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8 September 2009 Delcam Maintains Development Investment despite Downturn
The CAD/CAM software developer Delcam plc has maintained its high levels of R&D expenditure during the first half of 2009 despite feeling the effects of the global economic downturn. The company invested more than £4.7 million (about €5.4 million) in R&D during the period, up from the £4.5 million it invested in the first half of 2008. According to the company, this strategy is in contrast with that of some other CAM suppliers, who have cut their investment in development as sales have fallen. Delcam continued to invest in other areas of its business as well. For example, it opened a new Asian office for its Professional Services Group in Singapore, and added a large 5-axis machine tool in its Tooling Services Division. Sales during the opening six months of 2009 were £16.1 million (about €18.3 million). This figure represents a decrease of less than 5% from the sales revenues for the equivalent period last year and was achieved despite prevailing market conditions in which manufacturers generally are deferring expenditures on software. Revenues from software maintenance and support contracts actually increased by 13% during the first half of this year, to £5.8 million (about €6.6 million). This rise suggests the value Delcam customers place on the regular software upgrades Delcam issues and on the quality of the company’s technical support. Despite the fall in sales and continuing high levels of R&D expenditure, Delcam remains profitable. Pretax profit for the first six months of 2009 was £0.3 million. Net cash available at the end of the period is a healthy £5.8 million. “Reflecting the global financial and economic crisis, the trading environment in 2009 has been challenging,” said Delcam chairman Peter Miles, “and the impact of the downturn in the manufacturing sector has been even harder than we initially anticipated at the end of last year. However… given Delcam’s strong financial position and high level of recurring income, we believe that the business is well placed to see out the near-term challenges. In particular, we are continuing to invest significantly in product development and marketing.” For further information: Delcam plc
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