, helped sales in the latter jump 18 per cent to £8.1m. Services revenue was also robust, up 9 per cent to £3.1m.
Trading in these three divisions more than offset a 34 per cent drop in other income streams to £1.1m, which reflected a reduction in low-margin hardware sales. Meanwhile, a 60 per cent fall in the cost of sales, coupled with currency gains, boosted margins, helping lift the operating profit by 34 per cent to £2.7m.
Elsewhere, Delcam invested 23 per cent of revenue in research and development, which has already led to new products. Administration costs rose by £800,000 as the company beefed up marketing and expanded its global sales network, including a new subsidiary in Mexico and sales office in Illinois, USA. Distribution costs rose as a result, but if Delcam can sell more software margins will improve further.
Numis Securities expects pre-tax profit for the full year of £5.8m, giving EPS of 61.7p (2012: £5.1m and 55.6p)
| DELCAM (DLC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,655p | MARKET VALUE: | £131m | |
| TOUCH: | 1,625-1,685p | 12-MONTH HIGH: | 1,655p | LOW: 756p |
| DIVIDEND YIELD: | 0.62% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 252p | NET CASH: | £11.2m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 22.9 | 2.09 | 26.2 | 2.50 |
| 2013 | 25.0 | 2.83 | 30.8 | 3.25 |
| % change | +9 | +35 | +18 | +30 |
Ex-div: 21 Aug Payment: 9 Sep | ||||
