SDL profit slumps, confident outlook

Translation and communications software firm SDL said a weak performance in technology and underinvestment in the company hurt its full year performance but it remains confident in its outlook for sales in 2013.

Translation and communications software firm SDL said a weak performance in technology and underinvestment in the company hurt its full year performance but it remains confident in its outlook for sales in 2013.

Profit before tax fell 19% for the year ended December 31st 2012 to £27.4m while revenue for the year increased 18% to £269.3m following underlying organic growth and a strong Alterian contribution.

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Geographically, headline growth in Asia was particularly strong at 46%, North America was 12% while Europe, including the UK, increased by 17%.

Across its three main divisions Language Services revenue grew by 12.4%, driven by strong sales and marketing execution. Content Management Technologies revenue declined marginally while Language Technologies revenue business was flat.

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Chairman and Chief Executive Officer Mark Lancaster commented: "Although the underlying organic growth for the group was strong, 2012 was a difficult year for SDL. As a result of under investment in the business in 2011 and 2012 performance has been impacted, particularly in the technology segment."

"Despite this we remain confident in our outlook for sales in 2013 and, as announced in November 2012, we will make significant discretionary sales, marketing and R&D investments in 2013 to return SDL to strong technology growth. The total investment will be £8m to £9m.

The investment is expected to boost technology revenue growth in 2013 but will reduce profits for 2013, the group explained.

"These investments will take SDL to a new level, creating a solid platform to deliver significant sustained revenue growth and profitability to 2014 and beyond."

Last week the group acquired mobile web solutions company bemoko, which delivers dynamic content to any device.

SDL has proposed final dividend of 6.1p, up from 5.8p last time.

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