Half year trading update

23 August 2013

DDD Group PLC

Half year trading update

DDD Group plc (AIM: DDD, 'the Group'), the 3D solutions company, announces a trading update for the six months ended 30 June 2013.

The Group expects first half revenues to be approximately $2.4m (2012 $4.0m), owing to a fall in demand for the Group's 2D to 3D conversion software as the global PC market continues to decline. Shipments of the Group's 2D to 3D conversion solution by TV chip manufacturers grew 16% compared to the same period in 2012. First half gross margin is expected to be 99%. Cash and receivables (including earned royalties) at the end of the period were in excess of $3.7m and the Group has no debt.

The Group continues to grow the Yabazam! 3D movie streaming service which has now been downloaded over 450,000 times by users of Samsung and LG Smart TVs. The content library is now in excess of 100 3D movie titles, available to US customers as a monthly subscription service and to international customers on a pay-per-view basis.

The Group has made good progress in its initiative to secure a partner to assert the Group's international patent rights. The goal of this initiative is to actively pursue patent licensing opportunities to complement the Group's technology licensing program. The Group will provide a further update on this initiative in due course.

During the first half the Group also applied for patent protection for an innovative video encoding solution that is aimed at the emerging growth markets for digital streaming video and also Ultra High Definition (UHD) TVs. These new inventions are the result of eighteen months of R&D and leverage the Group's market-leading expertise in 3D image processing to deliver solutions that can be applied to the large markets of conventional 2D devices.

Initial testing indicates that these new video encoding technologies can save up to 30% of the bandwidth used to deliver a 2D streaming video while maintaining image quality. The Group has recently begun to demonstrate these solutions to prospective customers and partners and is experiencing a positive response.

The Group anticipates that this solution has the potential to offer an additional revenue stream alongside DDD's existing TriDef 3D products and services.

Chris Yewdall, DDD's Chief Executive Officer said:

"Demand for our TriDef 3D technology continues to grow as expected in the TV market, which is the largest market for 3D consumer devices. We are naturally disappointed that the continued slowdown in PC sales has now started to impact the 3D PC market. At the same time we are encouraged by increasing levels of demand for TriDef 2D to 3D conversion products in the fast growing tablet market.

"We have also made exciting progress on some new initiatives, which include developing innovative solutions for the larger 2D growth markets that we can add to our technology licensing program."

Results for the first half of 2013 are expected to be published in late September.

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About DDD Group

DDD transforms the visual experience by bringing 3D to the consumer. Its TriDef® 3D solutions convert 2D to 3D automatically, and enable delivery to 3D TVs, PCs and mobile devices. Leading brands including Samsung, LG Electronics, Lenovo and Sony license these solutions. Over 33 million TriDef 3D products have been shipped by DDD's licensees worldwide. DDD's Yabazam! label delivers 3D everywhere with its online content portal and Smart TV and Android mobile apps. DDD's shares are quoted on the London Stock Exchange's AIM Market (AIM: DDD) and in the United States on the OTCQX® marketplace (OTCQX: DDDGY). For more information please visit www.DDD.com.