20th July 2010

Vericast has announced today the creation of a new trading vehicle, Vericast Devices Limited, dedicated to the development, manufacture and support of end-user equipment in the digital broadcast sphere. The new company is to take over responsibility for supporting the existing ETI Monitor and DenMux Live/Pro rackmount equipment, and aims to expand the range of devices on offer during 2010. The DenMux API project, and its licensing customers and suppliers, remains the core focus for Vericast Limited.

The move comes after stagnation of the relatively new test engineering business. Managing Director, Duncan Mackay, summarises the situation leading up to the decision:

"We've been faced with some daunting challenges this year, and almost all of the risk has come from the test engineering venture. Although the broadcast business has been quiet - a sign of the times, no doubt - it is not jeopardized by a slowdown in sales. The same cannot be said of the test business, which means a demerger is a sensible precaution to take on behalf of our broadcast customers."

Vericast first entered the test engineering sector in 2008 with DenMux v1, written entirely by company founder Mr. Mackay, following an enquiry from MindReady Inc., Canada. By late 2008, agreement was reached with another licensee to re-engineer DenMux from scratch, providing the technology through an Application Programming Interface, and adding support for both DAB+ and DMB encoding. These new features required Vericast to license third-party technology, which, according to Mr. Mackay, is now the source of a serious threat to the business:

"The main problem is the collapse in demand. Our volumes simply didn't come in, and licensing agreements with some customers have been terminated prematurely and disputed over technicalities in order to avoid the payment of fees. We're left to face the long-term third-party licensing fees on our own, in a market which never really developed according to customer projections."