DDD Group Plc (LON:DDD) Group (DDD, 19.25p, £23.35m) Interims for the provider of software converting 2D to 3D are in line with management expectations. The 3D market has gained substantial momentum over H1 and the group have clearly benefited from it.  Over a million units of the TriDef 2D to 3D conversion solution were shipped by licenses in the TV and PC market versus 0.1m units shipped at the end of 2009. In H1, the group changed its revenue model from monthly recognition up-front license fees to quarterly royalties generated. In H1 2010 revenues remained flat £0.72m, but tighter cost control drove adjusted pre-tax losses to decline by 40% to £0.26m (H109: £0.43m). Following a £3.4m fundraising in June 2010, net cash stood at £3.4m (H109: £0.27m). We are disappointed by the delays to essential third party PC graphics hardware, which will lead to the likely slippage of OEM TriDef sales to 2011. The delays are expected to be resolved in Q42010. Full-year revenues are now expected to be in region of £1.4m-£1.6m against previous expectations of £3.5m.  We thus expect losses to widen. Fundamentally DDD is overvalued. However the group is very well positioned to capitalise on the 3D wave. We believe there is a hidden asset on the balance sheet for the goodwill of the product software. The 3D market has escalating and DDD has the right relationships and products to benefit from it. In our opinion, the 3D market will continue to gain momentum. We anticipate the group will win substantial new orders in the coming year. We reiterate our SPECULATIVE BUY recommendation.  

Forbidden Technologies (LON:FBT) (FBT, 23.5p, £20.70m) Interim sales increase to £0.17m (£0.14m) with gross profits of £0.16m (£0.13m) with maintained gross margins of 94% offset by op costs up to £0.22m (£0.16m) leading to an increased op loss of £0.05m (£0.03m) we do not believe reflect the increasing acceptance of the cloud based video editing and distribution software. The group reports it is making good progress with major international partners, we believe it was not a leap of faith to demonstrate the software on a Nokia smart-phone but a way of highlighting the forthcoming surge of video in consumer goods. With the potential of deals in the TV/film and mobile phone arena we…

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