Mounting global competition has prompted more and more companies to differentiate themselves by offering localised websites and customer service across myriad devices and media channels. That helped SDL (SDL) - which provides social, e-commerce, language and other 'customer experience management' tools to the likes of Canon - post a 38 per cent rise in half-year adjusted operating profit to £9.4m.
Strong demand in the Americas and new clients such as Huawei and Mitsubishi Electric drove language services revenue up 4 per cent. Moreover, the division's pre-tax profit margin widened by 5.6 percentage points to a record 21.6 per cent. That reflected tight cost control, including greater use of automated translation technology and low-cost production centres.
However, tepid sales of customer experience management solutions meant the technology division's adjusted pre-tax loss widened by 44 per cent to £7.2m. Constant-currency bookings also fell 6 per cent as the restructured sales force geared up. But management expects adjustments to its sales teams and marketing tactics, together with a bulging business pipeline, to drive growth in the second half. Improvements to its real-time machine translation technology and the launch of a 'digital experience accelerator' - which allows clients to deploy websites in hours rather than days - have also bolstered the group's prospects.
Broker N+1 Singer expects pre-tax profit of £22m, giving EPS of 19.3p, up from £16.5m and 15.1p in 2014.
SDL (SDL) | ||||
---|---|---|---|---|
ORD PRICE: | 386p | MARKET VALUE: | £313m | |
TOUCH: | 386-387p | 12-MONTH HIGH: | 472p | LOW: 308p |
DIVIDEND YIELD: | 0.6% | PE RATIO: | 37 | |
NET ASSET VALUE: | 240p* | NET CASH: | £8.2m |
Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2014 | 129 | 3.1 | 2.3 | nil |
2015 | 134 | 6.0 | 4.8 | nil |
% change | +4 | +94 | +107 | - |
*Includes intangible assets of £194m, or 240p a share |