DDD Group

Software licensing group DDD (DDD) hopes to take advantage, of the rapid shift towards installing 3D technology in mass market consumer electronics.

The AIM listed developer has enjoyed strong growth in demand for its technology, indeed last year its licensees shipped over 2.5 million units of its TriDef product. New license agreements have been secured which further its reach in both the TV and PC markets, more importantly this lessens the significance of its major customer Samsung.

A decision to exit from selling lower margin 3D display and accessory sales has allowed 3D to focus on higher margin royalty income. In the year to December revenues increased 12% to £1.3m as losses edged ahead 9% to £921,000 (2009: £842,000 loss).

Last year DDD raised £3.38m to fund development and now employees 24 people in Perth and Los Angeles. Samsung uses DDD technology in its new TV range that spans 3D plasma, LCD and LED products. A deal has also been signed with Advanced Micro Devices to use the software for video game conversion to 3D.

Recently appointed broker Canaccord Genuity expects the ramp-up in demand to continue this year, with almost 10m units due to be shipped - largely driven by increasing demand from the TV and PC markets. Chief executive Chris Yewdall says 'our transition from licensing to royalty based sales will help our margins'. He also alludes to a raft of new potential business wins as adoption of its 3D technology takes off.

Sales should almost treble to £3.5m this year, which is expected to bring a small pre-tax profit of £126,000. In 2012 revenues are set to soar to £6.3m as pre-tax profits leap to £1.89m, for EPS of 1.45p. Shares in DDD have proved strong performers, though not cheap its hard to argue with the changing shift towards 3D software.