REG - Delcam PLC - Half Year Report

Thu Aug 23, 2012 2:00am EDT

* Reuters is not responsible for the content in this press release.

RNS Number : 6022K
Delcam PLC
23 August 2012
 



DLC

                                                                                            

DELCAM PLC

("Delcam" or "the Group")

 

Half Year Report

For the six months to 30 June 2012

 

Delcam is the UK's leading developer and supplier of advanced software solutions for product development, manufacture and metrology. Based in Birmingham, the Group's software is used by more than 35,000 organisations, ranging across a variety of industries, including aerospace, automotive, footwear, medical and dental, toys and sports equipment. 

 

Key Points

 

·     Record half-year results

 

·     Revenues up 15% to £22.9m (2011: £20.0m*) - 5th consecutive six-month period of record revenues

 

·     Pre-tax profit up 67% to £2.09m (2011: £1.25m*) - a new six-month high

 

·     Basic earnings per share up 77% to 26.2p (2011: 14.8p*)

 

·     Unrestricted net cash up 22% to £12.2m (30 June 2011: £10.0m, 31 Dec 2011: £9.4m)

 

·     Interim dividend of 2.50p (2011: 1.75p) to better balance interim and final dividend

 

·     Continuing focus on R&D investment, £5.6m (2011: £5.1m) - to support long-term commercial advantage

 

·     Delcam ranked as third largest CAM software provider globally (and leading specialist supplier) in annual industry survey by CIMdata Inc.

 

·     Remain optimistic for the full year

 

*as restated

 

Peter Miles, Chairman, commented,

 

"I am pleased to report further strong growth in both revenues and profits for the six months to 30 June 2012.  Revenues have increased by 15% over the same period last year to £22.9 million to set a new six-month high, meaning that Delcam has set new revenue records for five consecutive six-month periods.  Pre-tax profits increased by 67% to £2.1 million, also a new six-month high.

 

We remain optimistic that the trading improvements seen in the Group will continue for the remainder of the year, provided that there is no significant deterioration in the general financial climate.  In addition, we believe that our broad range of markets, both in geographic terms and in the number of industries we serve, leaves us better placed to capitalise on our success than the majority of our competitors and so we remain very positive about our prospects." 

 

Enquiries:

Website: www.delcam.com

 

Delcam plc


Clive Martell, Chief Executive

Kulwant Singh, Finance Director

 

 

T: 020 3178 6378 (today)

T: 0121 683 1000 (thereafter)

 

Biddicks


Katie Tzouliadis

Sophie McNulty

 


T: 020 3178 6378

WH Ireland

(NOMAD)


Marc Davies


T: 0117 945 3473

 

 

Chairman's Statement

 

I am pleased to report further strong growth in both revenues and profits for the six months to 30 June 2012.  Revenues have increased by 15% over the same period last year to £22.9 million, to set a new six-month high, and pre-tax profits increased by 67% to £2.1 million, also a new six-month high.

 

Results for the first half continued the rising revenues and profit trends seen over 2011 and 2010 and mean that Delcam has set new revenue records for five consecutive six-month periods. 

 

The increases in both revenues and profits result from improved performance in most of the territories where we operate. This growth supports our policy of investing heavily in both product development and marketing in order to gain long-term commercial advantage. 

 

Financial Results

 

Revenue for the six months to 30 June 2012 increased by 15% to £22.9 million, compared to £20.0 million (as restated) in the first half of last year.  The increase is again driven principally by a further improvement in software licence sales. Maintenance income, derived from software maintenance and support contracts, also grew significantly.  Maintenance revenues continue to represent a predictable recurring income stream and accounted for approximately 30% of overall revenues.

 

In line with our strategy, we continue to focus on product development and invested £5.6 million (2011: £5.1 million) over the period.

 

Profit before tax for the first half rose by 67% to £2.09 million, a significant improvement on the £1.25 million (as restated) generated in the first six months of 2011.  Basic earnings per share rose by 77% to 26.2p against 14.8p (as restated) in the equivalent period of last year. 

 

The balance sheet remains very robust and cash generation is strong, with £2.4 million of cash generated over the period.  This resulted in unrestricted net cash of £12.2 million at the period end (30 June 2011: £10.0 million and 31 December 2011: £9.4 million).

 

Dividend

 

We are pleased to declare an interim dividend of 2.50p per ordinary share (2011: 1.75p).  We have adjusted the interim dividend to give a better balance between the interim and final dividend. The dividend will be paid on 14 September 2012 to shareholders on the Register as at 7 September 2012.  The ex-dividend date is 5 September 2012.

 

Pension

 

The directors have decided to adopt in 2012 the amendments to IAS 19 "Employee Benefits" which become mandatory in 2013, as explained in note 4 to this report. The IAS 19 pension deficit increased during the period by £1.0 million to £4.0 million as at 30 June 2012. 

 

Review

 

Despite the continued uncertainty over the global economy, Delcam has been able to increase both its sales of new software licences and the take-up of software maintenance contracts, not only in its established markets in the automotive and aerospace industries but also in newer markets such as the dental sector.  The strongest overall sales results continue to come from the USA and Germany, with the recovery in manufacturing in the USA making the country one of our fastest-growing markets. We saw good growth in sales of new software licences, in particular from Russia, Korea and India. Our UK subsidiary produced its best sales of software for many years, while sales by our subsidiary in Japan recovered well from the natural disasters experienced by the country in 2011.

 

Our Professional Services subsidiary continues to grow its business, mainly as a result of increased demand for its consultancy and pre-production manufacturing services from the aerospace industry.  The facilities within the Group's Advanced Manufacturing Facility are being expanded with the addition of two more machining centres and an inspection cell for 3D metrology and reverse engineering, representing an investment of £0.9 million.

 

New versions of many of our products have been released already this year, with our continued investment in product development enabling significant enhancements to our software.  We plan further major releases of our software at the largest manufacturing exhibition in the USA, the International Manufacturing Technology Show ("IMTS"), to be held in Chicago in September 2012.

 

The results of our increased investment in marketing can be seen in the growing number of visitors to our websites.  The average number of visits per month has grown by about 40% since January 2011.  We have also increased the range of videos on our www.delcam.tv online television channel, with demonstrations of new functionality in our software featured in Learning Zones within the site. These online resources continue to provide a growing percentage of the enquiries from prospective purchasers of our solutions.

 

In July 2012, we were delighted to be confirmed for the fourth year running as the third largest CAM software provider globally in 2011, with a market share of 7%, behind the market leaders, Dassault Systemes and Siemens PLM Software, with market shares of 19% and 13% respectively.  The confirmation came in the latest NC Software Market Analysis Report from leading US analysts, CIMdata.  The report also named Delcam as the leading specialist supplier of CAM software globally for the twelfth consecutive year.

 

Outlook

 

The first half results were encouraging, especially when considering the level of financial uncertainty that exists within many of our important markets. We remain optimistic that trading improvements seen in the Group will continue for the remainder of the year, provided that there is no significant deterioration in the general financial climate.  We believe that our broad range of markets, both in geographic terms and in the number of industries we serve, leaves us better placed to capitalise on our success than the majority of our competitors and so we remain very positive about our prospects. 

 

Peter Miles

Chairman

 

 

 

CONDENSED CONSOLIDATED INCOME STATEMENT








Unaudited

Six months

Unaudited

Six months

Audited

Year

 


to 30 June 2012

to 30 June

2011

to 31 Dec

2011

 



(restated)

(restated)

 

Notes

£'000

£'000

£'000

Continuing Operations





Revenue

1

22,877

19,972

41,928

Cost of sales


(7,498)

(6,599)

(14,116)

Gross profit


15,379

13,373

27,812

Administrative expenses

Distribution costs

Other operating income

Fair value through profit or loss


(8,125)

(5,298)

46

5

(7,585)

(4,448)

54

(119)

(16,024)

(8,940)

131

111

Operating profit


2,007

1,275

3,090

Share of results of associates


90

56

107

Net finance cost


(7)

(78)

 

(102)

 

Profit before tax


2,090

1,253

3,095

Tax

5

(48)

(126)

(616)

Profit for the period

1

2,042

1,127

2,479






Attributable to





Equity holders of the parent company


2,042

1,127

2,479






Earnings per share





From continuing operations





Basic

2

26.2p

14.8p

32.4p

Diluted

2

25.2p

14.4p

31.4p

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME








Unaudited

Unaudited

Audited



Six months

Six months

Year

 


to 30 June 2012

to 30 June

2011

to 31 Dec

2011

 



(restated)

(restated)

 


£'000

£'000

£'000

 





Profit for the period


2,042

1,127

2,479

Other comprehensive income:





- Foreign currency translation differences


(28)

49

(173)

- Actuarial gains and losses on defined benefit scheme


(1,045)

(609)

(6,147)

- Income tax relating to components of other comprehensive income

 

 

253

 

(494)

 

 

 

810

 

 

Total comprehensive income for the period attributable to equity shareholders


 

1,222

 

73

 

(3,031)

 



CONDENSED CONSOLIDATED BALANCE SHEET



Unaudited

As at

Unaudited

As at

Audited

As at



30 June 2012

30 June

2011

31 Dec

2011




(restated)


Non-current assets

Notes

£'000

£'000

£'000

Goodwill


2,170

2,216

2,170

Other intangible assets


1,073

1,715

1,201

Property, plant and equipment


6,372

6,619

6,421

Interests in associates


1,250

1,198

1,129

Other investments


147

9

9

Deferred tax assets


1,067

-

767

Retirement benefit assets


-

353

-



12,079

12,110

11,697

Current assets





Inventories


705

195

304

Trade and other receivables

Assets held at fair value through profit and loss


9,596

119

9,099

-

8,432

114

Cash and cash equivalents

3

12,566

11,306

10,278



22,986

20,600

19,128






Total assets


35,065

32,710

30,825






Current liabilities





Trade and other payables

Provisions


(6,530)

(910)

(6,871)

(259)

(6,474)

(804)

Current tax liabilities


(272)

(201)

(413)

Borrowings


(113)

(105)

(118)

Deferred income


(6,368)

(5,010)

(4,369)

Liabilities held at fair value through profit and loss


-

(119)

-



(14,193)

(12,565)

(12,178)






Non-current liabilities





Provisions

Retirement benefit obligation


-

(3,964)

(621)

-

-

(2,873)

Deferred tax liabilities


-

(382)

-

Borrowings


-

(120)

(51)

Deferred income


(322)

(126)

(222)



(4,286)

(1,249)

(3,146)






Total liabilities


(18,479)

(13,814)

(15,324)






Net assets


16,586

18,896

15,501






Equity





Share capital


801

801

801

Share premium


8,918

8,918

8,918

Investment in own shares


(616)

(594)

(797)

Revaluation reserve


1,369

1,399

1,383

Capital reserve


9

9

9

Translation reserve


(273)

(23)

(245)

Retained earnings


6,378

8,386

5,432

Total equity attributed to equity holders of the parent


 

16,586

 

18,896

 

15,501

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 


 

Share capital

account

£'000

 

Share premium account

£'000

Invest-ment in own shares

£'000

 

 

Capital reserves

£'000

 

Revalua-tion reserve

£'000

 

Transla-tion reserve

£'000

 

 

Retained earnings

£'000

 

 

 

Total

£'000

 

At 1 January 2011

 

779

 

8,078

 

(633)

 

9

 

1,410

 

(72)

 

8,613

 

18,184

Dividends paid

-

-

-

-

-

-

(321)

(321)

Issue of new shares

22

840

-

-

-

-

-

862

Investment in own shares

-

-

39

-

-

-

-

39

Share based payments

-

-

-

-

-

-

59

59

Transactions with owners

22

840

39

-

-

-

(262)

639


 







 

Profit for the period (as restated - note 4)

Other comprehensive income:

 

-

 

-

 

-

 

-

 

-

 

-

 

1,127

 

1,127

Exchange rate differences

-

-

-

-

-

49

-

49

Actuarial gains and losses (as restated - note 4)

 

-

 

-

 

-

 

-

 

-

 

-

 

 (609)

 

(609)

Deferred tax

-

-

-

-

5

-

(499)

(494)

Transfers

-

-

-

-

(16)

-

16

-

Total comprehensive income

 

-

 

-

 

-

 

-

 

(11)

 

49

 

35

 

73

As at 30 June 2011

801

8,918

(594)

9

1,399

(23)

8,386

18,896


 








Dividends paid

-

-

-

-

-

-

(135)

(135)

Investment in own shares

-

-

(203)

-

-

-

-

(203)

Exercise of share options

-

-

-

-

-

-

(12)

(12)

Share based payments

-

-

-

-

-

-

59

59

Transactions with owners

-

-

(203)

-

-

-

(88)

(291)

Profit for the period (as restated - note 4)

 

-

 

-

 

-

 

-

 

-

 

-

 

1,352

 

1,352

Other comprehensive income:

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Exchange rate differences

-

-

-

-

-

(222)

-

(222)

Actuarial gains and losses (as restated - note 4)

 

-

 

-

 

-

 

-

 

 -

 

-

 

 (5,538)

 

(5,538)

Deferred tax

-

-

-

-

-

-

1,304

1,304

Transfers

-

-

-

-

(16)

-

16

-

Total comprehensive income

 

-

 

-

 

-

 

-

 

(16)

 

(222)

 

(2,866)

 

(3,104)

As at 31 December 2011

801

8,918

(797)

9

1,383

(245)

5,432

15,501


 








Dividends paid

-

-

-

-

-

-

(417)

(417)

Investment in own shares

-

-

181

-

-

-

-

181

Exercise of share options

-

-

-

-

-

-

3

3

Share based payment

-

-

-

-

-

-

96

96

Transactions with owners

-

-

181

-

-

-

(318)

(137)

Profit for the period

-

-

-

-

-

-

2,042

2,042

Other comprehensive income:

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Exchange rate differences

-

-

-

-

-

(28)

-

(28)

Actuarial gains and losses

 -

 -

 -

 -

 -

 -

 (1,045)

 (1,045)

Deferred tax

-

-

-

-

2

-

251

253

Transfers

-

-

-

-

(16)

-

16

-

Total comprehensive income

 

-

 

-

 

-

 

-

 

(14)

 

(28)

 

1,264

 

1,222

As at 30 June 2012

801

8,918

(616)

9

1,369

(273)

6,378

16,586


 








 



 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

 








Unaudited

Six months to 30 June 2012

Unaudited Six months

to 30 June 2011

Audited

Year

to 31 Dec

2011




(restated)




£'000

£'000

£'000






Operating profit from continuing operations


2,007

1,275

3,090

Adjustments for:





Depreciation, amortisation and impairment


552

635

1,514

(Profit)/loss on sale of tangible fixed assets


(20)

25

19

Fair value through profit and loss


(5)

121

(111)

Share based payments


96

59

118

Foreign exchange


(120)

-

66

Current net pension service cost


23

-

102

Operating cash inflow before working capital movements


 

2,533

 

2,115

 

4,798

Movement in working capital


1,370

1,220

1,130

Cash generated by operations


3,903

3,335

5,928






Pension payments

Taxation paid


(78)

(189)

(2,500)

(103)

(5,000)

(226)

Net interest received


94

7

69

Cash inflow from operating activities


3,730

739

771






Investing activities





Purchases of fixed assets and investments


(458)

(426)

(610)

Proceeds from sale of plant and equipment and available for sale non current assets


 

22

 

450

 

455

Expenditure on product development


(99)

(174)

(151)

Acquisition of investment in associates


-

-

(5)

Net cash used in investing activities


(535)

(150)

(311)






Financing activities





Dividends paid


(417)

(321)

(456)

Net proceeds on issue of new shares


-

862

862

Capital element of finance leases


(56)

(448)

(505)

Restricted cash movement


(373)

(644)

(1,067)

Exercise of share options


97

-

117

Net investment in own shares


-

(46)

(293)

Net cash used in financing activities


(749)

(597)

(1,342)






Increase/(decrease) in cash and cash equivalents


2,446

(8)

(882)

Cash and cash equivalents at 1 January


10,278

11,294

11,294

Effect of foreign exchange rate changes


(158)

20

(134)

Cash and cash equivalents at end of the period


12,566

11,306

10,278






 

 

 

Notes to the consolidated financial statements

 

1. Segment information

 

Geographical segments

 

 

 

 

Revenue

Six months

Six months

Year

 

to 30 June 2012

to 30 June

2011

to 31 Dec

2011

 

 

(restated)

 

 

£'000

£'000

£'000

Europe

11,694

10,714

21,539

Americas

5,397

4,595

10,484

Asia

5,786

4,663

9,905

Continuing operations

22,877

19,972

41,928

 

 

 

 

 

 

 

 

 

 

Profit for the period

Six months

 

Six months

 

Year

 

 

to 30 June 2012

 

Margin

to 30 June

2011

 

Margin

to 31 Dec

2011

 

Margin

 

 

 

(restated)

 

(restated)

 

 

£'000

%

£'000

%

£'000

%

Europe

1,604

14%

1,416

13%

2,649

12%

Americas

165

3%

(245)

(5%)

403

4%

Asia

238

4%

104

2%

38

0%

 

2,007

9%

1,275

6%

3,090

7%

Share of results of associates

90

 

56

 

107

 

Net finance cost

(7)

 

(78)

 

(102)

 

Taxation

(48)

 

(126)

 

(616)

 

Continuing operations

2,042

 

1,127

 

2,479

 

 

 

 

Business Segment

Six months

Six months

Year

Revenue

to 30 June 2012

to 30 June

2011

to 31 Dec

2011

 

 

(restated)

 

 

£'000

£'000

£'000

Software

11,557

10,504

21,073

Maintenance

6,816

6,392

13,113

Services

2,840

2,198

5,006

Other

1,664

878

2,736

Continuing operations

22,877

19,972

41,928

 

  

 

2. Earnings per share

Six months

Six months

Year

 

to 30 June 2012

to 30 June

2011

to 31 Dec

2011

 

 

(restated)

(restated)

Earnings - continuing

£'000

£'000

£'000

Profit attributable to equity holders of the parent

2,042

1,127

2,479

 

 

 

 

Weighted average number of shares

'000

'000

'000

Average issued share capital

7,935

7,807

7,871

Investment in own shares

(153)

(186)

(209)

For basic earnings per share

7,782

7,621

7,662

 

 

 

 

Dilutive effect of share options

338

191

240

For diluted earnings per share

8,120

7,812

7,902

 

 

 

 

Earnings per share

 

 

 

Continuing - basic

26.2p

14.8p

32.4p

                - diluted

25.2p

14.4p

31.4p

 

 

3. Restricted cash

At 30 June 2012, included within cash at bank and in hand and trade and other payables is £0.3 million (30 June 2011: £1.1 million, 31 December 2011: £0.7 million) that relates to monies received by the Group for a grant in respect of a European project. This cash is restricted as the Group has been nominated to administer the funds, which are to be distributed to several other independent partners. Therefore this cash is not considered as part of the net owned funds of the Group at 30 June 2012.

 

4. Basis of preparation and accounting policies

Delcam plc is incorporated and domiciled in the United Kingdom. The interim financial statements for the period ended 30 June 2012 (including the comparatives for the period ended 30 June 2011 and the year ended 31 December 2011) were approved by the board of directors on 20 August 2012.  Under the Security Regulations Act of the EU, amendments to the financial statements are not permitted after they have been approved.

 

In 2011 the directors identified elements of maintenance income where internal costs had not been consistently deferred to match the corresponding external income, and thus not correctly cancelled on consolidation. The effects of the error, which has been applied retrospectively in accordance with IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' have been accounted for by restating the 30 June 2011 comparatives to reflect this revised policy. The effects of the change are:

a.   A decrease in Group revenue and operating profit of £170,000 and a decrease in the Group tax charge by £44,000 for the period ending 30 June 2011

b.   A decrease in Group deferred income balances by £646,000 and an increase in remaining net current assets of £23,000 at 30 June 2011

 

The directors have decided to adopt the amendments to IAS 19 "Employee Benefits", which become mandatory in 2013, to reflect more accurately the pension scheme costs. The key change is the impact on finance income as the expected return on the pension scheme assets assumption will be replaced by the discount rate. The effects of the change are:

a.   A decrease in the Group profit before tax of £637,000 and an increase to the actuarial gains in retained reserves of £637,000 for the year ended 31 December 2011

b.   A decrease in the Group profit before tax of £85,000 and an increase to the actuarial gains in retained reserves of £85,000 for the period ended 30 June 2011

c.   A decrease in basic and diluted EPS for the year ended 31 December 2011 of 8.3p and 8.0p respectively

 

The net result of these restatements is a decrease to basic and diluted EPS for the six month period to 30 June 2011 of 2.8p and 1.9p respectively.

 

It should be noted that the accounting estimates and assumptions are used in the preparation of the interim financial information.  The interim financial information contained within this report does not constitute statutory accounts as defined in the Companies Act 2006.  The full accounts for the year ended 31 December 2011, which have been delivered to the Registrar, received an unqualified report from the auditors and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

 

This interim financial report has been prepared under the historical cost convention.  The principal accounting policies and methods of computation adopted are consistent with those detailed in the 2011 financial statements except for the adoption of the amendments to IAS 19 mentioned above.

 

5. Taxation

The taxation charge is based on the estimated effective rate of tax for the full year.

 

6. Copies of this statement

Copies of this statement are being sent to shareholders. Further copies are available from the Company Secretary at the Registered Office of the Group, Small Heath Business Park, Birmingham, B10 0HJ. A copy of the interim report is also available on the www.delcam.com website.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR BRGDIBGDBGDD