Investor Relations - DECEMBER 2004 TRADING UPDATE

Markets continue to provide opportunity
However exchange rates are adversely impacting reported sales

Delcam plc, a leading global supplier of advanced CADCAM software solutions to the manufacturing sector announces an update on its current trading for the year ended 31st December 2004.

Sales growth through 2004 has continued, especially in our North American and Far Eastern operations. Group sales in local currency terms are expected to grow some 9% in the year. However with 60% of our software and maintenance sales denominated in US dollar, reported sales growth (in this important trading period for the group) is now anticipated to be insufficient to declare profits in line with market expectations.

Our current expectation is for pre-tax profit to be over £1million but below that of the prior year, assuming an average US$ currency exchange rate of 1.83 compared to a reported £1.3 million in 2003 when the US$ currency exchange rate was 1.64. Based on the 2003 US$ rate it is estimated that our profit would have been over £1.7million; a significant improvement on 2003 and well ahead of market expectations.

We expect sales growth to continue in 2005 as we continue to increase our investment in marketing and product development. We expect to benefit from a lower tax charge in the year, due to R& D tax credits, which will have a corresponding benefit in earnings per share.

The Board continue to focus on profitability and look for opportunities to enhance growth of our company both organically and by acquisition of businesses that allow Delcam to leverage its technology and sales distribution assets. We look forward to updating our position in due course.
For further information, please contact:

Hugh Humphries Delcam PLC (Managing Director) 0121 766 5544
Kulwant Singh Delcam PLC (Finance Director) 0121 766 5544
Ed Jones Williams de Broe (Corporate Finance) 0113 243 1619

About Delcam plc
Delcam is one of the world's leading suppliers of advanced CADCAM software product development solutions for the manufacturing industry. The company has grown steadily since being founded formally in 1977, after initial development work at Cambridge University, UK. It is now the largest developer of product design and manufacturing software in the UK, with subsidiaries in North America, Europe and Asia. Delcam’s software is used by more than 9,000 organisations in over 80 countries.