Computer aided design software supplier Delcam reported lower interim profits andit is more difficult than ever to predict the full year outcome.
Manufacturing businesses are deferring spending and that is hitting Delcam’s revenues. There was a small dip in revenues from £16.9m to £16.1m in the six months to June 2009, although recurring maintenance revenues increased 13% to £5.8m.
The main decline in revenues came in the Far East. The effect of falling revenues were exacerbated by higher admin expenses, including a rise in R&D spending from £4.5m to £4.7m. Profits slumped from £1.42m to £310,000.
The dividend is being maintained at 1.35p a share.
At 220p a share, up 10p on the day, Delcam is valued at £17m. There was net cash of £5.8m, or £4.6m excluding restricted cash, at the end of June 2009.
Daniel Stewart forecasts profits of £1.25m in 2009, rising to £1.7m in 2010. That is still below the £2.4m profit made in 2008.
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