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.

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.

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.

CJ

Recommended

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework
Investment strategy

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework

John Stepek talks to Steve Clapham, investor, analyst and author of The Smart Money Method, about the dangers in picking individual stocks and why you…
8 Apr 2021
BP looks set to return more money to shareholders as it beats expectations
Energy stocks

BP looks set to return more money to shareholders as it beats expectations

Oil major BP is to embark on a share buyback programme after significantly reducing its debts. Saloni Sardana looks at what it means for your portfoli…
6 Apr 2021
Deliveroo has hit the market – but it’s not getting the warmest welcome
UK stockmarkets

Deliveroo has hit the market – but it’s not getting the warmest welcome

Food delivery company Deliveroo made its debut on the stockmarket this morning. But with the share price sliding by 30% straight away, it’s not made t…
31 Mar 2021
Three stocks to buy now that will come back stronger after Covid-19
Share tips

Three stocks to buy now that will come back stronger after Covid-19

Professional investor Ed Wielechowski of Odyssean Capital, chooses three compelling stocks that should thrive in a post-pandemic world.
29 Mar 2021

Most Popular

The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
Central banks are rushing to build digital currencies. What are they, and what do they mean for you?
Bitcoin

Central banks are rushing to build digital currencies. What are they, and what do they mean for you?

As bitcoin continues to soar in value, many of the world’s central banks are looking to emulate it by issuing their own digital currencies. But centra…
8 Apr 2021
House prices: from boom to even bigger boom
House prices

House prices: from boom to even bigger boom

UK house prices have risen to new to record highs, says Nicole Garcia Merida. Demand continues to outpace supply, but continued low interest rates, th…
9 Apr 2021