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July 11, 1997updated 05 Sep 2016 12:02pm

POWERFUL POUND LEAVES CADCENTRE “DISAPPOINTED”

By CBR Staff Writer

Cambridge, UK-based Cadcentre Plc is one of an increasing number of UK companies to be hit by the strength of the pound at the moment. The company’s management was seriously disappointed with its results which dampened what was otherwise a very good year indeed. On the plus side, the three-dimensional computer-aided design company is seeing ever increasing opportunities coming through from its Windows NT offerings, and it looks like it will give the competition a run for its money. Cadcentre saw revenues for the year to March 31 rise 22% to 17.3m pounds, and pre-tax profits were up 6.5% at 1.8m pounds. These included a 138,000 pound charge the company found it had to pay as a penalty for re-paying a shareholder loan early as a condition of last year’s flotation (CI No 3,036). Chief executive Crispin Gray said the effects of the exchange rate knocked around 600,000 pounds off revenues. International sales in local currencies had otherwise been very strong, he said, with US sales up 40% and German sales up 60%, but the rise in sterling took the gloss away. To compensate for the lost revenues, the company has had to trim costs in Cambridge, and says it has laid off some of its contract development staff. Gray says the company has always had a pool of staff on short term contracts and he claims the company’s core products and services will not be affected. Extra work carried out for specific customers may be put off or delayed, but he says the measures have more or less compensated for the currency shortfall. Cadcentre has also seen research and development as a percentage of sales fall to about 15%, but this reflects the growth in sales, and the company says this is now about the right percentage to sustain healthy growth. Last year saw more new customers than ever before, and the company also benefited from the knock-on effect of a major contract with Swiss chemicals and pharmaceuticals firm Merck AG, where a number of Merck suppliers were also encouraged to use Cadcentre software. Most of Cadcentre’s products are now up on Windows NT, and this has opened its market to a far wider user base, with systems running on much cheaper personal computers. Cadcentre’s major competitor, Integraph Corp, which also supplies hardware, has been selling NT machines into its customer base, and this now enables Cadcentre to offer its software to users that were formerly tied in to Integraph’s proprietary hardware. Since the start of this year, it has signed 15 new customers. The company finished the year with 1.8m pounds in the bank and no debts. It will pay a final dividend of 1.6 pence.

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