As foreshadowed in a February trading statement, CAD/CAM software developer Delcam has fought back from an October profit warning to beat revised market expectations for the full year and produce a £850,000 (£1.64m) pre-tax profit. Prior to the October warning, analysts had been expecting a slightly improved £1.8m profit before from the Birmingham-based company. But in the weeks following 11 September (traditionally some of Delcam's busiest) sales slumped dramatically, the profit warning was issued and analysts downgraded their expectations by around £1.2m. The better-than-expected figures are indicative of a strong recovery in November and December. Encouragingly they also come after a £300,000 increase in research and development spend and a £350,000 rise in Delcam's marketing budget last year. Revenues swelled from £17m to £18.2m, spurred on by strong sales growth in France, Germany and Italy. Although management admitted 'our markets remain uncertain', the company is looking for a stronger performance in 2002 and to increase the full-year dividend to 3.35p (3.25p). House broker Williams de Broe is equally optimistic. Prior to the 20 March announcement, analyst Padeep Travadi was forecasting £1m profit next year and earnings of 11.6p. He is upgrading his estimates. At its current price, Delcam looks good value.