SDL’s full-year results were rather better than expected, even after the positive guidance given in January. Underlying organic revenue growth was an impressive 24 per cent despite a marked slowdown in the US in the final quarter.
The translation services specialist said that 2009 was "may well be a challenging year", though, and added that it is seeing some delays in deal conversion. However, increased globalisation means demand for SDL’s translation services is likely to prove resilient. Risk from any weakening of the US market is offset by a strong presence in Europe, and SDL is aiming to build up business elsewhere in the world, notably in Asia.
A significant currency tailwind is helping, too - the strengthening US dollar and euro account for over a third each of sales each, with less than 10 per cent of sales coming from the UK. New acquisitions are bedding down well with a solid performance from Tridion, which was made its first full-year contirbution. Idiom, bought a year ago, reached break-even last December.
SDL has also seen a good flow of new customer wins recently and is launching a new translation platform this year, which analysts expect to be well received. So Investec is sticking with a 2009 pre-tax profit forecast of £27.3m, with EPS of 25.4p.
SDL (SDL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 247p | MARKET VALUE: | £187m | |
| TOUCH: | 243-252p | 12-MONTH HIGH: | 389p | LOW: 193p |
| DIVIDEND YIELD: | nil | PE RATIO: | 13 | |
| NET ASSET VALUE: | 215p* | NET DEBT: | £31.2m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2004 | 62 | 4.4 | 5.4 | nil |
| 2005 | 79 | 5.2 | 4.9 | nil |
| 2006 | 95 | 9.4 | 9.9 | nil |
| 2007 | 117 | 12.7 | 13.1 | nil |
| 2008 | 159 | 19.9 | 19.2 | nil |
| % change | +35 | +56 | +47 | - |
*Includes intangible assets of £138m, or 182p per share | ||||
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For more analysis of company results as they're released, go to www.investorschronicle.co.uk/results
