Delcam invests as others cut

The company, which claims industry-leading levels of R&D investment, put more then £4.7 million into R&D during the period, a small increase from the £4.5 million invested in the first half of 2008. This strategy is in marked contrast with some other suppliers in the CAM market, which have cut their investment in development as their sales have fallen, the company underscores. Delcam also continued to invest in other areas of its business, including the opening of a new Asian office based in Singapore for its Professional Services Group, and the addition of a large 5-axis machine tool in its Tooling Services Division, Birmingham. Sales during the opening six months of £16.1 million were less than 5 per cent down from the £16.9 million achieved in the equivalent period last year, a reflection of the company's customer base deferring its expenditure on software. Within this total, recurring maintenance revenues, derived from software maintenance and support contracts, increased by 13 per cent to £5.8 million, compared with £5.1 million in the first half of 2008. Despite the fall in sales and its continued high levels of R&D expenditure, Delcam remained profitable. Pre-tax tax profit for the first six months of 2009 was £0.3 million, against £1.4 million in the first half of 2008. Net cash at the end of the period was a very healthy £5.8 million. This financial strength will leaves Delcam well placed to take full advantage of any improvement in market conditions. "Reflecting the global financial and economic crisis, the trading environment in 2009 has been challenging and the impact of the downturn in the manufacturing sector has been even harder than we initially anticipated at the end of last year," said Delcam chairman Peter Miles (pictured). "With many companies postponing their investments in capital equipment, it is to be expected that the associated software sales should also be delayed. "However, as we stated in our 2008 annual report, 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. This provides us with an increasing commercial advantage and will help to support our ambitions to build our market share during the downturn."