SDL Holds Dividend Amid Full Year Profit On Non-Core Asset Disposals

6th Mar 2018 09:53

LONDON (Alliance News) - SDL PLC held its dividend unchanged Tuesday after it swung back to a profit in 2017 amid profitable non-core unit disposals, as it looks to grow sustainably in 2018.

In 2017, the translation services firm swung to GBP29.9 million pretax profit from a GBP15.8 million loss the year prior. Reported revenue remained fairly flat at GBP287.7 million from GBP289.9 million the year before.

"2017 was a period of operational heavy-lifting and it is frustrating that, as we drove our transformation, we were not able to perform consistently in financial terms in all areas of the business," SDL Chief Executive Officer Adolfo Hernandez said. "Our financial results were impacted by weak gross margins in Language Services in the first half and by software deal slippage towards the end of the period. In each case, we initiated detailed recovery plans."

"Furthermore we continue to modernise our business systems, processes and structure to create a more robust and forecastable business," Hernandez added. "More positively, SDL took a number of significant strategic steps forward in 2017, most notably the major investment in our automation programme [Helix], the divestment of non-core businesses, the launch of neural Machine Translation and the strong growth of our premium verticals."

Revenue performance was weaker due to the impact of discontinued operations, which added GBP25.2 million to revenue in 2016 but only GBP2.0 million in 2017. Revenue from continuing operations advanced to GBP285.7 million from GBP264.7 million the year before.

Profit performance was helped by the profit of disposal of businesses of GBP20.6 million compared to a GBP21.0 million loss the year prior.

SDL proposed a 6.2 pence dividend per share for 2017, flat on 2016. SDL was net cash GBP22.7 million compared to GBP21.3 million the year prior.

"As expected, we enter 2018 with another packed agenda," Hernandez said. "We will be rolling out Helix to our Language Services business and we expect to see the benefits of productivity and margin gains in the second half of the year. We will continue to focus on sustainable sales growth, through account management and by extending our premium solutions strategy. In our technology businesses, we have a number of key launches and we will continue to make the investment required to modernise our platforms and products.

"Operationally, we are focused on improving our infrastructure and Business Intelligence and we will monitor the cost base and drive efficiencies where we can," Hernandez continued. "We have a sound strategy to take SDL forward and a significant market opportunity to pursue. We are highly cognisant of the need to balance growth, investment and profitability through this period of transformation."

Shares in SDL were 2.2% lower at 408.64p on Tuesday.

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