Plasmon says H1 losses will be bigger than expected, but H2 looking better
Plasmon plc (PLM.L), maker of professional optical archives systems, said today that lower revenue and budgeted increases in sales and marketing costs will lead to first half losses slightly above expectations and significantly above the £4.3m loss reported in the first half of last year.
But, it said, with OEM revenues steadily improving and new Archive Appliance customers beginning to take product, it expects an improved trading result in the second half in a trading update for the period to 30 September to the London Stock Exchange this morning.
By mid morning the stock market had marked its shares down by 16%, or 6.75p, to 35.25p, valuing the Cambridge-based company at around £28.3m.
The company said that UDO – its new generation product line - sales growth in the six months to 30 September of 35% was below expectations but at a similar rate to that of the year to 31 March.
New product sales
“This rate of growth is not yet sufficient to overcome the continuing decline of our legacy products and therefore our overall revenues declined by 7% to £18.6m”, it said.
During the first half Plasmon completed the upgrade of its product lines to RoHS compliance and continued to make good progress with UDO2 development. UDO2 will double the capacity of each UDO disk to 60GB and shipments are scheduled to begin in May next year.
Ten days ago, Konica Minolta launched a full range of UDO solutions at the CEATEC trade show in Tokyo. Konica Minolta is Plasmon's first OEM customer in East Asia and the recent addition of a major Japanese brand is expected to drive future sales of UDO technology in the Japanese and East Asian markets.
“The growth in our UDO revenues is being driven by the increased investment we made in early 2006 in our US sales and marketing organisation as well as increasing OEM sales to IBM and our major medical imaging customer”, the company said.
“We are seeing strong interest in the Archive Appliance across many applications and expect to generate additional sales revenues from November onwards when the next software upgrade becomes available.
In the meantime the group continues to seek ways to cut its cost base and return to profitability.
16th October 2006
