Translation software specialist SDL has started to reap the benefits of integrating its software offerings. But the business has not been immune to the economic downturn and, on a constant currency basis, first-half revenues declined 11 per cent. The reported numbers were boosted by a 20 per cent currency uplift.
As previously indicated by chairman and chief executive Mark Lancaster, SDL's translation services business endured a tough first half with reported revenues rising 6 per cent to £54m, but falling by 14 per cent on a constant currency basis. The company's software business continues to gain traction, though, especially now that its - mostly acquired - technologies have been integrated. Sales from the division grew 18 per cent to £29.3m. Mr Lancaster points to "reasonably good" pipelines in web content management business Tridion, component content management unit Trisoft, and the language technology business. And with cash generation remaining strong, he adds that the prospect of dividends may not be too far away.
Analyst George O'Connor of Panmure Gordon is expecting full-year pre-tax profits of £23.1m, giving EPS of 27.4p (£20.8m and 24.4p in 2008).
SDL (SDL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 344p | MARKET VALUE: | £261m | |
| TOUCH: | 343.2-345.9p | 12-MONTH HIGH: | 395p | LOW:187p |
| DIVIDEND YIELD: | NA | PE RATIO: | 16 | |
| NET ASSET VALUE: | 204p* | NET CASH: | £32.9m | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 76.0 | 9.2 | 8.8 | Nil |
| 2009 | 83.3 | 11.8 | 11.4 | Nil |
| % change | +10 | +29 | +29 | - |
*Includes intangible assets of £131.2m, or 173p a share | ||||
