Flowtech Fluid. Regulatory News (FLO)

13 Jul 2007 07:00

Flomerics Group PLC13 July 2007 Flomerics Group PLC ("Flomerics" or "the Company") Pre-Close Trading Update Flomerics Group PLC, the global supplier of specialist simulation software forelectronics and fluid flow simulation, is today providing a trading update inadvance of its interim results for the six months ended 30 June 2007. Although the first six months of the year have been challenging, the Companycontinues to make progress in integrating the Nika business, building awarenessof the Nika products in new markets and expanding its pipeline of opportunities.Through its expanded portfolio of products and additional selling capacity, theCompany is well positioned to develop its business robustly. However, asindicated in the AGM statement, building this pipeline and translating theopportunities into sales is taking longer than had been expected. This isparticularly so in the USA, where the Company has found the market weaker thanin the previous year. Flomerics continues to see a very positive reaction to the Nika product range inthose markets in which it has been introduced. It continues to build on crossselling opportunities of Nika solutions to existing Flomerics customers in theelectronics sector and is seeing benefits as a result of having broadened itsmarket beyond electronics. The directors expect the Company to report a loss in the first half of thisyear, because the costs of the investment in additional sales staff early in theyear will not be offset by increases in revenue, which are flowing through moreslowly than expected. The Company's results for the year will therefore dependeven more than usual on performance in the second half. Moreover, forecasts forthe Nika business are more difficult than for the traditional Flomericsbusiness, because it involves more sales of new products and a shorter salescycle. The Company's forecasting systems, which are well established for itstraditional business, are therefore currently showing a range of possibleoutcomes for the year. The current market expectation is at the upper end of therange and, as indicated in the AGM statement, actions are being taken to improveperformance and increase the likelihood of achieving this expectation. We willgive clearer guidance on the outlook for the year in the interim report. The Company expects to announce its interim results for the six months ended 30June 2007 in mid September 2007. Enquiries: Flomerics Group PLC:Gary Carter, Chief Executive 020 8847 3000Chris Ogle, Finance Director 020 8847 3000 Conduit PR:Christian Taylor-Wilkinson 020 7429 6666 Oriel Securities Limited (Nominated Adviser):Andrew Edwards 020 7710 7600 This information is provided by RNS The company news service from the London Stock Exchange