Flomerics Group, supplier of analysis software to the electronics sector, reported record full-year results, and said acquisitions remain an option in the long term.
Sales of its airflow and heat transfer product, Flotherm, account for 88% of revenue. Flotherm grew 32% over last year. It is used by "several hundred" customers including Lucent Technologies, Intel and Cisco Systems.
Flomerics is also capitalising on a trend to outsource thermal design, especially visible in US start-ups. Thermal Design Services saw sales triple to £750000.
Flovent, a thermal analysis package applied to buildings, typically electronics installations, saw sales up 10% compared with 24% in 1999. Ogle said: "We expect and intend to drive this up."
Flomerics is in the process of incorporating EMC analysis into Flotherm. This follows its acquisition of Kimberley Communications Consultants (KCC) in 1999. A system is being trialled by customers including Nortel Networks, Alcatel and Ericsson Microwave and a "fully converged" product will be re-leased in 2002.
The company says 2000 was a "year of investment" in EMC, and the division saw sales growth of 82%. Ogle said: "We anticipate the EM market is equally as big as the thermal market." Flotherm's proportion of revenue will therefore fall as other elements of Flomerics catch up, he adds.
Flomerics says it remains committed to repositioning itself from being a supplier of thermal analysis software to one involved in all aspects of design concerned with physical hardware.
This strategy lay behind the acquisition of KCC. David Tatchell, chief executive, says there are other areas that the company could buy into: "We have other areas in mind but can't give priority to them." He cited noise and reliability: "They are not as critical but we do want to address them."
Further acquisitions are therefore likely: "Where we move into new areas, we won't expect to develop analysis ourselves. We apply our business model to other people's technology. We may acquire another company, we may partner. We have to work with someone else."
The company has benefited from the government's R&D tax credit. Ogle said: "Of the 13p in earnings per share, 3.4p is attributable to R&D allowances."
Involved in the design side of the sector, Flomerics says it is less sensitive to industry cycles than the markets which its customers serve.