Scipher heading into the black

By THIS IS MONEY
Updated:

 

TECHNOLOGY development company Scipher today cheered investors by forecasting an earlier-than-expected move into profit. Scipher, which specialises in intellectual property licensing, said it had been encouraged by an operating profit during its most recent quarter.

While the firm expects to be in the red for the first half of the current financial year, it is targeting profitability thereafter. The shares gained almost 10%, up 8p to 88.5p, following the update as Scipher showed total turnover increased by 32% to £21m during the 12 months to 31 March.

Chairman Dr Ken Gray said the rate of growth suggested the point of profitability would 'be sooner than originally planned'. That was despite full-year operating losses up from £10m to £11m because of further investment in technology and infrastructure. Scipher said it reduced annual operating costs by £7m to become cash positive in the fourth quarter.

Gray added: 'The advances made by our businesses reflect the changes put in place to improve Scipher's commercial performance. Scipher has delivered strong revenue growth and I confirm that we have brought forward the point at which we will be cash generative.'

New business, which includes activities established since Scipher became independent from EMI in 1996, represents around three-quarters of all revenue. The performance has been boosted by PicVue Electronics's decision to build a plant in Taiwan to produce micro-displays based on Scipher's technology. Scipher will receive a shareholding of up to 20% in the venture.

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