RNS Number : 5224A
SDL PLC
04 August 2008
4 August 2008
SDL PLC
Interim results for the six months ended 30 June 2008
Continuing take-up of Global Information Management
supports strong growth across business
SDL plc (*SDL* or *the Group*), a leader in the emerging market for Global Information Management (GIM) solutions, is pleased to announce
its unaudited interim results for the six months ended 30 June 2008.
Unaudited6 Unaudited6 % Change
monthsto30 monthsto30
June2008�'000 June2007�'000
Income Statement:
Revenue 76,007 54,478 +40%
Profit before tax and 11,864 8,714 +36%
amortisation of intangible
assets
Profit before tax 9,148 7,178 +27%
Earnings per ordinary share - 8.82 7.70 +15%
basic (pence)
Adjusted earnings per ordinary 11.55 9.52 +21%
share * basic (pence)*
Balance Sheet:
Total equity 125,452 101,771
Cash and cash equivalents 15,978 15,965
Interest bearing loans and (7,156) (11,552)
borrowings
* Note * the adjusted earnings per share comparatives have been restated to reflect the tax effects of the amortisation of intangible fixed
assets. Previously the Group added back the amortisation only and not the related tax benefit / charge.
Highlights:
� Results significantly ahead of expectations
o 24% organic revenue growth (16% in constant currency)
o 16% of revenue growth from acquisitions
� Good growth across all divisions:
o Technology segment revenue doubled to �25m
� 40% organic growth
� Full 6 months contribution from Tridion
o Translation Services revenue up 20%
� New customers include:
o Cerner, Premier Farnell and Genzyme (SDL Enterprise Products)
o Metlife, State of Minnesota, Hughes and Boston Consulting (SDL Tridion)
� Successful integration of Idiom
� Strong cash flow from operations at �8.4m
Mark Lancaster, Chairman and Chief Executive of SDL, commented:
*I am particularly pleased with the performance of the Group in the first half. Our GIM business continues to gain traction as companies
increasingly need to unify the entire localisation supply chain, demonstrated by a good performance from the core technology operations as
well as a full six months contribution from Tridion. In translation services the Group*s business process outsourcing supports a large part
of the underlying organic growth, in particular with those existing clients with the GIM technology platform. The integration of Idiom is
continuing in line with expectations and remains on target to achieve break-even at the operating margin by the end of the year.
*Creating and managing global content is SDL*s business and the strong results for the first half of 2008 support the view that it remains a
high priority for global businesses generally. Despite a deterioration in the global macro-economic environment, SDL is continuing to see
positive trading across most of the markets for the services and technology businesses. We continue to carefully monitor the macro-economic
conditions, which could cause a reduction in translation services or technology solutions spend. However, we have entered the second half of
the financial year with a strong sales pipeline that gives us confidence for the year as a whole.*
For further information please contact:
SDL plc Tel: 01628 410 127
Mark Lancaster, Chief ExecutiveAlastair Gordon, Finance
Director
Financial Dynamics Tel: 020 7831 3113
Juliet Clarke / Helen Thomas
About SDL
SDL is the leader in Global Information Management (GIM) solutions that empower organizations to accelerate the delivery of high-quality
multilingual content to global markets. Its enterprise software and services integrate with existing business systems to manage the delivery
of global information from authoring to publication and throughout the distributed translation supply chain.
Global industry leaders rely on SDL to provide enterprise software or hosted services for their GIM processes, including ABN-Amro, Best
Western, Bosch, Canon, Chrysler, CNH, Hewlett-Packard, Microsoft, Philips, SAP, Sony, SUN Microsystems and Virgin Atlantic.
SDL has implemented more than 480 enterprise GIM solutions, has deployed over 150,000 software licenses across the GIM ecosystem and
provides access to on-demand translation portals for 10 million customers per month. Over 1,000 service professionals deliver consulting,
implementation and language services through its global infrastructure of more than 50 offices in 30 countries. For more information, visit
www.sdl.com
All trademarks are the property of their respective owners.
Chairman's Statement
Summary Performance
I am very pleased to report an extremely strong performance by SDL in the first half of 2008, with both revenue and operating profits
significantly ahead of market expectations. The prime drivers for the increase over the expectations to date for 2008 are the solid organic
growth from both the Enterprise and Desktop Technology divisions, a full six month*s contribution from Tridion, which was acquired in May
2007, and an organic growth of 20 percent within the Translation Services business. Total revenues were up 40 percent at �76.0 million
(2007: �54.5 million), with approximately 24 percent of this revenue growth being organic and 16 percent contributed by acquisitions. The
Group*s revenue has benefited from the strength of the Euro, which has contributed approximately 8 percent of the overall increase in
revenue. Profit before tax and amortisation of intangible assets has increased by 36 percent to �11.9 million (2007: �8.7 million). The net
cash position was �8.8 million at 30 June 2008 (31 December 2007: �15.5 million), which is after the payment of �13.7 million for the acquisition of Idiom Technologies Inc in February 2008.
Global Information Management Technology
SDL Trados Technology and SDL Enterprise Technologies
Both elements of the SDL technology segment saw revenue increases of approximately 40 percent over the same period in 2007. The SDL
Enterprise Technologies business has experienced an increase in new customer licence sales, adding customers such as Genzyme, Cerner
Corporation and Premier Farnell to its portfolio of leading global businesses. SDL Trados Technology, a business unit which focuses on
productivity software for the translation supply chain, saw a 37 percent increase in new licence revenue growth.
Both business units attribute this strong demand to the increasing need for companies to unify processes across the entire localisation
supply chain, creating significant efficiencies and quicker time-to-market by utilising a common platform for localisation.
SDL Tridion (global web content management business unit)
SDL Tridion*s focus on enabling customers to deliver consistent and persuasive customer experiences in multiple languages across multiple
web sites and channels remains robust with a solid number of new customer wins in the first half of 2008, including Metlife, State of
Minnesota, Hughes and Boston Consulting. SDL Tridion has seen sales revenues increase by 11 percent compared to the first half of 2007. The
business has performed extremely well in the US market, although this overall growth has been tempered by the strength of the Euro. In
contrast SDL Tridion*s domestic markets have been less buoyant, however we are pleased to be entering the second half of 2008 with a solid
sales pipeline for the Tridion business unit.
Translation Services
The Translation Services segment grew organically by 20% during the first half of 2008, being 13 percent at constant currency as a result of
the effect of the strengthening of the Euro. A significant element of the underlying organic growth comes from SDL*s established client
base, to which the Group provides business process outsourcing, in particular those that have adopted SDL*s Global Information Management
(GIM) technology platform. Following its adoption of GIM in late 2007, Renault has provided SDL with significant levels of localisation
revenues in the first half of 2008 and this has been complemented by increased revenues from established customers such as Case New Holland,
Philips, Adobe and Dell. Scaling up to these additional volumes and improving the services margins is made possible by SDL*s unique mix of
leveraging our technology, global infrastructure and internal processes. The structure and integrated nature of our regional offices allows
considerable scaling and provides extensive resource capacity which, when coupled with our Knowledge-based Translation solutions, has transformed the landscape for translation, speeding up
time to market and significantly reducing costs for our clients.
Acquisition of Idiom Technologies Inc.
The acquisition of Idiom Technologies Inc for �13.7 million, announced on 11 February 2008, confirmed SDL*s leading position in delivering
GIM systems to the market. The integration of SDL*s and Idiom*s technology solutions is progressing to plan and will provide improved
efficiencies of scale and shared intellectual property, providing a smoother solution for managing the translation supply chain. Idiom is
integrating well into the organisation and, in line with our expectations, is on target to achieve break-even at the operating margin by the
end of the year.
Vision and Strategy for Global Information Management
SDL*s GIM technology accelerates the delivery of global content into local markets, ensures the operational consistency of branding and
reduces the costs to translate content into multiple languages. In order to provide comprehensive global content management the complete
supply chain of those involved in the creation and maintenance of global content must be included in the solution. SDL*s technology
automates the delivery of global content in a controlled manner throughout this entire supply chain. It is now estimated that over 90
percent of the Global 1000 companies rely on SDL Technology products, creating a solid foundation for future growth in a world that
increasingly communicates across political and cultural boundaries.
Outlook
Creating and managing global content is SDL*s business and the strong results for the first half of 2008 support the view that it remains a
high priority for global businesses generally. Despite a deterioration in the global macro-economic environment SDL is continuing to see
positive trading across most of the markets for the services and technology businesses. We continue to carefully monitor the macro-economic
conditions, which could cause a reduction in translation services or technology solutions spend. However, we have entered the second half of
the financial year with a strong sales pipeline that gives us confidence for the year as a whole.
Mark Lancaster
Chairman and CEO
SDL plc
4 August 2008
SDL plc
Interim Condensed Consolidated Income Statement
Notes Unaudited6 months Unaudited6 months AuditedYear to31
to30 June2008�'000 to30 June2007�'000 December2007�*000
Continuing Operations
Saleof goods 11,314 7,370 17,930
Rendering of services 64,693 47,108 99,479
REVENUE (3) 76,007 54,478 117,409
Cost of sales (34,282) (26,368) (54,521)
GROSS PROFIT 41,725 28,110 62,888
Administrative expenses (29,816) (19,273) (45,695)
OPERATING PROFIT 11,909 8,837 17,193
BEFOREAMORTISATION OF
INTANGIBLE ASSETS
Amortisation of intangible (2,716) (1,536) (4,294)
assets
OPERATING PROFIT (4) 9,193 7,301 12,899
Finance costs (355) (367) (628)
Finance revenue 319 244 489
Share of loss of associate (9) - (35)
PROFIT BEFORE TAX 9,148 7,178 12,725
UKtax expense (5) (291) (355) (455)
Foreign tax expense (5) (2,229) (1,784) (3,100)
Tax expense (5) (2,520) (2,139) (3,555)
PROFIT FOR THE PERIOD 6,628 5,039 9,170
Profit for the period 6,598 5,039 9,170
attributable to equityholders
of the parent
Minority interest 30 - -
6,628 5,039 9,170
Pence Pence Pence
Earnings per ordinary share - (6) 8.82 7.70 13.07
basic (pence)
Earnings per ordinary share * (6) 8.58 7.42 12.83
diluted (pence)
Adjusted earnings per ordinary (6) 11.55 9.52 17.74
share* basic (pence)*
Adjusted earnings per ordinary (6) 11.23 9.17 17.42
share* diluted (pence)*
* Note * the adjusted earnings per share comparatives have been restated to reflect the tax effects of the amortisation of intangible fixed
assets. Previously the Group added back the amortisation only and not the related tax benefit / charge.
SDL plc
Interim Condensed Consolidated Balance Sheet
Notes Unaudited30 Unaudited30 Audited31 December2007�'000
June2008�'000 June2007�'000
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 4,041 3,362 3,240
Intangible assets 116,722 99,816 102,300
Investment in an associate - - 256
Loan to associate - - 286
Deferred income tax 6,993 6,219 4,663
Rent deposits 420 293 333
128,176 109,690 111,078
CURRENT ASSETS
Trade and other receivables 36,631 29,976 33,687
Financial assets 11 169 -
Cash and cash equivalents 15,978 15,965 21,511
52,620 46,110 55,198
TOTAL ASSETS 180,796 155,800 166,276
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (31,440) (27,970) (32,048)
Interest bearing loans and (7) - (2,000) (2,000)
borrowings
Financial liabilities (668) - (793)
Current tax liabilities (7,199) (5,264) (5,948)
Provisions (36) (86) (58)
(39,343) (35,320) (40,847)
NON CURRENT LIABILITIES
Interest bearing loans and (7) (7,156) (9,552) (4,055)
borrowings
Other payables (563) (243) (215)
Deferred tax (7,558) (8,312) (7,541)
Provisions (724) (602) (602)
(16,001) (18,709) (12,413)
TOTAL LIABILITIES (55,344) (54,029) (53,260)
NET ASSETS 125,452 101,771 113,016
EQUITY
Share capital 754 744 750
Share premium 92,244 91,687 91,866
Shares to be issued 406 541 541
Retained earnings 22,410 11,244 14,921
Foreign exchange differences 9,780 (2,445) 4,938
TOTAL EQUITY ATTRIBUTABLE 125,594 101,771 113,016
TOEQUITY HOLDERS OF THE PARENT
Minority interest (142) - -
125,452 101,771 113,016
The Interim Financial Information presented in this Interim Report was approved by the Board of Directors on 4 August 2008.
SDL plc
Interim Condensed Consolidated Statement of Changes in Equity
ShareCapital SharePremium Sharesto beIssued RetainedEarnings ForeignExchangeDiffe Minorityinterest
Total
rences
�*000 �*000 �*000 �*000 �*000 �*000
�*000
At 31 December 2006(audited) 625 51,096 66 4,334 (1,615) -
54,506
Currency - - - - (894) -
(894)
translationdifferences on
foreigncurrency intangiblesand
net investments
Currency - - - - 64 -
64
translationdifferences on
foreigncurrency equity loansto
foreign subsidiaries
Deferred taxation onshare - - - 1,314 - -
1,314
based payments
Tax credit forshare options - - - 192 - -
192
Total income andexpense for - - - 1,506 (830) -
676
the periodrecogniseddirectly
in equity
Net profit for the period - - - 5,039 - -
5,039
Total income andexpense for - - - 6,545 (830) -
5,715
the period
Arising on share options 5 475 - - - -
480
Arising on acquisitionof 1 65 (66) - - -
-
Lingua Franca
Arising on acquisitionof 113 39,916 - - - -
40,029
Tridion
Arising on acquisitionof - 135 541 - - -
676
Passolo
Share-based payments - - - 365 - -
365
At 30 June 2007(unaudited) 744 91,687 541 11,244 (2,445) -
101,771
Currency - - - - 6,467 - 6,467
translationdifferences on
foreigncurrency intangiblesand
net investments
Currency - - - - 916 - 916
translationdifferences on
foreigncurrency equity loansto
foreign subsidiaries
Deferred taxation onshare - - - (1,673) - - (1,673)
based payments
Tax credit forshare options - - - 753 - - 753
Total income andexpense for - - - (920) 7,383 - 6,463
the periodrecognised directly
inequity
Net profit for the period - - - 4,131 - - 4,131
Total income andexpense for - - - 3,211 7,383 - 10,594
the period
Arising on share options 6 180 - - - - 186
Arising on acquisitionof - (1) - - - - (1)
Tridion
Share-based payments - - - 466 - - 466
At 31 December 2007(audited) 750 91,866 541 14,921 4,938 - 113,016
Currency - - - - 5,160 - 5,160
translationdifferences on
foreigncurrency intangiblesand
net investments
Currency - - - - (318) - (318)
translationdifferences on
foreigncurrency equity loansto
foreign subsidiaries
Deferred taxation onshare - - - 201 - - 201
based payments
Total income andexpense for - - - 201 4,842 - 5,043
the periodrecognised directly
inequity
Net profit for the period - - - 6,598 - 30 6,628
Total income andexpense for - - - 6,799 4,842 30 11,671
the period
Arising on share options 4 243 - - - - 247
Minority interest arisingon - - - - - (172) (172)
the acquisition ofTrisoft
Arising on acquisitionof - 135 (135) - - - -
Passolo
Share-based payments - - - 690 - - 690
At 30 June 2008(unaudited) 754 92,244 406 22,410 9,780 (142) 125,452
These amounts are attributable to equity holders of the parent company.
SDL plc
Interim Condensed Consolidated Cash Flow Statement
Unaudited6 months Unaudited6 months AuditedYear to31
to30 June2008�'000 to30 June2007�'000 December2007�'000
Profit before tax 9,148 7,178 12,725
Depreciation of property, 746 645 1,506
plant and equipment
Amortisation of intangible 2,716 1,536 4,294
assets
Finance costs 355 367 628
Finance revenue (319) (244) (489)
Share of loss of associate 9 - 35
Minority interest (30) - -
Share-based payments 690 365 831
Deferred taxation on share 201 1,506 586
based payments
Gain on disposal of property, - - 17
plant and equipment
(Increase) in debtors (450) (4,324) (7,967)
(Decrease)/increase in current (4,310) (664) 4,114
liabilities and provisions
Exchange differences 726 (1,681) 2,098
Income tax paid (1,086) (539) (2,373)
NET CASH FLOWS GENERATED 8,396 4,145 16,005
FROMOPERATING ACTIVITIES
CASH FLOWS FROM INVESTING
ACTIVITIES
Payments to acquire property, (829) (693) (1,425)
plant and equipment
Receipts from sale of 6 1 46
property, plant and equipment
Purchase of Tridion Holding BV - (47,139) (47,139)
Purchase of PASS Process - (608) (608)
AutomationSoftware Systems
Engineering GmbH
Purchase of Idiom Technologies (13,732) - -
Inc
Net cash acquired with 343 11,813 11,813
subsidiaries
Payment to acquire investment - - (577)
in associate
Interest received 319 244 489
NET CASH FLOWS USED IN (13,893) (36,382) (37,401)
INVESTINGACTIVITIES
SDL plc
Interim Condensed Consolidated Cash Flow Statement
Unaudited6 months Unaudited6 months AuditedYear to31
to30 June2008�'000 to30 June2007�'000 December2007�'000
FINANCING ACTIVITIES
Net proceeds from issue of 247 40,644 40,829
ordinary share capital
Repayment of interest bearing (10,332) (1,000) (6,492)
loans and borrowings
Proceeds from new loans 9,500 1,023 1,023
Interest paid (355) (367) (628)
NET CASH FLOWS GENERATED (940) 40,300 34,732
FROMFINANCING ACTIVITIES
(DECREASE)/INCREASE IN CASH (6,437) 8,063 13,336
ANDCASH EQUIVALENTS
MOVEMENT IN CASH AND CASH
EQUIVALENTS
Cash and cash equivalents at 21,511 7,978 7,978
start of the period
(Decrease)/increase in cash (6,437) 8,063 13,336
and cash equivalents
Effect of exchange rates on 904 (76) 197
cash and cash equivalents
Net cash and cash equivalents 15,978 15,965 21,511
at end of the period
SDL plc
Notes to the Interim Condensed Consolidated Financial Statements
1. Basis of preparation and accounting policies
Basis of preparation
The interim condensed consolidated financial statements for the six months ended 30 June 2008 have been prepared in accordance with IAS 34
Interim Financial Reporting.
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial
statements, and should be read in conjunction with the Group*s annual financial statements as at 31 December 2007.
Significant accounting policies
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those
followed in preparation of the Group*s annual financial statements for the year ended 31 December 2007.
2. Business Combinations
Acquisition of Idiom Technologies Inc
On 8 February 2008 the Group acquired 100% of the share capital of Idiom Technologies Inc, a company based in the USA.
The total cost of the combination comprised $26.8 million (�13.7 million) and was funded through both a loan from the Bank of $19.0 million
(�9.5 million), and from the Group*s existing cash resources.
The provisional fair value of the identifiable assets and liabilities of Idiom Technologies Inc as at the date of acquisition were:
Book value Provisionalfair valueto Group
�*000 �*000
Intangible assets - 3,905
Property, plant and equipment 146 167
Cash and cash equivalents 195 195
Trade receivables 598 595
Other receivables 2,609 2,612
Loans from third parties (1,838) (1,838)
Trade payables (769) (769)
Other payables (3,005) (2,315)
Deferred tax assets - 2,240
Deferred tax liabilities - (1,093)
Net (liabilities)/assets (2,064) 3,699
Provisional Goodwill arising on 10,033
acquisition
13,732
All fair values included in the above analysis are provisional fair values which are based upon management's best estimate at the date of
preparation of the financial statements. The fair values are only provisional due to the proximity of the acquisition to the date of the
reporting period.
Discharged by: �*000
Costs associated with the acquisition 146
Cash paid to shareholders 13,586
Total cash paid 13,732
Cash outflow on the acquisition:
Net cash and cash equivalentsacquired with the subsidiary 195
Total cash paid (13,732)
Net cash outflow (13,537)
From the date of acquisition Idiom Technologies Inc has contributed �1.7 million of revenue and a loss of �0.4 million to the net profit
before tax of the Group. If the combination had taken place at the beginning of the year, the profit before tax and amortisation of
intangible assets for the Group would have been �11.5 million and revenue from continuing operations would have been �76.4 million.
Included in the �10.0 million of goodwill recognised above are certain intangible assets that cannot be individually separated and reliably
measured from the acquiree due to their nature. These items include customer loyalty and assembled workforce.
Consolidation of Trisoft NV
In December 2007 the Group acquired a 49% interest in the share capital of Trisoft NV, a company based in Belgium. At the time of the
acquisition, SDL plc entered into a call option agreement with the remaining shareholders allowing the Group to acquire the remaining 51% on
a predetermined valuation formula. This call option was not exercisable until 7 June 2008 and consequently the 49% investment was accounted
for as an investment in an associate in the 2007 accounts.
While SDL plc has not exercised its call option since 7 June 2008, the Directors consider that the Group has power over more than 50% of the
voting rights by virtue of the existence of the exercisable call option and therefore the results of Trisoft NV have been consolidated with
those of the Group. As a result the interest in Trisoft NV was treated as an associate company from 1 January 2008 to 7 June 2008 and has
been consolidated into the Group since that date.
The total cost of the 49% interest in Trisoft NV was EUR0.8 million (�0.6 million) and was funded from the Group*s existing cash resources.
The Group has also loaned Trisoft NV EUR400,000.
The provisional fair value of the identifiable assets and liabilities of Trisoft NV as at 7 December 2007 were:
Book value Provisionalfair valueto Group
�*000 �*000
Intangible assets 323 185
Property, plant and equipment 14 14
Cash and cash equivalents 148 148
Trade receivables 63 63
Other receivables 23 23
Loans from third parties (94) (94)
Trade payables (54) (54)
Other payables (212) (212)
Deferred tax assets - 236
Deferred tax liabilities - (52)
Net assets 211 257
Provisional Goodwill arising on 320
acquisition
577
All fair values included in the above analysis are provisional fair values which are based upon management's best estimate at the date of
preparation of the financial statements. The fair values are only provisional due to the proximity of the consolidation to the date of the
reporting period.
Discharged by*: �*000
Costs associated with the acquisition 4
Cash paid to shareholders 573
Total cash paid 577
Cash outflow on the acquisition:
Net cash and cash equivalentsacquired with the subsidiary 148
Total cash paid (577)
Net cash outflow (429)
* in 2007
From the date of consolidation Trisoft NV has contributed �0.1 million of revenue and a profit of less than �0.1 million to the net profit
before tax of the Group. If the consolidation had taken place at the beginning of the year, the profit before tax and amortisation of
intangible assets for the Group would have remained the same based on the 49% interest but revenue from continuing operations would have
been increased by �0.6 million to �76.6 million. Included in the �0.3 million of goodwill recognised above are certain intangible assets
that cannot be individually separated and reliably measured from the acquiree due to their nature. These items include customer loyalty and
assembled workforce.
Acquisition of Tridion Holding BV in 2007
On 18 May 2007 the Group acquired 100% of the share capital of Tridion Holding BV, a company based in the Netherlands. The goodwill
arising on the acquisition was provisionally calculated as �25,020,000 in the 31 December 2007 audited accounts and the intangible assets
fair valued at �17,727,000. Following a detailed review, the goodwill has been finalised at a value of �26,216,000, being an increase of
�1,196,000, (being the net of �1,661,000 reclassified from intangible assets and an adjustment to the fair value of the deferred tax
liability of �465,000), and the intangibles have been finalised at a fair value of �16,066,000, a decrease of �1,661,000.
3. Segment information
The Group operates in the Global Information Management industry. The primary reporting format is determined to be business segments, being
Translation Services and Technology.
The Translation Services segment is the provision of a translation service to customer*s multilingual content.
The Technology segment is the sale of enterprise and desktop technology developed to help automate and manage multilingual assets, including
web sites, together with associated consultancy and other services.
The Group*s geographical segments are based on the geographical destination of revenues.
Six months ended 30 June 2008 (unaudited)
TranslationServices�'000 Technology �*000 Total �'000
Revenue 51,142 24,865 76,007
Segment results 8,107 1,077 9,184
Unallocated expenses (36)
Profit before tax 9,148
The Technology segment result before amortisation of intangible assets is a profit of �3.4 million.
Six months ended 30 June 2007 (unaudited)
TranslationServices�'000 Technology �*000 Total �'000
Revenue 42,510 11,968 54,478
Segment results 7,407 (106) 7,301
Unallocated expenses (123)
Profit before tax 7,178
The Technology segment result before amortisation of intangible assets is a profit of �1.0 million.
Year ended 31 December 2007 (audited)
TranslationServices�'000 Technology �*000 Total �'000
Revenue 84,178 33,231 117,409
Segment results 12,670 194 12,864
Unallocated expenses (139)
Profit before tax 12,725
The Technology segment result before amortisation of intangible assets is a profit of �3.7 million.
Revenue by geographical destination was as follows:
Unaudited6 months Unaudited6 months AuditedYear to31
to30 June2008�'000 to30 June2007�'000 December2007�'000
United Kingdom 6,436 4,381 11,148
Rest of Europe 30,555 20,560 46,368
USA 27,720 20,950 41,229
Rest of North America 5,516 5,399 10,437
Rest of the World 5,780 3,188 8,227
76,007 54,478 117,409
4. Operating profit
Unaudited6 months Unaudited6 months Audited Year to31
to30 June2008�'000 to30 June2007�'000 December2007�'000
Is stated after
charging/(crediting):
Research and development 3,080 2,298 5,374
expenditure
Bad debt expense 55 - 159
Depreciation of owned and 746 645 1,506
leased assets
Amortisation of intangibles * 2,330 1,150 3,523
tax deductible/IAS 38related
Amortisation of intangibles * 386 386 771
non tax deductible
Operating lease rentals for 25 32 69
plant and machinery
Operating lease rentals for 2,437 1,712 3,737
land and buildings
Operating lease rentals (88) (75) (150)
received for land and
buildings
Net foreign exchange 2,328 (72) 644
differences
(Gain)/loss on foreign (136) (305) 1,267
exchange derivatives
5. Taxation
Unaudited6 months Unaudited6 months AuditedYear to31
to30 June2008�'000 to30 June2007�*000 December2007�*000
UKcorporation tax:
UKcurrent tax on income for 291 337 -
the period
Adjustments in respect of - - (131)
prior periods
Tax credit for share options - 192 945
taken to equity
291 529 814
Foreign tax:
Current tax on income for the 2,545 1,784 3,311
period
Adjustments in respect of - - (36)
prior periods
2,545 1,784 3,275
Total current taxation 2,836 2,313 4,089
Deferred taxation:
Origination and reversal of (517) (1,488) (104)
timing differences
Adjustments in respect of - - (71)
prior periods
Deferred tax credit/(debit) 201 1,314 (359)
for share optionstaken to
equity
Total deferred taxation (316) (174) (534)
Tax Expense 2,520 2,139 3,555
Due to the requirements of IAS 12, in conjunction with IFRS 2, the Schedule 23 tax credit for share options exercised and deferred taxation
on unexpired options have partly been recorded in equity. For the 6 months ended 30 June 2008 this has the effect of increasing the
effective tax rate by approximately 2.2% (at 31 December 2007: 4.6%; at 30 June 2007: 21.0%).
6. Earnings per share
Unaudited6 months Unaudited6 months Audited Year to31
to30 June2008�'000 to30 June2007�*000 December2007�*000
Profit for the period 6,598 5,039 9,170
attributable to equity
holdersof the parent
m m m
Basic weighted average number 75.1 65.5 70.2
ofshares (million)
Employee share options and 2.2 2.5 1.3
sharesto be issued (million)
Diluted weighted average 77.3 68.0 71.5
numberof shares (million)
Adjusted earnings per share:
Unaudited6 months Unaudited6 months Audited Year to31
to30 June2008�'000 to30 June2007�'000 December2007�*000
Profit for the period 6,598 5,039 9,170
attributable to equity
holdersof the parent
Amortisation of intangible 2,716 1,536 4,294
fixed assets
Adjusted profit for the period 9,314 6,575 13,464
attributable toequity holders
of the parent
Tax expense 2,520 2,139 3,555
Tax benefit associated with 653 345 1,015
the amortisation ofintangible
fixed assets
Adjusted tax expense 3,173 2,484 4,570
m m m
Basic weighted average number 75.1 65.5 70.2
of shares (million)
Diluted weighted average 77.3 68.0 71.5
number of shares (million)
Pence Pence Pence
Adjusted earnings per ordinary 11.55 9.52 17.74
share* basic (pence)*
Adjusted earnings per ordinary 11.23 9.17 17.42
share* diluted (pence)*
*Note * the adjusted earnings per share comparatives have been restated to reflect the tax effects of the amortisation of intangible fixed
assets. Previously the Group added back the amortisation only and not the related tax benefit / charge. The previously disclosed adjusted
earnings per share figures on the old policy were as follows:
Unaudited6 months AuditedYear to31 December2007
to30 June2007
Pence Pence
Adjusted earnings per ordinary 10.04 19.19
share * basic (pence)
Adjusted earnings per ordinary 9.68 18.84
share * diluted (pence)
Unaudited6 months to30 AuditedYear to31 December2007
June2007
m m
Diluted weighted average 68.0 71.5
number of shares (million)
7. Interest-bearing loans
On 7 February 2008, as part of the short term funding for the acquisition of Idiom Technologies Inc, the Group borrowed �9,500,000 using the
Group*s revolving facility at LIBOR + 0.85%. In addition the Group assumed a �1,932,000 loan with the acquisition of Idiom Technologies
Inc.
In the first 6 months of 2008 the Group repaid �8.4 million of the revolving credit facility, bearing an interest rate of LIBOR + 0.85%.
The Group also repaid the loan of �1.9 million assumed upon the acquisition of Idiom Technologies Inc.
8. Share-based payments
On 28 February 2008, 856,300 stock options were issued to certain key senior executives and employees of the SDL Group. 714,300 of these
were issued to employees of Tridion Holding BV in conjunction with the acquisition of Tridion Holding BV. The exercise price of the
options of 278.92 pence was equal to the market price of the shares on the date of the issue.
9. Derivatives and other financial instruments
At 30 June 2008 the Group had forward contracts to sell EUR2 million each month through to 30 November 2008 at EUR1.374 to �1.00. As at 30
June 2008 the Group recognised an unrealised loss of �657,000 in relation to this hedge (31 December 2007 * unrealised loss of �793,000).
10. General notes
The financial information in these interim statements does not constitute statutory accounts as defined in Section 240 of the Companies Act
1985. The financial information for the year ended 31 December 2007 is based on the statutory accounts for the financial year ended 31
December 2007. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the registrar of companies.
11. Events after the balance sheet date
There are no known events occurring after the date of the balance sheet that require disclosure.
Responsibility Statement by the Management Board
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim
consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group,
and the interim management report of the Group includes a fair review of the development and performance of the business and the position of
the Group, together with a description of the principal opportunities, risks and uncertainties associated with the expected development of
the Group for the remaining months of the financial year.
For and on behalf of the Board
Alastair Gordon
This information is provided by RNS
The company news service from the London Stock Exchange
END
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