TIDMSDL
RNS Number : 7623N
SDL PLC
24 February 2009
24 February 2009
SDL PLC
Preliminary results for the year ended 31 December 2008
Strong growth supported by robust repeat revenue streams and further progress in
implementing GIM strategy
SDL plc ("SDL" or "the Group"), a leader in the emerging market for Global
Information Management (GIM) solutions, is pleased to announce its unaudited
preliminary results for the year ended 31 December 2008.
+----------------------------------------------+----------+----------+----------+
| | 2008 | 2007 | % |
| | GBP'000 | GBP'000 | Change |
+----------------------------------------------+----------+----------+----------+
| Income Statement: | | | |
+----------------------------------------------+----------+----------+----------+
| Revenue | 158,775 | 117,409 | +35 |
+----------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------+----------+----------+----------+
| Profit before tax and amortisation of | 25,593 | 17,019 | +49 |
| intangibles | | | |
+----------------------------------------------+----------+----------+----------+
| Profit before tax | 19,850 | 12,725 | +56 |
+----------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------+----------+----------+----------+
| Earnings per ordinary share - basic (pence) | 19.21 | 13.07 | +47 |
+----------------------------------------------+----------+----------+----------+
| Adjusted earnings per ordinary share - basic | 24.99 | 19.19 | +41 |
| (pence) | | | |
+----------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------+----------+----------+----------+
| Balance Sheet: | | | |
+----------------------------------------------+----------+----------+----------+
| Total equity | 163,029 | 113,016 | +44 |
+----------------------------------------------+----------+----------+----------+
| Cash and cash equivalents | 31,227 | 21,511 | +45 |
+----------------------------------------------+----------+----------+----------+
| Interest bearing loans and borrowings | - | 6,055 | -100 |
+----------------------------------------------+----------+----------+----------+
Highlights:
* Results significantly ahead of expectations
* 35% revenue growth (22% in constant currency)
* 24% organic revenue growth
* Good growth across all divisions:
* Technology segment revenue growth of 59%
* Strong desktop organic growth of 30% year on year
* Effective integration of Idiom and Trisoft acquisitions
* Tridion revenue growth of 16%
* Translation Services revenue up 26%
* New customers include:
* EMC, Fair Isaac, Vesta Wind Systems and Sony Europe (SDL Enterprise)
* Microsoft, Citrix Systems, Symantec and Sabre Inc. (SDL Trados)
* As anticipated, Idiom achieved breakeven run rate at the operating margin level
by December 2008
* Strong cash flow from operations at GBP26.4m (2007: GBP16.0m)
* Net Cash of GBP31.2m at the end of 2008
* Solid pipeline and conversion rate across technology businesses maintained
Mark Lancaster, Chairman and Chief Executive of SDL, commented:
"It is my pleasure to report that SDL has had another strong year in 2008, with
both revenue and operating profits significantly ahead of market expectations.
"With the continued deterioration of the worldwide economic climate, 2009 may
well be a challenging year. Our approach will therefore be appropriately
cautious. We are however fortunate that approximately 67% of our revenue is
derived from translation services and this recurring revenue stream has
historically proven to be robust and resistant to economic downturns; in
addition we have the benefit of the weak pound at present. We also have a net
cash position of a little over GBP31m in cash, which gives us the flexibility
and security desirable in the current environment.
"We are currently maintaining a solid pipeline and conversion rate across our
technology business units, although we are seeing some delays in converting
deals. We are also continuing to see good momentum in the technology markets we
operate in. As we progress through 2009 we expect to see more businesses
outsource their translation management, and, due to the group's leading position
in both technology infrastructure and services, this should lead to more
business moving to SDL solutions.
"We believe that the long term outlook for the SDL Group will continue to show
strong growth as businesses are attracted to the value and efficiencies a Global
Information Management Platform provides to global companies."
For further information please contact:
+-------------------------------------------------+--------------------------+
| SDL plc | Tel: 01628 410 127 |
+-------------------------------------------------+--------------------------+
| Mark Lancaster, Chief Executive | |
| John Hunter, Finance Director | |
+-------------------------------------------------+--------------------------+
| | |
+-------------------------------------------------+--------------------------+
| Financial Dynamics | Tel: 020 7831 3113 |
+-------------------------------------------------+--------------------------+
| Juliet Clarke / Ed Bridges / 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
It is my pleasure to report that SDL has had another strong year in 2008, with
both revenue and operating profits significantly ahead of market expectations.
The primary drivers for the growth in 2008 were the strong revenue contributions
from both the Language Technology divisions (increase of GBP19.5million or 59%)
and Translation Services divisions (increase of GBP21.9 million or 26%).
Revenues for the Group for 2008 were up 35% (22% at constant currency) at
GBP158.8 million (2007: GBP117.4 million), with approximately 24% of the revenue
growth being organic and 11% contributed by the 11 months of trading of Idiom
Inc, acquired in February 2008 and a full year of SDL Tridion. Profit before tax
and amortisation of intangible assets has increased by 49% to GBP25.6 million
(2007: GBP17.0 million).
Strong cash flow from operations of GBP26.4 million (2007: GBP16.0 million)
resulted in the Group holding net cash of GBP31.2 million at 31 December 2008
(2007: GBP15.5 million).
Technology (contributing GBP52.7 million or 33 % revenue to the Group and GBP6.9
million or 27% of the PBTA)
Language Technology divisions
SDL Enterprise Technologies business unit has experienced an increase in overall
new name licence sales of 61% during 2008 (inclusive of the Idiom acquisition),
adding customers such as EMC, Fair Isaac, Vestas Wind Systems and Sony Europe to
its portfolio of leading global businesses relying on a global information
management (GIM) strategy to provide local content for their international
business. The integration of Idiom Technologies Inc, acquired in February 2008,
has also progressed to plan, with the business unit achieving break even
operating margin by December 2008.
SDL Desktop Technologies, a business unit which focuses on productivity software
for the translation supply chain, has achieved a double digit revenue increase
of 30% year on year. Passolo's first full year post acquisition results yielded
a 36% increase in sales due to the successful leveraging of SDL customer base.
Both business units attribute their strong demand to our customers' need to
unify processes across the entire localization supply chain, utilizing a common
platform for localization thereby creating significant efficiencies and a
quicker time-to-market. In addition, SDL Trados Technologies announced major new
wins at blue chip companies including Microsoft, Citrix Systems, Symantec and
Sabre, Inc.
SDL Tridion - global web content management division
SDL Tridion continued to deliver strong revenue growth to the group, with
revenues of GBP24.3 million for the year up 16% on 2007. Most of SDL Tridion's
revenue growth came from the US, which produced solid results despite difficult
trading conditions for the fourth quarter in the US economy.
The gross margins for the technology group are now 76%. The net margins for
technology are 13%.
Translation Services division (contributing GBP106.1 million or 67% revenue to
the Group and GBP18.7 million or 73% of the PBTA)
The main focus of our Translation Service business unit was to add significant
value to our key large customer accounts through the automation of business
workflow and automated translation thereby creating significant time to market
and cost savings for our clients. As a result of this focused strategy, we were
able to grow our translation services revenue by 26% year on year to
GBP106.1million. We have continued to expand our network office infrastructure
to 55 offices in 30 countries over 5 continents by adding new offices in India
and Greece. In addition the improved integration with our technology has allowed
us to increase internal efficiencies, thereby maintaining gross margins in our
translation service divisions at 44% in 2008, Net margin increased to 18%.
Our Vision and Strategy for Global Information Management (GIM)
In a world that is shrinking through an ever improving communications
infrastructure, trading effectively in global markets is no longer an option for
large corporations but a necessity. The starting point to enable a business to
trade successfully in local markets is to communicate in the local language. The
enormity and complexity of translating and maintaining millions of words in many
formats in multiple languages is a major challenge for any global business.
SDL now provides over 500 enterprise solutions to the top global brands in the
world. SDL's Global Information Management (GIM) technology accelerates the
delivery of content into local markets, ensuring consistency of global brand and
significantly reducing the cost to translate content into multiple languages.
SDL leads the world in providing language technology, and in order to build on
this position we expect to launch a new, significantly enhanced Global
Information Management Platform in 2009. We have developed this new platform
over the last three years, combining the best of SDL's technology into a common,
powerful, and open platform that the industry can plug into. We consider this to
be a major advance, not only for SDL but also the industry.
We will continue to expand into new geographies, providing flexibility, scale
and cost efficiencies for the Group, with our focus moving to Asia for both
outsourcing and sales opportunities, leveraging all our business divisions from
the existing infrastructures.
Outlook and current trading
With the continued deterioration of the worldwide economic climate, 2009 may
well be a challenging year. Our approach will, therefore, be appropriately
cautious. We are however fortunate that approximately 67% of our revenue is
derived from translation services and this recurring revenue stream has
historically proven to be robust and resistant to economic downturns. At present
we have the benefit of the weak pound, approximately 37% of our revenue is in US
dollars and 46% is in Euros, which provides additional protection. We also have
a net cash position of a little over GBP31 million in cash, which gives us the
flexibility and security desirable in the current environment.
We are currently maintaining a solid pipeline and conversion rate across our
technology business units, although we are still seeing some delays in
converting deals. We are also continuing to see good momentum in the technology
markets we operate in. As we progress through 2009 we expect to see more
businesses outsource their translation management, and, due to the group's
leading position in both technology infrastructure and services, this should
lead to more business moving to SDL solutions.
We believe that the long term outlook for the SDL Group will continue to show
strong growth as businesses are attracted to the value and efficiencies a Global
Information Management Platform provides to global companies. 40 out of the top
50 global brands use SDL, and every year we see increasing numbers of
multi-national corporations adopt global information management technology to
manage their worldwide business more effectively.
Mark Lancaster
Chairman and Chief Executive
SDL plc
UNAUDITED Consolidated INCOME STATEMENT
for the year ended 31 December 2008
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| |Notes | 2008 | 2007 |
+--------------------------------------------------+-------+-----------+----------+
| | | GBP'000 | GBP'000 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Sale of goods | | 24,102 | 17,930 |
+--------------------------------------------------+-------+-----------+----------+
| Rendering of services | | 134,673 | 99,479 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| REVENUE | 3 | 158,775 | 117,409 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Cost of sales | | (71,884) | (54,521) |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| GROSS PROFIT | | 86,891 | 62,888 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Administrative expenses - excluding amortisation | 4 | (61,298) | (45,695) |
| of intangibles | | | |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Operating profit before amortisation | | 25,593 | 17,193 |
| of intangible assets | | | |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Administrative expenses - Amortisation of | 4 | (5,743) | (4,294) |
| intangible assets | | | |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Operating profit | 4 | 19,850 | 12,899 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Finance revenue | | 471 | 489 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Finance costs | | (462) | (628) |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Share of loss of associate | | (9) | (35) |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| PROFIT BEFORE TAX | | 19,850 | 12,725 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Tax expense | 5 | (5,310) | (3,555) |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| PROFIT for the YEAR | | 14,540 | 9,170 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Profit for the year attributable to equity | | 14,485 | 9,170 |
| holders of the parent | | | |
+--------------------------------------------------+-------+-----------+----------+
| Minority interest | | 55 | - |
+--------------------------------------------------+-------+-----------+----------+
| | | 14,540 | 9,170 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Earnings per ordinary share - basic (pence) | 6 | 19.21 | 13.07 |
+--------------------------------------------------+-------+-----------+----------+
| Earnings per ordinary share - diluted (pence) | 6 | 18.75 | 12.83 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Adjusted earnings per ordinary share - basic | 6 | 24.99 | 17.74 |
| (pence) | | | |
+--------------------------------------------------+-------+-----------+----------+
| Adjusted earnings per ordinary share - diluted | 6 | 24.38 | 17.42 |
| (pence) | | | |
+--------------------------------------------------+-------+-----------+----------+
SDL plc
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 31 December 2008
+--------------------------------------------------+-------+-----------+----------+
| |Notes | 2008 | 2007 |
+--------------------------------------------------+-------+-----------+----------+
| | | GBP'000 | GBP'000 |
+--------------------------------------------------+-------+-----------+----------+
| ASSETS | | | |
+--------------------------------------------------+-------+-----------+----------+
| NON CURRENT ASSETS | | | |
+--------------------------------------------------+-------+-----------+----------+
| Property, plant and equipment | | 4,524 | 3,240 |
+--------------------------------------------------+-------+-----------+----------+
| Intangible assets | 7 | 138,225 | 102,300 |
+--------------------------------------------------+-------+-----------+----------+
| Investment in an associate | | - | 256 |
+--------------------------------------------------+-------+-----------+----------+
| Loan to associate | | - | 286 |
+--------------------------------------------------+-------+-----------+----------+
| Deferred tax asset | | 6,455 | 4,663 |
+--------------------------------------------------+-------+-----------+----------+
| Rent deposits | | 641 | 333 |
+--------------------------------------------------+-------+-----------+----------+
| | | 149,845 | 111,078 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| CURRENT ASSETS | | | |
+--------------------------------------------------+-------+-----------+----------+
| Trade and other receivables | | 45,098 | 33,687 |
+--------------------------------------------------+-------+-----------+----------+
| Cash and cash equivalents | | 31,227 | 21,511 |
+--------------------------------------------------+-------+-----------+----------+
| | | 76,325 | 55,198 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| TOTAL ASSETS | | 226,170 | 166,276 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| CURRENT LIABILITIES | | | |
+--------------------------------------------------+-------+-----------+----------+
| Trade and other payables | | (43,527) | (32,048) |
+--------------------------------------------------+-------+-----------+----------+
| Interest bearing loans and borrowings | 8 | - | (2,000) |
+--------------------------------------------------+-------+-----------+----------+
| Financial liabilities | | (2,016) | (793) |
+--------------------------------------------------+-------+-----------+----------+
| Current tax liabilities | | (8,252) | (5,948) |
+--------------------------------------------------+-------+-----------+----------+
| Provisions | | (38) | (58) |
+--------------------------------------------------+-------+-----------+----------+
| | | (53,833) | (40,847) |
+--------------------------------------------------+-------+-----------+----------+
| NON CURRENT LIABILITIES | | | |
+--------------------------------------------------+-------+-----------+----------+
| Interest bearing loans and borrowings | 8 | - | (4,055) |
+--------------------------------------------------+-------+-----------+----------+
| Other payables | | (124) | (215) |
+--------------------------------------------------+-------+-----------+----------+
| Deferred tax liability | | (8,100) | (7,541) |
+--------------------------------------------------+-------+-----------+----------+
| Provisions | | (1,084) | (602) |
+--------------------------------------------------+-------+-----------+----------+
| | | (9,308) | (12,413) |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| TOTAL LIABILITIES | | (63,141) | (53,260) |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| NET ASSETS | | 163,029 | 113,016 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| EQUITY | | | |
+--------------------------------------------------+-------+-----------+----------+
| Share capital | | 757 | 750 |
+--------------------------------------------------+-------+-----------+----------+
| Share premium account | | 92,483 | 91,866 |
+--------------------------------------------------+-------+-----------+----------+
| Shares to be issued | | 406 | 541 |
+--------------------------------------------------+-------+-----------+----------+
| Retained earnings | | 30,250 | 14,921 |
+--------------------------------------------------+-------+-----------+----------+
| Foreign exchange differences | | 39,154 | 4,938 |
+--------------------------------------------------+-------+-----------+----------+
| | | 163,050 | 113,016 |
+--------------------------------------------------+-------+-----------+----------+
| Minority interest | | (21) | - |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| TOTAL EQUITY | | 163,029 | 113,016 |
+--------------------------------------------------+-------+-----------+----------+
SDL plc
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2008
+-------------------------+---------+----------+---------+----------+-------------+---------+
| | Share | Share | Shares | Retained | Foreign | Total |
| | Capital | Premium | to be | Earnings | Exchange | GBP'000 |
| | GBP'000 | Account | Issued | GBP'000 | Differences | |
| | | GBP'000 | GBP'000 | | GBP'000 | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| At 1 January 2007 | 625 | 51,096 | 66 | 4,334 | (1,615) | 54,506 |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Currency translation | - | - | - | - | 5,573 | 5,573 |
| differences on foreign | | | | | | |
| currency net | | | | | | |
| investments | | | | | | |
| and intangibles | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Currency translation | - | - | - | - | 980 | 980 |
| differences on foreign | | | | | | |
| currency equity loans | | | | | | |
| to foreign subsidiaries | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Deferred income | - | - | - | (359) | - | (359) |
| taxation | | | | | | |
| on share based payments | | | | | | |
| (Note 5) | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Tax credit for share | - | - | - | 945 | - | 945 |
| options (Note 5) | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Total income and | - | - | - | 586 | 6,553 | 7,139 |
| expense | | | | | | |
| for the year recognised | | | | | | |
| directly in equity | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Net profit for the year | - | - | - | 9,170 | - | 9,170 |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Total income and | - | - | - | 9,756 | 6,553 | 16,309 |
| expense for the year | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Arising on share | 11 | 655 | - | - | - | 666 |
| options | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Arising on acquisition | 1 | 65 | (66) | - | - | - |
| of Lingua Franca | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Arising on acquisition | 113 | 39,915 | - | - | - | 40,028 |
| of Tridion | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Arising on acquisition | - | 135 | 541 | - | - | 676 |
| of Passolo | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| Share based payments | - | - | - | 831 | - | 831 |
| (Note 9) | | | | | | |
+-------------------------+---------+----------+---------+----------+-------------+---------+
| At 31 December 2007 | 750 | 91,866 | 541 | 14,921 | 4,938 | 113,016 |
+-------------------------+---------+----------+---------+----------+-------------+---------+
SDL plc
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2008
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| | Share | Share | Shares | Retained | Foreign | Minority | Total |
| | Capital | Premium | to be | Earnings | Exchange | Interest | GBP'000 |
| | GBP'000 | Account | Issued | GBP'000 | Differences | GBP'000 | |
| | | GBP'000 | GBP'000 | | GBP'000 | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| At 1 January 2008 | 750 | 91,866 | 541 | 14,921 | 4,938 | - | 113,016 |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Currency | - | - | - | - | 36,527 | - | 36,527 |
| translation differences | | | | | | | |
| on foreign currency net | | | | | | | |
| investments and | | | | | | | |
| intangibles | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Currency | - | - | - | - | (2,311) | - | (2,311) |
| translation differences | | | | | | | |
| on foreign currency | | | | | | | |
| equity loans to foreign | | | | | | | |
| subsidiaries | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Deferred income | - | - | - | (1,041) | - | - | (1,041) |
| taxation on share | | | | | | | |
| based | | | | | | | |
| payments (Note 5) | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Tax credit for | - | - | - | 494 | - | - | 494 |
| share options (Note | | | | | | | |
| 5) | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Total income and | - | - | - | (547) | 34,216 | - | 33,669 |
| expense for the | | | | | | | |
| year | | | | | | | |
| recognised directly | | | | | | | |
| in equity | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Net profit for the | - | - | - | 14,485 | - | 55 | 14,540 |
| year | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Total income and | - | - | - | 13,938 | 34,216 | 55 | 48,209 |
| expense for the | | | | | | | |
| year | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Arising on share | 7 | 482 | - | - | - | - | 489 |
| options | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Arising on | - | - | - | - | - | (76) | (76) |
| acquisition of | | | | | | | |
| Trisoft | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Arising on | - | 135 | (135) | - | - | - | - |
| acquisition of | | | | | | | |
| Passolo | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| Share based | - | - | - | 1,391 | - | - | 1,391 |
| payments (Note 9) | | | | | | | |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
| At 31 December 2008 | 757 | 92,483 | 406 | 30,250 | 39,154 | (21) | 163,029 |
+-------------------------+---------+---------+---------+----------+-------------+----------+---------+
SDL plc
UNAUDITED consolidated CASH FLOW STATEMENT
for the year ended 31 December 2008
+--------------------------------------------------+-------+-----------+----------+
| |Notes | 2008 | 2007 |
+--------------------------------------------------+-------+-----------+----------+
| | | GBP'000 | GBP'000 |
+--------------------------------------------------+-------+-----------+----------+
| PROFIT BEFORE TAX | | 19,850 | 12,725 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Depreciation of property, plant and equipment | | 1,630 | 1,506 |
+--------------------------------------------------+-------+-----------+----------+
| Amortisation of intangible assets | 7 | 5,743 | 4,294 |
+--------------------------------------------------+-------+-----------+----------+
| Finance revenue | | (471) | (489) |
+--------------------------------------------------+-------+-----------+----------+
| Finance costs | | 462 | 628 |
+--------------------------------------------------+-------+-----------+----------+
| Share of loss of associate | | 9 | 35 |
+--------------------------------------------------+-------+-----------+----------+
| Share based payments | | 1,391 | 831 |
+--------------------------------------------------+-------+-----------+----------+
| Losses on disposal of property, plant & | | - | 17 |
| equipment | | | |
+--------------------------------------------------+-------+-----------+----------+
| Increase in trade and other receivables | | (8,565) | (7,967) |
+--------------------------------------------------+-------+-----------+----------+
| Increase in trade and other payables | | 9,723 | 4,114 |
+--------------------------------------------------+-------+-----------+----------+
| Exchange differences | | 1,271 | 2,684 |
+--------------------------------------------------+-------+-----------+----------+
| CASH GENERATED FROM OPERATIONS | | 31,043 | 18,378 |
+--------------------------------------------------+-------+-----------+----------+
| Income tax paid | | (4,647) | (2,373) |
+--------------------------------------------------+-------+-----------+----------+
| NET CASH FLOWS FROM OPERATING ACTIVITIES | | 26,396 | 16,005 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| CASH FLOWS FROM INVESTING ACTIVITIES | | | |
+--------------------------------------------------+-------+-----------+----------+
| Payments to acquire property, plant & equipment | | (2,323) | (1,425) |
+--------------------------------------------------+-------+-----------+----------+
| Receipts from sale of property, plant & | | 78 | 46 |
| equipment | | | |
+--------------------------------------------------+-------+-----------+----------+
| Payments to acquire subsidiaries | | (13,662) | (47,747) |
+--------------------------------------------------+-------+-----------+----------+
| Net cash acquired with subsidiaries | | 343 | 11,813 |
+--------------------------------------------------+-------+-----------+----------+
| Payment to acquire investment in associate | | - | (291) |
+--------------------------------------------------+-------+-----------+----------+
| Cash advances and loans made to associate | | - | (286) |
+--------------------------------------------------+-------+-----------+----------+
| Interest received | | 471 | 489 |
+--------------------------------------------------+-------+-----------+----------+
| NET CASH FLOWS FROM INVESTING ACTIVITIES | | (15,093) | (37,401) |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| CASH FLOWS FROM FINANCING ACTIVITIES | | | |
+--------------------------------------------------+-------+-----------+----------+
| Net proceeds from issue of ordinary share | | 489 | 40,829 |
| capital | | | |
+--------------------------------------------------+-------+-----------+----------+
| Repayment of interest bearing loans and | | (17,555) | (6,492) |
| borrowings | | | |
+--------------------------------------------------+-------+-----------+----------+
| Proceeds from new loans | | 9,500 | 1,023 |
+--------------------------------------------------+-------+-----------+----------+
| Interest paid | | (462) | (628) |
+--------------------------------------------------+-------+-----------+----------+
| NET CASH FLOWS FROM FINANCING ACTIVITIES | | (8,028) | 34,732 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| INCREASE IN CASH AND CASH EQUIVALENTS | | 3,275 | 13,336 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| MOVEMENT IN CASH AND CASH EQUIVALENTS | | | |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Cash and cash equivalents at the start of year | | 21,511 | 7,978 |
+--------------------------------------------------+-------+-----------+----------+
| Increase in cash and cash equivalents | 10 | 3,275 | 13,336 |
+--------------------------------------------------+-------+-----------+----------+
| Effect of exchange rates on cash and cash | 10 | 6,441 | 197 |
| equivalents | | | |
+--------------------------------------------------+-------+-----------+----------+
| NET CASH AND CASH EQUIVALENTS AT END OF YEAR | 10 | 31,227 | 21,511 |
+--------------------------------------------------+-------+-----------+----------+
SDL plc
notes to the unaudited financial statements
1. BASIS OF ACCOUNTING
These preliminary financial statements do not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985 and are
unaudited. The accounting policies adopted in the preparation of the preliminary
financial statements are consistent with those followed in preparation of the
Group's annual financial statements for the year ended 31 December 2007.
The financial statements for the year ended 31 December 2008 have yet to be
signed by the auditors.
The consolidated financial statements of SDL plc and its subsidiaries have been
prepared in accordance with International Financial Reporting Standards as
adopted by the EU as relevant to the financial statements of SDL plc.
2. BUSINESS COMBINATIONS
Acquisition of Idiom Technologies Inc (renamed SDL Enterprise 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 (GBP13.7 million) and
was funded through a loan from the Bank of $19.0 million (GBP9.5 million), and
from the Group's existing cash resources.
The fair value of the identifiable assets and liabilities of Idiom Technologies
Inc as at the date of acquisition were:
+-----------------------------------------+------------+----------------+-----------+
| | Book value | Fair |
| | | value |
| | | to Group |
+-----------------------------------------+-----------------------------+-----------+
| | GBP'000 | GBP'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 |
+-----------------------------------------+-----------------------------+-----------+
| Goodwill arising on acquisition | | 10,033 |
+-----------------------------------------+-----------------------------+-----------+
| | | 13,732 |
+-----------------------------------------+-----------------------------+-----------+
| | | |
+-----------------------------------------+------------+----------------------------+
| Discharged by: | | GBP'000 |
+-----------------------------------------+------------+----------------------------+
| | | |
+-----------------------------------------+------------+----------------------------+
| Costs associated with the acquisition | | 146 |
+-----------------------------------------+------------+----------------------------+
| Cash paid | | 13,586 |
+-----------------------------------------+------------+----------------------------+
| Total | | 13,732 |
+-----------------------------------------+------------+----------------------------+
| | | |
+-----------------------------------------+------------+----------------------------+
| Cash outflow on the acquisition: | | |
+-----------------------------------------+------------+----------------------------+
| Net cash and cash equivalents acquired | | 195 |
| with the subsidiary | | |
+-----------------------------------------+------------+----------------------------+
| Cash paid | | (13,732) |
+-----------------------------------------+------------+----------------------------+
| Net cash outflow | | (13,537) |
+-----------------------------------------+------------+----------------------------+
| | | |
+-----------------------------------------+------------+----------------+-----------+
From the date of acquisition Idiom Technologies Inc has contributed GBP4.1
million of revenue and a loss of GBP0.4 million to the net profit of the Group.
If the combination had taken place at the beginning of the year, the profit for
the Group would have been GBP14.2 million and revenue from continuing operations
would have been GBP159.2 million. Included in the GBP10.0 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 did not exercise its call option until 29 September 2008, the
Directors considered that the Group had control over more than 50% of the voting
rights from 7 June 2008 by virtue of the existence of the exercisable call
option and therefore the results of Trisoft NV were 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 (GBP0.6
million) and was funded from the Group's existing cash resources. The Group has
also loaned Trisoft NV EUR400,000.
The fair value of the identifiable assets and liabilities upon consolidation of
Trisoft NV were:
+-----------------------------------------+------------+----------------+-----------+
| | Book value | Fair |
| | | value |
| | | to Group |
+-----------------------------------------+-----------------------------+-----------+
| | GBP'000 | GBP'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 |
+-----------------------------------------+-----------------------------+-----------+
| Goodwill arising on acquisition | | 320 |
+-----------------------------------------+-----------------------------+-----------+
| | | 577 |
+-----------------------------------------+-----------------------------+-----------+
| | | |
+-----------------------------------------+------------+----------------------------+
| Discharged by*: | | GBP'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 equivalents acquired | | 148 |
| with the subsidiary | | |
+-----------------------------------------+------------+----------------------------+
| Total cash paid | | (577) |
+-----------------------------------------+------------+----------------------------+
| Net cash outflow | | (429) |
+-----------------------------------------+------------+----------------------------+
| | | |
+-----------------------------------------+------------+----------------------------+
| * in 2007 | | |
+-----------------------------------------+------------+----------------------------+
| | | |
+-----------------------------------------+------------+----------------+-----------+
On 29 September 2008, the Group acquired an additional 46% of the voting rights
of Trisoft NV taking its ownership to 95%. Cash consideration of GBP1,256,000
was paid. The book value of the net liabilities of Trisoft NV at this date was
GBP218,000. The difference between the consideration and the book value of the
interest acquired has been recognised as goodwill.
From the date of consolidation Trisoft NV has contributed GBP0.8 million of
revenue and a profit of less than GBP0.1 million to the net profit of the Group.
If the consolidation had taken place at the beginning of the year, the profit
for the Group would have remained the same based on the 49% interest but revenue
from continuing operations would have been increased by GBP0.6 million to
GBP159.4 million. Included in the GBP0.3 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 GBP25,020,000 in the 31 December 2007 audited
accounts and the intangible assets fair valued at GBP17,727,000. Following a
detailed review, the goodwill has been finalised at a value of GBP26,216,000,
being an increase of GBP1,196,000, (being the net of GBP1,661,000 reclassified
from intangible assets and an adjustment to the fair value of the deferred tax
liability of GBP465,000), and the intangibles have been finalised at a fair
value of GBP16,066,000, a decrease of GBP1,661,000.
3. SEGMENT INFORMATION
The Group operates in the translation and localisation 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
the customer's software products, documents, manuals and websites. As well as
translation of words, this incorporates desktop publishing, software engineering
and project management.
The Technology segment is the sale of desktop and enterprise technology
developed and owned by the Group to freelance translators, translation service
providers and to corporate translation end users who may perform the service
themselves. This includes both the sale of software licences and associated
support, maintenance and training services and more tailor made enterprise
solutions.
The Group's geographical segments are based upon the geographical destination of
sales.
+--------------------------------------+-------------+-------------+----------+
| Year ended 31 December 2008 | | | |
+--------------------------------------+-------------+-------------+----------+
| | Translation | Technology | Total |
| | Services | | |
+--------------------------------------+-------------+-------------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+-------------+-------------+----------+
| Revenue | | | |
+--------------------------------------+-------------+-------------+----------+
| Sales to external customers | 106,100 | 52,675 | 158,775 |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Segment results | 17,887 | 1,954 | 19,841 |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Net finance costs | | | 9 |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Profit before tax | | | 19,850 |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Tax expense | | | (5,310) |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Minority interest | | | (55) |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Net profit for the year | | | 14,485 |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Assets and liabilities | | | |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Segment assets | 54,103 | 133,823 | 187,926 |
+--------------------------------------+-------------+-------------+----------+
| Unallocated assets | | | 38,244 |
+--------------------------------------+-------------+-------------+----------+
| Total assets | | | 226,170 |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Segment liabilities | 24,239 | 20,485 | 44,724 |
+--------------------------------------+-------------+-------------+----------+
| Unallocated liabilities | | | 18,417 |
+--------------------------------------+-------------+-------------+----------+
| Total liabilities | | | 63,141 |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Other segment information | | | |
+--------------------------------------+-------------+-------------+----------+
| | | | |
+--------------------------------------+-------------+-------------+----------+
| Property, plant and equipment | 1,066 | 1,257 | 2,323 |
+--------------------------------------+-------------+-------------+----------+
| Property, plant and equipment on | - | 192 | 192 |
| acquisition | | | |
+--------------------------------------+-------------+-------------+----------+
| Intangible assets acquired | - | 15,827 | 15,827 |
+--------------------------------------+-------------+-------------+----------+
| Share based payments | 1,163 | 228 | 1,391 |
+--------------------------------------+-------------+-------------+----------+
| Depreciation | 1,048 | 582 | 1,630 |
+--------------------------------------+-------------+-------------+----------+
| Amortisation | 771 | 4,972 | 5,743 |
+--------------------------------------+-------------+-------------+----------+
+--------------------------------------+-------------+-------------+-----------+
| Year ended 31 December 2007 | | | |
+--------------------------------------+-------------+-------------+-----------+
| | Translation | Technology | Total |
| | Services | | |
+--------------------------------------+-------------+-------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+-------------+-------------+-----------+
| Revenue | | | |
+--------------------------------------+-------------+-------------+-----------+
| Sales to external customers | 84,178 | 33,231 | 117,409 |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Segment results | 12,670 | 194 | 12,864 |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net finance costs | | | (139) |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Profit before tax | | | 12,725 |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Tax expense | | | (3,555) |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net profit for the year | | | 9,170 |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Assets and liabilities | | | |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Segment assets | 47,692 | 91,710 | 139,402 |
+--------------------------------------+-------------+-------------+-----------+
| Unallocated assets | | | 26,874 |
+--------------------------------------+-------------+-------------+-----------+
| Total assets | | | 166,276 |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Segment liabilities | 15,726 | 15,997 | 31,723 |
+--------------------------------------+-------------+-------------+-----------+
| Unallocated liabilities | | | 21,537 |
+--------------------------------------+-------------+-------------+-----------+
| Total liabilities | | | 53,260 |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Other segment information | | | |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Property, plant and equipment | 1,059 | 366 | 1,425 |
+--------------------------------------+-------------+-------------+-----------+
| Property, plant and equipment on | - | 161 | 161 |
| acquisition | | | |
+--------------------------------------+-------------+-------------+-----------+
| Intangible assets acquired | - | 44,278 | 44,278 |
+--------------------------------------+-------------+-------------+-----------+
| Share based payments | 535 | 296 | 831 |
+--------------------------------------+-------------+-------------+-----------+
| Depreciation | 1,105 | 401 | 1,506 |
+--------------------------------------+-------------+-------------+-----------+
| Amortisation | 771 | 3,523 | 4,294 |
+--------------------------------------+-------------+-------------+-----------+
Unallocated assets and liabilities include cash, loans and taxation. The
investment in and loss of the associate is included in the Technology segment
above.
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Year ended 31 December 2008 | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | United | Rest | USA | Rest of | Rest | Total |
| | Kingdom | of | | North | of the | |
| | | Europe | | America | World | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Revenue | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Revenue from continuing | 13,696 | 64,918 | 57,505 | 10,671 | 11,985 | 158,775 |
| operations | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Other segment information | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Segment assets | 25,207 | 95,663 | 57,907 | 5,112 | 4,037 | 187,926 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Unallocated assets | | | | | | 38,244 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Total assets | | | | | | 226,170 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Capital expenditure | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Property, plant and | 408 | 1,373 | 186 | 36 | 320 | 2,323 |
| equipment | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Property, plant and | - | 28 | 164 | - | - | 192 |
| equipment | | | | | | |
| on acquisitions | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Intangible assets acquired | - | 1,889 | 13,938 | - | - | 15,827 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Year ended 31 December 2007 | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | United | Rest | USA | Rest of | Rest | Total |
| | Kingdom | of | | North | of the | |
| | | Europe | | America | World | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Revenue | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Revenue from continuing | 11,148 | 46,368 | 41,229 | 10,437 | 8,227 | 117,409 |
| operations | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Other segment information | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Segment assets | 25,359 | 74,839 | 33,823 | 3,026 | 2,355 | 139,402 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Unallocated assets | | | | | | 26,874 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Total assets | | | | | | 166,276 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Capital expenditure | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Property, plant and | 524 | 407 | 214 | 80 | 200 | 1,425 |
| equipment | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Property, plant and | - | 161 | - | - | - | 161 |
| equipment | | | | | | |
| on acquisitions | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Intangible assets acquired | 9,233 | 26,491 | 8,554 | - | - | 44,278 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
Unallocated assets and liabilities include cash, loans and taxation. The
investment in and loss of the associate are both included in the Rest of Europe
segment above.
4. OTHER REVENUE AND EXPENSES
Group operating profit is stated after charging/(crediting):
+--------------------------------------------------+------------+-----------+
| | 2008 | 2007 |
+--------------------------------------------------+------------+-----------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------+------------+-----------+
| | | |
+--------------------------------------------------+------------+-----------+
| | | |
+--------------------------------------------------+------------+-----------+
| Included in administrative expenses: | | |
+--------------------------------------------------+------------+-----------+
| | | |
+--------------------------------------------------+------------+-----------+
| | | |
+--------------------------------------------------+------------+-----------+
| Research and development expenditure | 8,044 | 5,374 |
+--------------------------------------------------+------------+-----------+
| Bad debt | 460 | 114 |
+--------------------------------------------------+------------+-----------+
| Depreciation of property, plant and equipment | 1,630 | 1,506 |
+--------------------------------------------------+------------+-----------+
| Amortisation of intangible fixed assets | 5,743 | 4,294 |
+--------------------------------------------------+------------+-----------+
| Operating lease rentals for plant and machinery | 763 | 69 |
+--------------------------------------------------+------------+-----------+
| Operating lease rentals for land and buildings | 4,953 | 3,737 |
+--------------------------------------------------+------------+-----------+
| Operating lease rentals received for land and | (150) | (150) |
| buildings | | |
+--------------------------------------------------+------------+-----------+
| Net foreign exchange (gains)/losses | (764) | 644 |
+--------------------------------------------------+------------+-----------+
| Loss on derivatives | 3,764 | 1,267 |
+--------------------------------------------------+------------+-----------+
The net foreign exchange losses above arose due to movements in foreign
currencies between the time of the original transaction and the realisation of
the cash collection or spend and the retranslation of US Dollar denominated
loans.
Auditor's remuneration
+--------------------------------------------------+------------+-----------+
| Audit of the Group financial statements | 226 | 235 |
+--------------------------------------------------+------------+-----------+
| Other fees to auditors: | | |
+--------------------------------------------------+------------+-----------+
| Local statutory audits for subsidiaries | 69 | 48 |
+--------------------------------------------------+------------+-----------+
| Other taxation services* | 101 | 170 |
+--------------------------------------------------+------------+-----------+
| Other services* | 13 | 186 |
+--------------------------------------------------+------------+-----------+
* - Included within these two captions are fees amounting to GBPnil in relation
to the acquisitions in the year (2007: GBP253,000) which have been capitalised
as opposed to charged through the profit and loss account.
5. INCOME TAX
(a) Income tax on profit:
+-------------------------------------------------+------------+-----------+
| | 2008 | 2007 |
| | GBP'000 | GBP'000 |
+-------------------------------------------------+------------+-----------+
| Current taxation | | |
+-------------------------------------------------+------------+-----------+
| UK Income tax charge/(credit) | | |
+-------------------------------------------------+------------+-----------+
| Current tax on income for the period | 1,264 | - |
+-------------------------------------------------+------------+-----------+
| Adjustments in respect of prior periods | (122) | (131) |
+-------------------------------------------------+------------+-----------+
| Tax credit for share options taken to equity | 494 | 945 |
+-------------------------------------------------+------------+-----------+
| | 1,636 | 814 |
+-------------------------------------------------+------------+-----------+
| Foreign tax | | |
+-------------------------------------------------+------------+-----------+
| Current tax on income for the period | 4,247 | 3,311 |
+-------------------------------------------------+------------+-----------+
| Adjustments in respect of prior periods | 58 | (36) |
+-------------------------------------------------+------------+-----------+
| | 4,305 | 3,275 |
+-------------------------------------------------+------------+-----------+
| Total current taxation | 5,941 | 4,089 |
+-------------------------------------------------+------------+-----------+
| | | |
+-------------------------------------------------+------------+-----------+
| Deferred income taxation | | |
+-------------------------------------------------+------------+-----------+
| Origination and reversal of temporary | 487 | (104) |
| differences | | |
+-------------------------------------------------+------------+-----------+
| Adjustments in respect of prior periods | (77) | (71) |
+-------------------------------------------------+------------+-----------+
| Deferred tax credit for share options taken to | (1,041) | (359) |
| equity | | |
+-------------------------------------------------+------------+-----------+
| Total deferred income tax | (631) | (534) |
+-------------------------------------------------+------------+-----------+
| | | |
+-------------------------------------------------+------------+-----------+
| Tax expense (see (b) below) | 5,310 | 3,555 |
+-------------------------------------------------+------------+-----------+
An aggregate tax debit in respect of share based compensation for current and
deferred taxation of GBP547,000 (2007: credit of GBP586,000) has been recognised
in equity in the year.
(b) Factors affecting tax charge:
The tax assessed on the profit on ordinary activities for the year is lower than
the standard rate of income tax in the UK of 28.5% (2007: 30%). The differences
are reconciled below:
+-------------------------------------------------+------------+-----------+
| | 2008 | 2007 |
| | GBP'000 | GBP'000 |
+-------------------------------------------------+------------+-----------+
| | | |
+-------------------------------------------------+------------+-----------+
| Profit on ordinary activities before tax | 19,850 | 12,725 |
+-------------------------------------------------+------------+-----------+
| | | |
+-------------------------------------------------+------------+-----------+
| Profit on ordinary activities at standard rate | 5,657 | 3,818 |
| of tax in | | |
| the UK 28.5% (2007: 30%) | | |
+-------------------------------------------------+------------+-----------+
| | | |
+-------------------------------------------------+------------+-----------+
| Expenses not deductible for tax purposes | 22 | 201 |
+-------------------------------------------------+------------+-----------+
| Non deductible amortisation of intangibles | 220 | 230 |
+-------------------------------------------------+------------+-----------+
| Non taxable income | (217) | (101) |
+-------------------------------------------------+------------+-----------+
| Adjustments in respect of previous years | (141) | (238) |
+-------------------------------------------------+------------+-----------+
| Utilisation of tax losses brought forward | (308) | (112) |
| previously not recognised | | |
+-------------------------------------------------+------------+-----------+
| Current tax losses not available for offset | 631 | 241 |
+-------------------------------------------------+------------+-----------+
| Effect of overseas tax rates | (894) | (572) |
+-------------------------------------------------+------------+-----------+
| Other | 340 | 88 |
+-------------------------------------------------+------------+-----------+
| | | |
+-------------------------------------------------+------------+-----------+
| Tax expense (see (a) above) | 5,310 | 3,555 |
+-------------------------------------------------+------------+-----------+
6. EARNINGS PER SHARE
The calculation of basic earnings per ordinary share is based on a profit after
tax of GBP14,485,000 (2007: GBP9,170,000) and 75,386,189 (2007: 70,157,960)
ordinary shares, being the weighted average number of ordinary shares in issue
during the period.
The diluted earnings per ordinary share is calculated by including in the
weighted average number of shares the dilutive effect of potential ordinary
shares related to committed share options as described in note 9. For 2008 the
diluted ordinary shares were based on 77,257,969 ordinary shares that included
1,871,780 potential weighted number of options.
The following reflects the income and share data used in the basic, diluted and
adjusted earnings per share computations:
+--------------------------------------------------+-----------+-----------+
| | 2008 | 2007 |
+--------------------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------+-----------+-----------+
| Profit for the year | 14,485 | 9,170 |
+--------------------------------------------------+-----------+-----------+
| Amortisation of intangible fixed assets | 5,743 | 4,294 |
+--------------------------------------------------+-----------+-----------+
| Less: tax benefit associated with the | (1,392) | (1,015) |
| amortisation of | | |
| intangible assets | | |
+--------------------------------------------------+-----------+-----------+
| Adjusted profit for the year | 18,836 | 12,449 |
+--------------------------------------------------+-----------+-----------+
| | | |
+--------------------------------------------------+-----------+-----------+
+--------------------------------------------------+------------+------------+
| | 2008 | 2007 |
+--------------------------------------------------+------------+------------+
| | No. | No. |
+--------------------------------------------------+------------+------------+
| Weighted average number of ordinary shares for | 75,386,189 | 70,157,960 |
| basic | | |
| earnings per share | | |
+--------------------------------------------------+------------+------------+
| Effect of dilution resulting from share options | 1,871,780 | 1,316,349 |
+--------------------------------------------------+------------+------------+
| Weighted average number of ordinary shares | 77,257,969 | 71,474,309 |
| adjusted | | |
| for the effect of dilution | | |
+--------------------------------------------------+------------+------------+
| | | |
+--------------------------------------------------+------------+------------+
| | 2008 | 2007 |
+--------------------------------------------------+------------+------------+
| Adjusted earnings per ordinary share - basic | 24.99 | 17.74 |
| (pence)* | | |
+--------------------------------------------------+------------+------------+
| Adjusted earnings per ordinary share - diluted | 24.38 | 17.42 |
| (pence)* | | |
+--------------------------------------------------+------------+------------+
| | | |
+--------------------------------------------------+------------+------------+
There have been no other transactions involving ordinary shares or potential
ordinary shares between the reporting date and the date of completion of the
financial statements.
*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.
7. INTANGIBLE ASSETS
+------------------------------------------+--------------+----------+----------+
| | Intellectual | Goodwill | Total |
| | Property | | |
+------------------------------------------+--------------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+--------------+----------+----------+
| Cost: | | | |
+------------------------------------------+--------------+----------+----------+
| At 1 January 2007 | 19,090 | 59,337 | 78,427 |
+------------------------------------------+--------------+----------+----------+
| Currency adjustment | 1,599 | 2,555 | 4,154 |
+------------------------------------------+--------------+----------+----------+
| Acquisition of subsidiaries | 18,353 | 25,925 | 44,278 |
+------------------------------------------+--------------+----------+----------+
| At 1 January 2008 | 39,042 | 87,817 | 126,859 |
+------------------------------------------+--------------+----------+----------+
| Acquisition of subsidiaries | 4,090 | 11,737 | 15,827 |
+------------------------------------------+--------------+----------+----------+
| Reclassification | (1,661) | 1,661 | - |
+------------------------------------------+--------------+----------+----------+
| Adjustment to deferred tax liability | - | (465) | (465) |
+------------------------------------------+--------------+----------+----------+
| Recovery of costs from Trados | - | (1,354) | (1,354) |
| acquisition | | | |
+------------------------------------------+--------------+----------+----------+
| Currency adjustment | 10,966 | 20,470 | 31,436 |
+------------------------------------------+--------------+----------+----------+
| At 31 December 2008 | 52,437 | 119,866 | 172,303 |
+------------------------------------------+--------------+----------+----------+
| | | | |
+------------------------------------------+--------------+----------+----------+
| Amortisation: | | | |
+------------------------------------------+--------------+----------+----------+
| At 1 January 2007 | (7,843) | (12,203) | (20,046) |
+------------------------------------------+--------------+----------+----------+
| Provided during the year | (4,294) | - | (4,294) |
+------------------------------------------+--------------+----------+----------+
| Currency adjustment | (219) | - | (219) |
+------------------------------------------+--------------+----------+----------+
| At 1 January 2008 | (12,356) | (12,203) | (24,559) |
+------------------------------------------+--------------+----------+----------+
| Provided during the year | (5,743) | - | (5,743) |
+------------------------------------------+--------------+----------+----------+
| Currency adjustment | (3,776) | - | (3,776) |
+------------------------------------------+--------------+----------+----------+
| At 31 December 2008 | (21,875) | (12,203) | (34,078) |
+------------------------------------------+--------------+----------+----------+
| | | | |
+------------------------------------------+--------------+----------+----------+
| Net book value: | | | |
+------------------------------------------+--------------+----------+----------+
| At 31 December 2008 | 30,562 | 107,663 | 138,225 |
+------------------------------------------+--------------+----------+----------+
| | | | |
+------------------------------------------+--------------+----------+----------+
| At 1 January 2008 | 26,686 | 75,614 | 102,300 |
+------------------------------------------+--------------+----------+----------+
| | | | |
+------------------------------------------+--------------+----------+----------+
During the year GBP1,354,000 cash was received reflecting a reduction in the
consideration paid for Trados.
Intellectual property is written off on a straight-line basis over its estimated
useful life of between 5 and 15 years. As from 1 January 2004, the date of
transition to IFRS, goodwill was no longer amortised but is now subject to
annual impairment testing. The group has not capitalised any development costs
in the year (2007: GBPnil).
8. INTEREST BEARING LOANS AND BORROWINGS
+------------------------------------------------------+-----------+----------+
| | 2008 | 2007 |
+------------------------------------------------------+-----------+----------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------+-----------+----------+
| Current | | |
+------------------------------------------------------+-----------+----------+
| Current instalments due on bank loans | - | 2,000 |
+------------------------------------------------------+-----------+----------+
| | | |
+------------------------------------------------------+-----------+----------+
| Non-current | | |
+------------------------------------------------------+-----------+----------+
| Non - current instalments due on bank loans | - | 4,055 |
+------------------------------------------------------+-----------+----------+
| | | |
+------------------------------------------------------+-----------+----------+
Bank loans comprise the following:
+----------------------------------------------------+-----------+----------+
| | 2008 | 2007 |
+----------------------------------------------------+-----------+----------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------+-----------+----------+
| US variable rate secured term loan | - | - |
+----------------------------------------------------+-----------+----------+
| Variable rate secured term loan | - | 3,900 |
+----------------------------------------------------+-----------+----------+
| US $ variable rate secured revolving credit | - | 2,155 |
| facility | | |
+----------------------------------------------------+-----------+----------+
| | - | 6,055 |
+----------------------------------------------------+-----------+----------+
| Less current instalments due on bank loans | - | (2,000) |
+----------------------------------------------------+-----------+----------+
| | - | 4,055 |
+----------------------------------------------------+-----------+----------+
9. SHARE-BASED PAYMENT PLANS
SDL Share Option Scheme
The table below sets out the number and weighted average exercise prices (WAEP)
of, and movements in, the SDL Share Options Scheme during the year:
+------------------------------------+-----------+---------+-------------+---------+
| | 2008 | 2008 | 2007 | 2007 |
+------------------------------------+-----------+---------+-------------+---------+
| | No. | WAEP | No. | WAEP |
+------------------------------------+-----------+---------+-------------+---------+
| Outstanding at the beginning of | 2,861,508 | GBP1.65 | 3,422,418 | GBP0.87 |
| the year | | | | |
+------------------------------------+-----------+---------+-------------+---------+
| Granted during the year | 856,300 | GBP2.79 | 680,000 | GBP3.75 |
+------------------------------------+-----------+---------+-------------+---------+
| Forfeited during the year | (369,233) | GBP3.38 | (101,750) | GBP1.10 |
+------------------------------------+-----------+---------+-------------+---------+
| Exercised during the year | (730,686) | GBP0.67 | (1,139,160) | GBP0.58 |
+------------------------------------+-----------+---------+-------------+---------+
| Expired during the year | - | - | - | - |
+------------------------------------+-----------+---------+-------------+---------+
| Outstanding at the end of the year | 2,617,889 | GBP2.03 | 2,861,508 | GBP1.65 |
+------------------------------------+-----------+---------+-------------+---------+
| Exercisable at 31 December | 1,348,904 | GBP1.35 | 1,559,761 | GBP0.77 |
+------------------------------------+-----------+---------+-------------+---------+
| | | | | |
+------------------------------------+-----------+---------+-------------+---------+
The weighted average share price at the date of exercise for the options
exercised is GBP3.31 (2007: GBP3.73).
For the share options outstanding as at 31 December 2008, the weighted average
remaining contractual life is 6.74 years (2007: 6.44 years).
The fair value of equity settled share options granted under the SDL Share
Option Scheme is estimated as at the date of grant using the Black Scholes
model. The following table lists the inputs to the model:
+--------------------------------------------------------+---------+--------+
| | 2008 | 2007 |
+--------------------------------------------------------+---------+--------+
| Weighted average share price (pence) | 279 | 218 |
+--------------------------------------------------------+---------+--------+
| Expected volatility | 35% | 35% |
+--------------------------------------------------------+---------+--------+
| Expected option life | 4 years | 5 |
| | | years |
+--------------------------------------------------------+---------+--------+
| Expected dividends | 0% | 1% |
+--------------------------------------------------------+---------+--------+
| Risk-free interest rate | 5% | 5% |
+--------------------------------------------------------+---------+--------+
notes to the unaudited financial statements (Cont.)
The range of exercise prices for options outstanding at the end of the year was
GBP0.01-GBP3.745 (2007: GBP0.01-GBP3.745).
+----------------+-------------------+----------------+---------------+---------------+
| | Date of Grant | Exercise | 2008 | 2007 |
| | | Period | Number | Number |
+----------------+-------------------+----------------+---------------+---------------+
| GBP0.01 - | 01/01/92-16/04/03 | 10 years after | 171,900 | 538,753 |
| GBP0.50 | | grant date | | |
| | | | | |
+----------------+-------------------+----------------+---------------+---------------+
| GBP0.51 - | 15/10/99-12/12/03 | 10 years after | 357,247 | 477,693 |
| GBP1.00 | | grant date | | |
| | | | | |
+----------------+-------------------+----------------+---------------+---------------+
| GBP1.01 - | 02/04/04-04/04/05 | 10 years after | 667,155 | 882,812 |
| GBP1.50 | | grant date | | |
| | | | | |
+----------------+-------------------+----------------+---------------+---------------+
| GBP1.51 - | 07/04/01 | 10 years after | 3,750 | 3,750 |
| GBP2.00 | | grant date | | |
| | | | | |
+----------------+-------------------+----------------+---------------+---------------+
| GBP2.01 - | 22/03/06-03/10/06 | 10 years after | 202,270 | 257,500 |
| GBP2.50 | | grant date | | |
| | | | | |
+----------------+-------------------+----------------+---------------+---------------+
| GBP2.51 - | 28/02/08 | 10 years after | 770,700 | - |
| GBP3.00 | | grant date | | |
| | | | | |
+----------------+-------------------+----------------+---------------+---------------+
| GBP3.01 - | 12/05/00- | 10 years after | 16,000 | 17,000 |
| GBP3.50 | 1/6/00 | grant date | | |
| | | | | |
+----------------+-------------------+----------------+---------------+---------------+
| GBP3.51 - | 16/10/00- | 10 years after | 428,867 | 684,000 |
| GBP4.00 | 23/5/07 | grant date | | |
| | | | | |
+----------------+-------------------+----------------+---------------+---------------+
| Total | | | 2,617,889 | 2,861,508 |
+----------------+-------------------+----------------+---------------+---------------+
SDL Long Term Incentive Plan
The fair value of equity-settled shares granted under the SDL Long Term
Incentive Plan is estimated as at the date of grant using a Monte-Carlo model,
taking into account the terms and conditions upon which the options were
granted. The following table lists the inputs to the model used for the years
ended 31 December 2008.
+--------------------------------------+-----------+---------+-----------+--------+
| | 2008 | 2007 |
+--------------------------------------+-----------+---------+
| Expected volatility | 35 - 45% | 35% |
+--------------------------------------+-----------+---------+
| Expected life | 3 years | 3 years |
+--------------------------------------+-----------+---------+
| Expected dividends | 0% | 0% |
+--------------------------------------+-----------+---------+
| Risk-free interest rate | 5% | 5% |
+--------------------------------------+-----------+---------+
| | | |
+--------------------------------------+-----------+---------+
| | 2008 | 2008 | 2007 | 2007 |
+--------------------------------------+-----------+---------+-----------+--------+
| | No. | WAEP | No. | WAEP |
+--------------------------------------+-----------+---------+-----------+--------+
| Outstanding at the beginning of the | 1,190,174 | - | 935,635 | - |
| year | | | | |
+--------------------------------------+-----------+---------+-----------+--------+
| Granted during the year | 817,803 | - | 321,074 | - |
+--------------------------------------+-----------+---------+-----------+--------+
| Forfeited during the year | (70,819) | - | (65,995) | - |
+--------------------------------------+-----------+---------+-----------+--------+
| Outstanding at the end of the year | 1,937,158 | - | 1,190,714 | - |
+--------------------------------------+-----------+---------+-----------+--------+
| Exercisable at 31 December | Nil | - | Nil | - |
+--------------------------------------+-----------+---------+-----------+--------+
On 28 February 2008 163,129 and on 28 November 2008 98,887 LTIP shares were
granted to the executive directors and certain senior management employees at a
market price of GBP2.7892 and GBP2.0225 respectively with a performance period
of three years from date of grant, and 418,001 and 137,786 on 28 February 2008
and 2 April 2008 respectively to certain senior management employees.
All LTIPs are exercisable at nil cost to the individual (with the exception of
the 1p nominal value of each
SDL Save As You Earn Scheme (SAYE)
The table below sets out the number and weighted average exercise prices (WAEP)
of, and movements in, the SDL SAYE Scheme during the year:
+-------------------------------------------------+------------+-----------+
| | 2008 | 2008 |
+-------------------------------------------------+------------+-----------+
| | No. | WAEP |
+-------------------------------------------------+------------+-----------+
| Outstanding at the beginning of the year | - | - |
+-------------------------------------------------+------------+-----------+
| Granted during the year | 170,544 | GBP2.56 |
+-------------------------------------------------+------------+-----------+
| Forfeited during the year | (734) | GBP2.56 |
+-------------------------------------------------+------------+-----------+
| Outstanding at the end of the year | 169,810 | GBP2.56 |
+-------------------------------------------------+------------+-----------+
| Exercisable at 31 December | - | - |
+-------------------------------------------------+------------+-----------+
For the SAYE shares outstanding as at 31 December 2008, the weighted average
remaining contractual life is 2.58 years.
The fair value of equity settled share options granted under the SDL SAYE Scheme
is estimated as at the date of grant using the Black Scholes model. The
following table lists the inputs to the model:
+--------------------------------------------------+-------------+
| | 2008 |
+--------------------------------------------------+-------------+
| Weighted average share price (pence) | 256 |
+--------------------------------------------------+-------------+
| Expected volatility | 35% |
+--------------------------------------------------+-------------+
| Option life | 3.5 years |
+--------------------------------------------------+-------------+
| Expected dividends | 0% |
+--------------------------------------------------+-------------+
| Risk-free interest rate | 5% |
+--------------------------------------------------+-------------+
10. ADDITIONAL CASH FLOW INFORMATION
Analysis of group net cash:
+-----------------------------+-----------+---------+-------------+-------------+-------------+
| | 1 January | Cash | Debt | Exchange | 31 December |
| | 2008 | flow | assumed | differences | 2008 |
| | | | on | | |
| | | | acquisition | | |
+-----------------------------+-----------+---------+-------------+-------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+-----------+---------+-------------+-------------+-------------+
| Cash and cash equivalents | 21,511 | 3,275 | - | 6,441 | 31,227 |
+-----------------------------+-----------+---------+-------------+-------------+-------------+
| Loans | (6,055) | 8,055 | (1,932) | (68) | - |
+-----------------------------+-----------+---------+-------------+-------------+-------------+
| | 15,456 | 11,330 | (1,932) | 6,373 | 31,227 |
+-----------------------------+-----------+---------+-------------+-------------+-------------+
| | | | | | |
+-----------------------------+-----------+---------+-------------+-------------+-------------+
+-----------------------------+-----------+----------+-------------+--------------+
| | 1 January | Cash | Exchange | 31 December |
| | 2007 | flow | differences | 2007 |
+-----------------------------+-----------+----------+-------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+-----------+----------+-------------+--------------+
| Cash and cash equivalents | 7,978 | 13,336 | 197 | 21,511 |
+-----------------------------+-----------+----------+-------------+--------------+
| Loans | (11,656) | 5,469 | 132 | (6,055) |
+-----------------------------+-----------+----------+-------------+--------------+
| | (3,678) | 18,805 | 329 | 15,456 |
+-----------------------------+-----------+----------+-------------+--------------+
11. POST BALANCE SHEET EVENTS
There are no known events occurring after the date of the Balance Sheet that
require disclosure.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR TJMMTMMATTRL
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