Year end trading update - licensing agreements drive revenue momentum
DDD Group plc (AIM: DDD, 'the Group'), the 3D solutions company, announces a trading update for the financial year ended 31 December 2011.
Trading is in line with the Board's expectations as the Group continues to benefit from increased momentum in license agreements signed during the year. Approximately 9.1 million units of the TriDef 2D to 3D conversion solution were shipped by licensees in the TV, PC and mobile phone markets in 2011, up approximately 250% over 2010.
The Group expects total revenue for the full year to be approximately $5.5 million, up 173% from 2010 (excluding discontinued operations). This increase was driven by a 193% increase in royalty revenues from OEM licensees to $4.5 million. Gross margin is expected to be 94%, up two percentage points from 2010. Cash at the year-end was approximately $3.1 million.
In 2011, DDD developed a more balanced revenue mix from TV, PC and mobile phone manufacturers. Shipments by TV chip manufacturers grew 194%. Demand for the Group's higher value products in the PC market grew at a compound quarterly growth rate of 141%, reaching approximately 600,000 units per quarter in the fourth quarter. For the whole of 2011, PC software shipments grew 1,199%. Mobile phone shipments, which began in June 2011, represented approximately 10% of unit shipments.
DDD signed 10 new license agreements during the year with PC OEMs, mobile handset makers and TV chip manufacturers, bringing the total number of license agreements signed to 21. At the end of the year, 14 licensees were actively shipping royalty-bearing products, up from 7 at the end of 2010.
At the Consumer Electronics Show in Las Vegas in January 2012, a number of the Group's licensees, including Sony, LG Electronics, Samsung and Lenovo, demonstrated current and future products incorporating TriDef 3D solutions. These products included PCs, TVs, set top boxes and smartphones.
DDD continued to develop its engineering and support team in response to growing demand for the Group's TriDef 3D solutions. Headcount increased by 9 staff to 31, including the addition of local support resources in Taiwan, where many of the Group's PC licensees undertake product development and manufacturing.
The Group also expanded its patent library, adding further patents awarded in the United States, Japan, China and the Philippines for its 2D to 3D conversion and 3D encoding technologies. The total number of issued patents is now 53 across 24 countries.
"The Company announces that on 14 February 2012 the Board of Directors have approved a grant of options over 2,420,000 ordinary shares of 1p each in the Company ("Ordinary Shares") to the management of the Company including Chris Yewdall, executive Director.
The options have an exercise price of 27.25p per Ordinary Share which is the mid-market closing price of the shares on the grant date."
The management granted themselves options of 27.25p per Ordinary Share just before the February trading update is due. It appears the managers like the 27.25p strike price. Hope they make a killing!
Trading Update tomorrow, February 17, or more likely next week. Shares likely to be more expensive, maybe substantially more expensive after the update.
I see great things for DDD. But the lack of share volume and the lack of interest on this board gives me pause. Then I look over the contract signings and the market share %'s of DDD contracted partners and I want to buy more shares. Good luck all.
DDD going down on small sells. I am resisting the urge to buy more as this still looks like a cracking little well run company who are going to make lots of money. Lenovo making massive profits, LG and samsung pushing cheap 3d tv's and other deals make this very interesting indeed.
As a London listed company, DDD Group (AIM: DDD.L) reports results twice per year. The interim results reporting on the first half (through June 30) is generally reported in September each year. The full calendar year (ending Dec 31) is expected to be in April but the exact date has not yet been released. We typically provide trading updates (August/February respectively) once we have confirmed our sales revenues and gross margin rates as an update to investors. We communicate this information to investors via London Stock Exchange’s Regulatory New Service. At this stage, we do not plan to host regular conference calls.
You may also register on the DDD website as a shareholder and announcements related to these matters and other company activities are routinely sent. Here is the link:
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