Acquisition helps drive CFD software sales

Flomerics Group sales increased by 24% to US $27.8 million during 2006.

Flomerics Group sales increased by 24% to US $27.8 million during 2006, and profits before tax, amortisation of goodwill, exceptional items and share-based payments increased by 30% to $2.9 million.

A key factor in these results was the company's acquisition of Nika in July 2006.

Global sales of Nika's "Engineering Fluid Dynamics" (EFD) software grew by 33% in 2006, and Flomerics believes that EFD is now the world's fastest-growing computational fluid dynamics (CFD) product.

Revenues excluding those resulting from the acquisition of Nika grew by 13% to $25.3 million.

Flomerics three main lines of business all achieved healthy revenue increases.

Sales of the company's electronics cooling products, Flotherm and Flo/PCB, increased by 11%.

Revenues related to MicReD, which was acquired in 2005 and is also part of the electronics cooling line, were up 80%.

Revenue from electromagnetic products, Flo/EMC and MicroStripes, grew by 4%.

In the building heating and ventilating segment, Flomerics' existing Flovent product's revenue grew by 24%.

"At the beginning of 2006 we set out to achieve three clear objectives", said Gary Carter, Chief Executive for Flomerics.

"Our first objective was to continue to drive the top line growth of our existing products".

"The second objective was to consolidate the acquisition of MicReD, and our third objective was to evaluate fresh acquisition opportunities".

"Acquisitions must meet our twin criteria of securing world-leading technology while also adding a complementary product set to our existing lines of business".

"I am delighted to announce that we have successfully achieved all three of these objectives".

The acquisition of Nika in 2006 represented a significant move for Flomerics.

Nika is a specialist developer providing fluid flow and heat transfer simulation software for a wide range of applications including vehicles, home appliances and electronics.

The EFD software enables engineers to optimise their designs in the shortest possible time.

A major advantage of EFD - unmatched by other CFD codes - is that it is fully embedded with the major mechanical computer aided design (MCAD) systems such as Pro/Engineer, SolidWorks and Catia.

"The acquisition of Nika enables Flomerics to sell solutions for a far wider range of applications and industries, while still providing the electronics sector with more specialised products and services", said David Mann, Chairman of Flomerics.

"Other benefits include the potential to drive a higher level of sales through each of our existing offices and the shortening of the sales cycle for the new products".

"In the period from the acquisition to the end of the year, sales from Nika added GBP 1.4 million (about US $2.8 million) to group turnover".

"The acquisition has also brought some powerful new technology to the group as well as a highly specialised product development team based in Moscow".

"There is clear synergy between Nika's and Flomerics' product applications", Carter added.

"The client lists of both companies feature big-name companies, such as Alcatel, BAE Systems, Black and Decker, Bosch, Delphi, Intel, Mitsubishi, Thales, Samsung, Siemens and Toyota".

"However, Nika's extensive client base also includes DAF, Electrolux, Honda, Lufthansa, Miele, Olympus, Pirelli, Tyco and Volkswagen".

"This provides the potential to cross-sell both Nika and Flomerics solutions into the combined client base".

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