Shares in DDD Group Plc (LON:DDD) edged up 4.5% to 23p this morning on news that the 3D software and content company, had continued to benefit from strong demand for 3D systems and content during the half year to June 30. DDD said that trading had been in line with management expectations and that TV and PC licensees of its TriDef 2D to 3D conversion solution had shipped more than a million units during the period – up from less than 100,000 units shipped up to the end of 2009.

During the period, the group changed its financial model from the monthly recognition of up-front license fees to quarterly reporting of royalties generated. As a result, it expects to report first half revenue of approximately £723,000, on a like for like dollar basis and after conversion, compared to £726,000 for the same period in 2009. The gross margin for the first half of 2010 is expected to be 79%. Royalties grew strongly from software and video processor licenses and demand for pre-packaged software more than doubled. In addition, as part of its focus on a licensing and royalty business model, at the end of the period, DDD completed its withdrawal from direct sales of low-margin 3D TVs and related accessories.

The first half saw a number of key licensees launching mass-market 3D products incorporating TriDef technologies. Elsewhere, in the television market, DDD is completing the development of a set-top-box solution that will allow its 2D to 3D conversion technology to be used with virtually any 3D TV set. A market-ready product is likely to begin customer trials in the second half of 2010. In addition, market interest in 3D technology has driven an increase in engagement with mobile handset manufacturers keen to explore how glasses-free 3D can be incorporated into next-generation phones.

Chris Yewdall, DDD’s chief executive, said: “Shipping a million units of TriDef is a significant milestone that shows how quickly the 3D market is growing. As a 3D pioneer, we are seeing significantly increased interest in our technology from major names in consumer electronics, computing and mobile handsets. We expect to secure further licensing contracts in the second half as technical evaluations and commercial discussions come to fruition and remain confident of a good outcome to the year.”

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