NetTest looks to focused growth strategy

NetTest has released its 2004 financial results, showing that its revenue increased from DKK 550 million in 2003 to DKK 569 million in 2004.

NetTest has released its 2004 financial results, showing that its revenue increased from DKK 550 million in 2003 to DKK 569 million in 2004.

Revenue in 2004 was affected negatively, partly by the declining US dollar, and partly by the sale of discontinued operations in 2003.

The company's growth in its continuing activities increased by 16%, measured in US dollars.

In all NetTest's business areas, there was an increasing demand for its products and services, and the company welcomed many new customers, including new accounts in the growth markets in Asia and Latin America.

All the company's business units increased their market shares in 2004.

In 2004, NetTest invested heavily in its sales organisation and in R and D, and at the end of 2004, the company was ready with a completely new product programme across its three business areas.

A growth-oriented strategy such as this has an impact on costs in the short term, which affected the financial statements for the past year.

The investments in R and D, sales organisation and marketing were increased by DKK 37 million (+30%).

R and D investment accounts for 22% of the company's revenue and is concentrated on a number of specific areas.

Accordingly, in 2004, NetTest focused in particular on the development of solutions for internet-based telephony (VoIP), 3G mobile technology, and fibre technology - product areas that are expected to contribute significantly to growth in 2005 and beyond.

"2004 was a year during which we experienced increased demand for our products", says Allan J Vestergaard, President and CEO for NetTest.

"We wish to meet this demand and therefore follow a very focused growth strategy".

"It is obvious that an increase in NetTest's market shares has lead to a very competitive environment with a high price pressure that puts stress on our margins".

"Based on extensive investment in R and D, we now have a very strong product portfolio which will contribute to further growth in the coming years".

The company's profit for the year of DKK 3 million - a decrease compared with 2003 - was affected by two opposing factors outside the normal operations.

First of all, the company's property in Brondby, Denmark, was sold with a gain of DKK 39 million, and NetTest now rents its previous property.

Secondly, NetTest streamlined its company structure, which lead to a reversal of a tax asset, which affected the financial result of the company negatively by DKK 30 million in 2004, compared with 2003.

NetTest expects continuous growth in the coming years.

However, the financial statement for 2005 - like that for 2004 - is expected to be influenced by a high level of investment as part of NetTest's focused growth strategy.

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