Today's companies are keener than ever to engage with customers worldwide, and many rely on the online translation and customer experience solutions provided by SDL . Investors sent its shares up 6 per cent after it reversed last year's operating loss with a first-half profit of £3.2m.
Those gains follow a "very bold" decision to replace most of its executive team and restructure operations, says chief executive Mark Lancaster. The move means it's almost "building from scratch", and it may not reap rewards until well into 2015. Nevertheless, there's an "awful lot of upside to come," claims Mr Lancaster.
Pre-tax profit at SDL's language services climbed almost a third to over £11m, while its technology segment continues to run at a heavy loss, despite signing up new customers such as House of Fraser and Specsavers. The latter unit's prospects appear to be improving, however, with constant currency bookings up 16 per cent to £50m.
The group also launched two cloud-based platforms. One integrates tools such as e-commerce and social analytics, while the other helps organisations engage with a global audience by translating their websites, ad campaigns and comments sections.
Broker Panmure Gordon expects pre-tax profits of £15.4m, giving EPS of 14.4p, rising to £23.7m and 22.1p in 2015 (from £8.2m and 5.8p last year).
| SDL (SDL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 331p | MARKET VALUE: | £268m | |
| TOUCH: | 330-333p | 12-MONTH HIGH: | 408p | LOW: 220p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 241p* | NET CASH: | £1.9m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 131 | -2.3 | -1.7 | 6.10 |
| 2014 | 129 | 3.1 | 2.3 | nil |
| % change | -1 | - | - | - |
Ex-div:- Payment:- *Includes intangible assets of £202m, or 250p a share | ||||
