14th Apr 2020 11:54
(Alliance News) - SDL PLC on Tuesday reported a sharp rise in annual profit and revenue but will not recommend a final dividend in order to preserve cash.
Shares in the language software firm were 7.8% higher in London on Tuesday at 456.00 pence each.
In 2019, SDL's pretax profit jumped 47% year on year to GBP27.0 million from GBP18.4 million in 2018.
Revenue was 16% higher at GBP376.3 million from GBP323.3 million.
SDL noted its annual results includes a maiden full-year contribution from the acquisition of Donnelley Language Solutions, completed in July 2018. On a pro-forma basis - had DLS been part of SDL for all of both years - revenue rose 5.3%.
Language Services revenue rose 20% to GBP262.1 million, within which Premium Services revenue was up to GBP100.5 million from GBP63.5 million in 2018.
Language Technologies revenue grew 7.6% to GBP53.6 million. Finally, Content Technologies revenue was up 9.6% to GBP60.6 million.
Chief Executive Adolfo Hernandez said: "SDL's 2019 financial results reflect a year of successful execution and the hard work and investments of prior years. We made strong progress against our strategic objectives. We significantly grew our premium services revenues, benefited from systems investment and our business process automation programme, and delivered industry-leading product innovation, most notably with the launch of SDL Language Cloud and our world-class Neural Machine Translation product suite."
Looking ahead, SDL said the Covid-19 outbreak has yet to hit its revenue or sales pipeline, but said it is "early days" for its customers.
The company said it is in a "strong" financial position, with a GBP70 million committed revolving credit facility, plus a GBP50 million accordion facility, which matures in July 2023. SDL has drawn down GBP63 million on the RCF to ensure that it has sufficient short-term liquidity.
SDL said it will look to reduce costs in 2020 by GBP8 million, and part of this is not paying final 2019 dividend. For 2018, SDL paid a 7.0 pence final, and full-year, dividend. It said it will revisit the dividend once its outlook has become more clear.
Hernandez continued: "In 2020, SDL has responded at speed and scale to the new circumstances imposed by the global public health crisis. Although normal revenue performance has persisted to date, it is still too early to assess the potential impact on sales in the coming quarters.
"However, it is prudent to assume that the disruption to business activity globally could lead to a reduction in sales across Language Services and SDL's technology businesses. We have therefore put a phased set of mitigation plans in place. In the first phase, SDL is taking steps to control variable external costs, discretionary costs and optimise working capital. We are keeping the situation under close review and will take further actions as necessary."
By Paul McGowan; [email protected]
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