15/09/2005
Translation services business SDL production strong results for the six months to 30 June as management shifted its focus away from building infrastructure and towards increasing sales. ‘Our strategy has always been to invest in technology and global infrastructure,’ chief executive Mark Lancaster elaborates, ‘but we’re now starting to focus on sales more and that’s changing the shape of the business’. The effects have been startling. First half sales rose 11% to £34.1m and profits, in turn, surged 91% to £3.1m.
The company’s software and services help multi-national businesses adapt corporate information for relevance in different languages and cultures. Offerings range from simple translation tools through to full localisation project management and, as more-and-more business look to build an international presence, such services are becoming increasingly popular. Clients already include the likes of DaimlerChrysler, Hasbro and Sony.
In July, SDL acquired global information management business TRADOS in a transaction that could eventually be worth as much as £33m and, as a result, Lancaster now says ‘I think we’ve got most of the pieces in place now.’
Analysts seem to agree. On the back of SDL’s interims house broker Investec lifted its full year profit forecasts from £4.8m to £6m, with a total of £9.4m expected in 2006. Trading on a prospective p/e of 24.3 the shares aren’t cheap but look worth picking up on signs of weakness.
| Market cap: | £96.6m |
| PE Forecast: | 24.3 |
| Share price: | 163p |
| LSE | £157.34m |
207.75p
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7.50p
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| 15/09/2005 |
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