Letts counts the days until digital diary paper launch

LETTS, the 200-year-old diary maker, has developed a new type of paper that allows users to keep an electronic record of their diary entries using a computerised pen.

The paper - which will be sold initially as an insert for Filofax personal organisers - is covered in a pattern of thousands of tiny dots. When an electronic pen containing a tiny camera passes over the pattern, it works out its location and records the pen’s movements. These can then be downloaded to a computer, allowing users to write into paper and electronic diaries at the same time.

Dalkeith-based Letts, the UK’s biggest diary maker, bought Filofax for 17m in 2001. Since then it has safeguarded more than 300 local jobs by moving production of Filofax inserts to Scotland.

Gordon Presly, chief executive of Letts Filofax, said: "I have always had confidence in the sustainability of paper products - this gives us a good interface with the digital. It could be used by anyone who wants to transmit written documents quickly without having to type anything."

Letts is the only firm in the UK that can print the pattern which enables the pen to work. The pattern could be used in police or medical notebooks, allowing a written record to be backed up with an electronic version.

It will first appear on Filofax inserts for the German market which are due to be launched in September. A later version of the system will include handwriting recognition software.

Letts also plans to launch a computer program which will allow users to print out their electronic diaries as Filofax pages. Both new products promise to break down the barriers between paper based organisers and hand-held computers like the Palm.

Letts made a pre-tax profit of close to 2.5m on a turnover of 54m in the year to January 2003. Its sales are divided approximately 50/50 between diaries and personal organisers.

Dunedin Capital Partners, the Edinburgh venture capital firm, backed Presly in a management buyout of Letts in 2000 and again when Letts bought Filofax in 2001. Dunedin estimates its share of Letts doubled in value to 7.9m between October 2001 and October 2002.

Letts expects to make 25 million diaries this year. Presly said the global economic downturn has hit sales of corporate diaries, but retail sales have improved.