TIDMSDL
RNS Number : 8068W
SDL PLC
04 August 2009
4 August 2009
SDL PLC
Interim results for the six months ended 30th June 2009
Continuing take-up of Global Information Management
supports strong growth across business
SDL plc ("SDL" or "the Group"), a leader in the emerging market for Global
Information Management (GIM) solutions, is pleased to announce its unaudited
interim results for the six months ended 30th June 2009.
+----------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | % |
| | 6 months | 6 months | Change |
| | to | to | |
| | 30 June | 30 June | |
| | 2009 | 2008 | |
| | GBP'000 | GBP'000 | |
+----------------------------------------------+-----------+-----------+----------+
| Income Statement: | | | |
+----------------------------------------------+-----------+-----------+----------+
| Revenue | 83,293 | 76,007 | +10% |
+----------------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------------+-----------+-----------+----------+
| Profit before tax and amortisation of | 14,519 | 11,864 | +22% |
| intangible assets | | | |
+----------------------------------------------+-----------+-----------+----------+
| Profit before tax | 11,779 | 9,148 | +29% |
+----------------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------------+-----------+-----------+----------+
| Earnings per ordinary share - basic (pence) | 11.41 | 8.82 | +29% |
+----------------------------------------------+-----------+-----------+----------+
| Adjusted earnings per ordinary share - basic | 14.02 | 11.55 | +21% |
| (pence) | | | |
+----------------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------------+-----------+-----------+----------+
| Statement of Financial Position: | | | |
+----------------------------------------------+-----------+-----------+----------+
| Total equity | 154,658 | 125,452 | |
+----------------------------------------------+-----------+-----------+----------+
| Cash and cash equivalents | 32,919 | 15,978 | |
+----------------------------------------------+-----------+-----------+----------+
| Interest bearing loans and borrowings | - | (7,156) | |
+----------------------------------------------+-----------+-----------+----------+
Highlights:
* Results in line with expectations
* Headline sales growth of 10%
* 9% organic growth, 1% increase due to 2008 acquisitions
* Positive revenue growth from both segments
* Technology segment grew by 18% (20% currency benefit, 4% increase due to
acquisitions, 6% decrease at constant currency)
* Translation services growth of 6%, (20% currency benefit, 14% decrease at
constant currency)
* Cross leverage improving - integrated selling of SDL Tridion, SDL Trisoft and
Language Technology
* Progress in operating margin development and efficiency gains initiated
* XyEnterprise acquisition provides another step to true GIM leadership and
enterprise content management
* Careful and measured cost controls in place, but with continued investment into
key areas of the business
* Strong cash generation and net cash position of GBP32.9m
Mark Lancaster, Chairman and Chief Executive of SDL, commented:
"I am particularly pleased to be able to report a solid half year of further
progress for SDL, against a difficult macro economic climate. We have delivered
both revenue and operating profits in the first half which are significantly
ahead of the prior year, with positive organic growth in both technology and
translation services, albeit aided by favourable currency movements. This
continues the track record of a consistent year on year improvement in
performance and demonstrates the resilience of our business model. Our cash
generation was very strong and the strength of the balance sheet, with GBP32.9m
of net cash and no debt, provides considerable financial flexibility and
security.
"We believe we are starting to see real momentum in the realization of our GIM
strategy and it has been particularly rewarding to see the recent acquisitions
of Tridion, Idiom and Trisoft all generate very positive momentum in the first
half of the year.
"The acquisition of XyEnterprise, a recognized leader in Component Content
Management and Dynamic Publishing solutions, extends the range of solutions
available to our clients and is a further strategic step in our end-to-end GIM
technology offer.
"Given the global macro-economic environment, our approach to managing the
business will remain measured and appropriately cautious for the rest of 2009;
however the resilient performance in the first half provides a sound platform
for us to continue to deliver to expectations.
I remain confident that the business is positioned for continued long-term
growth and value creation for our shareholders."
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 |
+--------------------------------------------+-----------------------+
| Edward Bridges /Juliet Clarke /Emma | |
| Appleton | |
+--------------------------------------------+-----------------------+
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 500 enterprise GIM solutions, has deployed over
170,000 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 32 countries. For
more information, visit www.sdl.com
All trademarks are the property of their respective owners.
Chairman's Statement
Summary Performance
I am very pleased to report a solid performance from SDL in the first half of
2009, against a tough macro economic climate. Both revenue (GBP83.3 million) and
profit before tax and amortization (GBP14.5 million) are significantly ahead of
the prior year. Total revenues increased by 10% over the same period in 2008
with both the Technology and Translation Services divisions contributing
positive organic growth. The 10% revenue growth comprised 9% organic growth (of
which 20% was derived from the positive impact of currency, with a reduction of
11% at constant currency); and 1% from the inclusion of a full half year of
sales from Idiom and Trisoft. Translation Services sales grew by 6% over 2008 to
GBP54.0 million (2008: GBP51.1million) and the Technology businesses grew by 18%
over the same period last year to GBP29.3 million (2008: GBP24.9 million).
Translation Services revenues were most impacted by the general economy, with
the technology businesses showing considerable resilience. Profit before tax and
amortisation of intangible assets increased by 22% to GBP14.5 million (2008:
GBP11.9 million). We have managed the cost base carefully continuing to invest
in our strategic growth opportunities whilst flexing the cost base down in other
areas. The net cash position was GBP32.9 million at 30 June 2009 (31 December
2008: GBP31.2 million) which is after the payment of GBP9 million for the
acquisition of XyEnterprise Inc. in June 2009. Cash generation in the first half
of 2009 was strong which continues to give considerable financial security and
flexibility. Overall we believe the performance of SDL demonstrates the
resilience of our business model in a difficult economy.
Global Information Management Technology
SDL Trados Technology and SDL Enterprise Technologies (Language Technology
business unit)
Language Technology revenues grew by 8% in the first half of 2009.
As anticipated enterprise software licence revenues declined, but much less than
we expected, and actually grew in North America and Asia. There were some key
licence sales made across a variety of industries, which reinforces the return
on investment from using SDL Translation Management Systems to drive global
content. With licence sales in the period to companies such as American Heart,
LinkedIn, VMware and Ford Motor Company; SDL Enterprise North America (formerly
Idiom) is now making a positive contribution to Group Profit. Sales in the
Language Desktop business (SDL Trados Technology) were up 2% in the first half
of 2009. This slower growth was expected as customers delayed purchases pending
the launch of the new SDL Trados Studio 2009 product. The continued adoption of
this product, which is a considerable enhancement over SDL Trados 2007, presents
a whole new way of working for our user base.
Typically approximately 50% of the revenue for Language Technology comes from
subscription and support and maintenance. We are pleased to report that these
revenue streams have remained strong, supporting overall sales performance and
compensating for lower new licence sales.
SDL Tridion (global web content management business unit)
SDL Tridion continued to focus on enabling customers to deliver consistent and
persuasive customer experiences into multiple channels in multiple languages
with the launch of SDL Tridion 2009 and the SDL Tridion Marketing Suite
Solution. SDL Tridion has made sound progress in the implementation of
organizational change and, reflective of this, revenue growth was 22% in the
first half of 2009. Tridion continues to make excellent progress in developing
its business in the US and had some important client wins in the first half of
2009 with new licence sales to HP, PAF Sweden, Bourne Leisure, Quest Software,
Compassion International and Carrefour. The support and maintenance revenue
stream also remains strong as does the profit contribution to the group as a
whole.
SDL TrisoftTM (Component Content Management business unit)
The SDL Trisoft business has made progress in developing its sales base,
particularly in the US. The business grew by almost 60% (normalized) over the
same period last year and had notable new license deals in the first half with
Informatica and McAfee. SDL TrisoftTM is doing a solid job in cross leveraging
experience elsewhere in SDL in Enterprise sales and the offering is proving
highly complementary to SDL's Global Information Management offering. SDL
TrisoftTM is now integrated into SDL and making a positive revenue contribution
in its own right, whilst offering considerable opportunity to leverage deals
with SDL's Language technology, with around 50% of the deals being joint
Language Technology and Content Management Technology.
Translation Services
The Translation Services segment grew organically by 6% during the first half of
2009. This segment of the business was most impacted by general economic
conditions and benefitted from favourable impact of currency. The primary source
of growth continued to come from SDL's established client base. Customer
performance was mixed with increases at Garmin, Cisco, Philips, and RIM, coupled
with some new wins with companies such as American Heart, Continental Airlines
and PKR Technologies. This was partially offset by shortfalls at certain global
clients that were more heavily impacted by the general economic conditions.
There has been considerable price pressure in the Translation Services sector,
particularly from the larger businesses, however this has been mitigated by the
innovative customers such as Philips, HP and Garmin consolidating their spend to
SDL, and importantly adopting more of SDL's integrated GIM technology and
infrastructure to maximise performance and efficiency. The aggregate performance
of the Translation Services business demonstrates the importance of having a
well diversified client base.
The ability to flex the cost base combined with SDL's unique mix of leveraging
our own technology, global infrastructure and internal processes continued to
give a level of resilience to the Translation Services performance in a
difficult economy.
Acquisition of XyEnterprise Inc.
The acquisition of XyEnterprise Inc. in June 2009 represents a further strategic
step in delivering the SDL technology offer of a true end-to-end solution to
manage global content.
The acquisition builds on the acquisition of SDL Trisoft(TM), a Belgium-based
company and a world leader in Component Content Management software in 2008.
Since the Trisoft acquisition, SDL has seen an increasing demand for XML-based
solutions, particularly DITA, a rapidly growing standard for writing technical
content in XML. A roster of leading companies have adopted SDL Trisoft
including: NetApp, VMware, Micro Focus, Hach Company and others.
As a recognised leader in Component Content Management and Dynamic Publishing
solutions, XyEnterprise significantly extends SDL's product line with the
addition of two new robust publishing solutions, support for an additional
technical XML standard (S1000D) for the aerospace and defence industries and
also provides SDL with a high end publishing capability with XyEnterprise XPP
product. XyEnterprise brings to SDL significant technical expertise and a world
class customer base of around 200 clients such as Boeing, the US Navy, Lexis
Nexis and Unisys.
SDL sees these standards-based technologies as an important growth area in the
market and has created a new business unit under the brand name SDL XySoft(TM),
from the merger of SDL Trisoft and XyEnterprise. The unit will have a combined
management team and R&D organization. XyEnterprise will continue to do business
as a US-based, Delaware company.
Vision and Strategy for Global Information Management
If an international business is present in just 10 countries by definition 90%
of the content will be in a foreign language. The cost and complexity of
creating and maintaining this content to ship products into multiple regions is
enormous. SDL's Global Information Management value proposition manages this
complex process of delivery of global content into local markets. GIM ensures
consistency of branding, accelerates the roll out of new products and minimizes
translation costs. SDL has a solution that covers the whole translation supply
chain from creation of content to the publishing of that content, that covers
all functions of an enterprise and that centralizes language assets and
maximises re-use of those assets.
In the last 6 months we have seen more companies leveraging across SDL's
business units than ever before; with clients such as HP, already standardised
on SDL's Translation Management Technology (SDL TMS), purchasing SDL Tridion;
Philips working closely with SDL to enhance their go to market content strategy
with the help of SDL Tridion; Continental Airlines, already an owner of SDL's
TMS adopting SDL's localization services, Informatica, already an owner of SDL
TMS adopting SDL's Trisoft and Global Authoring Management technology. We are
seeing analysts such as Forrester and Gartner put more emphasis on the
management of language in their commentary and see the trend of Global
Information Management adoption across our business growing significantly as we
move into 2010.
Outlook
SDL does not anticipate any major uplift from economic recovery in the second
half of 2009 and expects trading conditions to remain challenging for the rest
of the year. Our approach to managing the business in the second half will
therefore continue to be measured and appropriately cautious. The solid,
resilient performance in the first half does, however, provide a sound platform.
Given current momentum we are confident that we will continue to deliver to full
year expectations.
In making the XyEnterprise acquisition and in launching our SDL Trados 2009
product we have made two further decisive steps in the realization of our long
term goal of delivering the full potential of our true end to end Global
Information Management solution.
The Board continues to believe that the business offers excellent opportunity
for both short term stability with long term growth and value creation.
Mark Lancaster
Chairman and CEO
SDL plc
3 August 2009
SDL plc
Interim Condensed Consolidated Income Statement
+-------------------------------------+-------+------------+-----------+------------+
| |Notes | Unaudited | Unaudited | Audited |
| | | 6 months | 6 months | Year to |
| | | to | to | 31 |
| | | 30 June | 30 June | December |
| | | 2009 | 2008 | 2008 |
| | | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------+-------+------------+-----------+------------+
| Continuing Operations | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Sale of goods | | 12,221 | 11,314 | 24,102 |
+-------------------------------------+-------+------------+-----------+------------+
| Rendering of services | | 71,072 | 64,693 | 134,673 |
+-------------------------------------+-------+------------+-----------+------------+
| REVENUE | 3 | 83,293 | 76,007 | 158,775 |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Cost of sales | | (37,545) | (34,282) | (71,884) |
+-------------------------------------+-------+------------+-----------+------------+
| GROSS PROFIT | | 45,748 | 41,725 | 86,891 |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Administrative expenses | | (31,500) | (29,816) | (61,298) |
+-------------------------------------+-------+------------+-----------+------------+
| OPERATING PROFIT BEFORE | | 14,248 | 11,909 | 25,593 |
| AMORTISATION OF INTANGIBLE ASSETS | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Amortisation of intangible assets | | (2,740) | (2,716) | (5,743) |
+-------------------------------------+-------+------------+-----------+------------+
| OPERATING PROFIT | 4 | 11,508 | 9,193 | 19,850 |
+-------------------------------------+-------+------------+-----------+------------+
| Finance costs | | - | (355) | (462) |
+-------------------------------------+-------+------------+-----------+------------+
| Finance revenue | | 271 | 319 | 471 |
+-------------------------------------+-------+------------+-----------+------------+
| Share of loss of associate | | - | (9) | (9) |
+-------------------------------------+-------+------------+-----------+------------+
| PROFIT BEFORE TAX | | 11,779 | 9,148 | 19,850 |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Tax expense | 5 | (3,121) | (2,520) | (5,310) |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| PROFIT FOR THE PERIOD | | 8,658 | 6,628 | 14,540 |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Profit for the period attributable | | 8,649 | 6,598 | 14,485 |
| to equity holders of the parent | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Minority interest | | 9 | 30 | 55 |
+-------------------------------------+-------+------------+-----------+------------+
| | | 8,658 | 6,628 | 14,540 |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| | | Pence | Pence | Pence |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Earnings per ordinary share - basic | 6 | 11.41 | 8.82 | 19.21 |
| (pence) | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Earnings per ordinary share - | 6 | 10.98 | 8.58 | 18.75 |
| diluted (pence) | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Adjusted earnings per ordinary | 6 | 14.02 | 11.55 | 24.99 |
| share - basic (pence) | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Adjusted earnings per ordinary | 6 | 13.50 | 11.23 | 24.38 |
| share - diluted (pence) | | | | |
+-------------------------------------+-------+------------+-----------+------------+
SDL plc
Interim Condensed Statement of Comprehensive Income
+-------------------------------------+-------+------------+-----------+------------+
| | | Unaudited | Unaudited | Audited |
| | | 6 months | 6 months | Year to |
| | | to | to | 31 |
| | | 30 June | 30 June | December |
| | | 2009 | 2008 | 2008 |
| | | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Profit for the period | | 8,658 | 6,628 | 14,540 |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Currency translation differences on | | (21,812) | 5,160 | 36,527 |
| foreign currency intangibles and | | | | |
| net investments | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Currency translation differences on | | 3,653 | (318) | (2,311) |
| foreign currency equity loans to | | | | |
| foreign subsidiaries | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Other comprehensive income | | (18,159) | 4,842 | 34,216 |
+-------------------------------------+-------+------------+-----------+------------+
| Total comprehensive income | | (9,501) | 11,470 | 48,756 |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Attributable to: | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Equity holders of the parent | | (9,510) | 11,440 | 48,701 |
+-------------------------------------+-------+------------+-----------+------------+
| Minority interests | | 9 | 30 | 55 |
+-------------------------------------+-------+------------+-----------+------------+
| | | (9,501) | 11,470 | 48,756 |
+-------------------------------------+-------+------------+-----------+------------+
SDL plc
Interim Condensed Consolidated Statement of Financial Position
+-------------------------------------+-------+------------+-----------+------------+
| |Notes | Unaudited | Unaudited | Audited |
| | | 30 June | 30 June | 31 |
| | | 2009 | 2008 | December |
| | | GBP'000 | GBP'000 | 2008 |
| | | | | GBP'000 |
+-------------------------------------+-------+------------+-----------+------------+
| ASSETS | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| NON CURRENT ASSETS | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Property, plant and equipment | | 4,044 | 4,041 | 4,524 |
+-------------------------------------+-------+------------+-----------+------------+
| Intangible assets | | 131,183 | 116,722 | 138,225 |
+-------------------------------------+-------+------------+-----------+------------+
| Deferred income tax | | 4,189 | 6,993 | 6,455 |
+-------------------------------------+-------+------------+-----------+------------+
| Rent deposits | | 655 | 420 | 641 |
+-------------------------------------+-------+------------+-----------+------------+
| | | 140,071 | 128,176 | 149,845 |
+-------------------------------------+-------+------------+-----------+------------+
| CURRENT ASSETS | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Trade and other receivables | | 34,135 | 36,631 | 44,537 |
+-------------------------------------+-------+------------+-----------+------------+
| Financial assets | 9 | 44 | 11 | - |
+-------------------------------------+-------+------------+-----------+------------+
| Current tax asset | | 1,330 | - | 561 |
+-------------------------------------+-------+------------+-----------+------------+
| Cash and cash equivalents | | 32,919 | 15,978 | 31,227 |
+-------------------------------------+-------+------------+-----------+------------+
| | | 68,428 | 52,620 | 76,325 |
+-------------------------------------+-------+------------+-----------+------------+
| TOTAL ASSETS | | 208,499 | 180,796 | 226,170 |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| LIABILITIES | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| CURRENT LIABILITIES | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Trade and other payables | | (39,268) | (31,440) | (43,527) |
+-------------------------------------+-------+------------+-----------+------------+
| Financial liabilities | 9 | - | (668) | (2,016) |
+-------------------------------------+-------+------------+-----------+------------+
| Current tax liabilities | | (6,887) | (7,199) | (8,252) |
+-------------------------------------+-------+------------+-----------+------------+
| Provisions | | (38) | (36) | (38) |
+-------------------------------------+-------+------------+-----------+------------+
| | | (46,193) | (39,343) | (53,833) |
+-------------------------------------+-------+------------+-----------+------------+
| NON CURRENT LIABILITIES | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Interest bearing loans and | 7 | - | (7,156) | - |
| borrowings | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Other payables | | (107) | (563) | (124) |
+-------------------------------------+-------+------------+-----------+------------+
| Deferred income tax | | (6,481) | (7,558) | (8,100) |
+-------------------------------------+-------+------------+-----------+------------+
| Provisions | | (1,060) | (724) | (1,084) |
+-------------------------------------+-------+------------+-----------+------------+
| | | (7,648) | (16,001) | (9,308) |
+-------------------------------------+-------+------------+-----------+------------+
| TOTAL LIABILITIES | | (53,841) | (55,344) | (63,141) |
+-------------------------------------+-------+------------+-----------+------------+
| NET ASSETS | | 154,658 | 125,452 | 163,029 |
+-------------------------------------+-------+------------+-----------+------------+
| EQUITY | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Share capital | | 760 | 754 | 757 |
+-------------------------------------+-------+------------+-----------+------------+
| Share premium | | 92,916 | 92,244 | 92,483 |
+-------------------------------------+-------+------------+-----------+------------+
| Shares to be issued | | 203 | 406 | 406 |
+-------------------------------------+-------+------------+-----------+------------+
| Retained earnings | | 39,784 | 22,410 | 30,250 |
+-------------------------------------+-------+------------+-----------+------------+
| Foreign exchange differences | | 20,995 | 9,780 | 39,154 |
+-------------------------------------+-------+------------+-----------+------------+
| TOTAL EQUITY ATTRIBUTABLE TO EQUITY | | 154,658 | 125,594 | 163,050 |
| HOLDERS OF THE PARENT | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+------------+
| Minority interest | | - | (142) | (21) |
+-------------------------------------+-------+------------+-----------+------------+
| | | 154,658 | 125,452 | 163,029 |
+-------------------------------------+-------+------------+-----------+------------+
The Interim Financial Information presented in this Interim Report was approved
by the Board of Directors on 3 August 2009.
SDL plc
Interim Condensed Consolidated Statement of Changes in Equity
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| | Share | Share | Shares | Retained | Foreign | Minority | Total |
| | Capital | Premium | to be | Earnings | Exchange | interest | |
| | | | Issued | | Differences | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| At 31 December | 750 | 91,866 | 541 | 14,921 | 4,938 | - | 113,016 |
| 2007 (audited) | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Profit for the | - | - | - | 6,598 | - | 30 | 6,628 |
| period | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Other comprehensive | - | - | - | - | 4,842 | - | 4,842 |
| income | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Total comprehensive | - | - | - | 6,598 | 4,842 | 30 | 11,470 |
| income | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Deferred taxation on | - | - | - | 201 | - | - | 201 |
| share based payments | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Arising on exercise | 4 | 243 | - | - | - | - | 247 |
| of share options | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Arising on | - | - | - | - | - | (172) | (172) |
| acquisition of | | | | | | | |
| Trisoft | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Arising on | - | 135 | (135) | - | - | - | - |
| acquisition of | | | | | | | |
| Passolo | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Share-based payments | - | - | - | 690 | - | - | 690 |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| At 30 June | 754 | 92,244 | 406 | 22,410 | 9,780 | (142) | 125,452 |
| 2008 (unaudited) | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Profit for the | - | - | - | 7,887 | - | 25 | 7,912 |
| period | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Other comprehensive | - | - | - | - | 29,374 | - | 29,374 |
| income | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Total comprehensive | - | - | - | 7,887 | 29,374 | 25 | 37,286 |
| income | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Deferred taxation on | - | - | - | (1,242) | - | - | (1,242) |
| share based payments | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Tax credit for share | - | - | - | 494 | - | - | 494 |
| options | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Arising on exercise | 3 | 239 | - | - | - | - | 242 |
| of share options | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Arising on | - | - | - | - | - | 96 | 96 |
| acquisition of | | | | | | | |
| Trisoft | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Share-based payments | - | - | - | 701 | - | - | 701 |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| At 31 December | 757 | 92,483 | 406 | 30,250 | 39,154 | (21) | 163,029 |
| 2008 (audited) | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Profit for the | - | - | - | 8,649 | - | 9 | 8,658 |
| period | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Other comprehensive | - | - | - | - | (18,159) | - | (18,159) |
| income | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Total comprehensive | - | - | - | 8,649 | (18,159) | 9 | (9,501) |
| income | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Deferred taxation on | - | - | - | (13) | - | - | (13) |
| share based payments | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Arising on exercise | 3 | 230 | - | - | - | - | 233 |
| of share options | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Arising on | - | - | - | - | - | 12 | 12 |
| acquisition of | | | | | | | |
| Trisoft | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Arising on | - | 203 | (203) | - | - | - | - |
| acquisition of | | | | | | | |
| Passolo | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| Share-based payments | - | - | - | 898 | - | - | 898 |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
| At 30 June | 760 | 92,916 | 203 | 39,784 | 20,995 | - | 154,658 |
| 2009 (unaudited) | | | | | | | |
+----------------------+---------+---------+---------+----------+-------------+----------+----------+
These amounts are attributable to equity holders of the parent company with the
exception of minority interest.
SDL plc
Interim Condensed Consolidated Statement of Cash Flows
+--------------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
| | 6 months | 6 | Year to |
| | to | months to | 31 |
| | 30 June | 30 June | December |
| | 2009 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| Profit before tax | 11,779 | 9,148 | 19,850 |
+--------------------------------------------+------------+------------+------------+
| Depreciation of property, plant and | 903 | 746 | 1,630 |
| equipment | | | |
+--------------------------------------------+------------+------------+------------+
| Amortisation of intangible assets | 2,740 | 2,716 | 5,743 |
+--------------------------------------------+------------+------------+------------+
| Finance costs | - | 355 | 462 |
+--------------------------------------------+------------+------------+------------+
| Finance revenue | (271) | (319) | (471) |
+--------------------------------------------+------------+------------+------------+
| Share of loss of associate | - | 9 | 9 |
+--------------------------------------------+------------+------------+------------+
| Minority interest | - | (30) | - |
+--------------------------------------------+------------+------------+------------+
| Share-based payments | 898 | 690 | 1,391 |
+--------------------------------------------+------------+------------+------------+
| Deferred taxation on share based payments | - | 201 | - |
+--------------------------------------------+------------+------------+------------+
| Decrease/(increase) in trade and other | 11,828 | (450) | (8,565) |
| receivables | | | |
+--------------------------------------------+------------+------------+------------+
| (Decrease)/increase in trade and other | (9,403) | (4,310) | 9,723 |
| payables and provisions | | | |
+--------------------------------------------+------------+------------+------------+
| Exchange differences | (1,688) | 726 | 1,271 |
+--------------------------------------------+------------+------------+------------+
| CASH GENERATED FROM OPERATIONS | 16,786 | 9,482 | 31,043 |
+--------------------------------------------+------------+------------+------------+
| Income tax paid | (4,102) | (1,086) | (4,647) |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| NET CASH FLOWS GENERATED FROM OPERATING | 12,684 | 8,396 | 26,396 |
| ACTIVITIES | | | |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| CASH FLOWS FROM INVESTING ACTIVITIES | | | |
+--------------------------------------------+------------+------------+------------+
| Payments to acquire property, plant and | (527) | (829) | (2,323) |
| equipment | | | |
+--------------------------------------------+------------+------------+------------+
| Receipts from sale of property, plant and | 69 | 6 | 78 |
| equipment | | | |
+--------------------------------------------+------------+------------+------------+
| Payment to acquire subsidiaries | (9,159) | (13,732) | (13,662) |
+--------------------------------------------+------------+------------+------------+
| Net cash acquired with subsidiaries | 1,287 | 343 | 343 |
+--------------------------------------------+------------+------------+------------+
| Interest received | 271 | 319 | 471 |
+--------------------------------------------+------------+------------+------------+
| NET CASH FLOWS USED IN INVESTING | (8,059) | (13,893) | (15,093) |
| ACTIVITIES | | | |
+--------------------------------------------+------------+------------+------------+
SDL plc
Interim Condensed Consolidated Statement of Cash Flows
+--------------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
| | 6 months | 6 months | Year to |
| | to | to | 31 |
| | 30 June | 30 June | December |
| | 2009 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------+------------+------------+------------+
| FINANCING ACTIVITIES | | | |
+--------------------------------------------+------------+------------+------------+
| Net proceeds from issue of ordinary share | 233 | 247 | 489 |
| capital | | | |
+--------------------------------------------+------------+------------+------------+
| Repayment of interest bearing loans and | - | (10,332) | (17,555) |
| borrowings | | | |
+--------------------------------------------+------------+------------+------------+
| Proceeds from new loans | - | 9,500 | 9,500 |
+--------------------------------------------+------------+------------+------------+
| Interest paid | - | (355) | (462) |
+--------------------------------------------+------------+------------+------------+
| NET CASH FLOWS GENERATED FROM FINANCING | 233 | (940) | (8,028) |
| ACTIVITIES | | | |
+--------------------------------------------+------------+------------+------------+
| INCREASE/(DECREASE) IN CASH AND CASH | 4,858 | (6,437) | 3,275 |
| EQUIVALENTS | | | |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| MOVEMENT IN CASH AND CASH EQUIVALENTS | | | |
+--------------------------------------------+------------+------------+------------+
| Cash and cash equivalents at start of the | 31,227 | 21,511 | 21,511 |
| period | | | |
+--------------------------------------------+------------+------------+------------+
| Increase/(decrease) in cash and cash | 4,858 | (6,437) | 3,275 |
| equivalents | | | |
+--------------------------------------------+------------+------------+------------+
| Effect of exchange rates on cash and cash | (3,166) | 904 | 6,441 |
| equivalents | | | |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| Net cash and cash equivalents at end of | 32,919 | 15,978 | 31,227 |
| the period | | | |
+--------------------------------------------+------------+------------+------------+
SDL plc
Notes to the Interim Condensed Consolidated Financial Statements
1. Basis of preparation and accounting policies
Basis of preparation
The interim condensed consolidated financial statements for the six months ended
30 June 2009 have been prepared on a going concern basis in accordance with IAS
34 Interim Financial Reporting.
The interim condensed consolidated financial statements do not include all the
information and disclosures required in the annual financial statements, and
should be read in conjunction with the Group's annual financial statements as at
31 December 2008.
Significant accounting policies
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in
preparation of the Group's annual financial statements for the year ended 31
December 2008, except for the adoption of new Standards and Interpretations as
of 1 January 2009, noted below:
IAS 1 Revised Presentation of Financial Statements
The revised Standard separates owner and non-owner changes in equity. The
statement of changes in equity includes only details of transactions with
owners, with non-owner changes in equity presented as a single line. In
addition, the Standard introduces the statement of comprehensive income which
presents all items of recognised income and expense, either in one single
statement, or in two linked statements. The Group has elected to present two
linked statements.
IFRS 8 Operating Segments
This Standard requires disclosure of information about the Group's operating
segments and replaces the requirement to determine primary (business) and
secondary (geographical) reporting segments of the Group. Adoption of this
Standard did not have any effect on the financial position or performance of the
Group. The Group determined that the operating segments were the same as the
business segments previously identified under IAS 14 Segment Reporting.
Additional disclosures about each of these segments are shown in Note 3,
including revised comparative information.
IFRS 2 Share-based Payment - Vesting Conditions and Cancellations
The Standard has been amended to clarify the definition of vesting conditions
and to prescribe the accounting treatment of an award that is effectively
cancelled because of a non-vesting condition is not satisfied. The adoption of
this amendment did not have any impact on the financial position or performance
of the Group.
2. Business Combinations
Acquisition of Trisoft NV
On 24 April 2009 the Group acquired the remaining 5% of the voting rights of
Trisoft NV (a company based in Belgium) taking its ownership to 100%. Cash
consideration of GBP190,400 was paid. The book value of the net liabilities of
Trisoft at this date were GBP202,000. The difference between the consideration
and the book value of the interest acquired has been recognised as goodwill.
Acquisition of XyEnterprise Inc
On 26 June 2009 the Group acquired 100% of the share capital of XyEnterprise
Inc, an unlisted company based in the United States of America. The principal
activity of XyEnterprise Inc is the provision of XML Component Content
Management (CCM) and Dynamic Publishing solutions.
The total cost of the combination comprised $14.8 million (GBP9.0 million) and
was funded from the Group's existing cash resources.
The provisional fair value of the identifiable assets and liabilities of
XyEnterprise Inc as at the date of acquisition were:
+---------------------------------------+------------+-------------+
| | Book value | Provisional |
| | | fair value |
| | | to |
| | | Group |
+---------------------------------------+------------+-------------+
| | Unaudited |
+---------------------------------------+--------------------------+
| | GBP'000 | GBP'000 |
+---------------------------------------+------------+-------------+
| Intangible assets | - | 3,279 |
+---------------------------------------+------------+-------------+
| Property, plant and equipment | 338 | 338 |
+---------------------------------------+------------+-------------+
| Cash and cash equivalents | 1,287 | 1,287 |
+---------------------------------------+------------+-------------+
| Trade receivables | 1,016 | 1,016 |
+---------------------------------------+------------+-------------+
| Other receivables | 469 | 469 |
+---------------------------------------+------------+-------------+
| Trade payables | (68) | (68) |
+---------------------------------------+------------+-------------+
| Other payables | (3,018) | (3,018) |
+---------------------------------------+------------+-------------+
| Deferred tax assets | 610 | 610 |
+---------------------------------------+------------+-------------+
| Deferred tax liabilities | - | (918) |
+---------------------------------------+------------+-------------+
| Net assets | 634 | 2,995 |
+---------------------------------------+------------+-------------+
| Provisional Goodwill arising on | | 5,974 |
| acquisition | | |
+---------------------------------------+------------+-------------+
| | | 8,969 |
+---------------------------------------+------------+-------------+
All fair values included in the above analysis are provisional fair values which
are based upon management's best estimate at the date of preparation of the
financial statements. The fair values are only provisional due to the proximity
of the acquisition to the date of the reporting period.
+---------------------------------------+------------+------------+
| Discharged by: | | GBP'000 |
+---------------------------------------+------------+------------+
| | | |
+---------------------------------------+------------+------------+
| Costs associated with the acquisition | | 83 |
+---------------------------------------+------------+------------+
| Cash paid to shareholders | | 8,886 |
+---------------------------------------+------------+------------+
| Total cash paid | | 8,969 |
+---------------------------------------+------------+------------+
| | | |
+---------------------------------------+------------+------------+
| Cash outflow on the acquisition: | | |
+---------------------------------------+------------+------------+
| Net cash and cash equivalents | | 1,287 |
| acquired with the subsidiary | | |
+---------------------------------------+------------+------------+
| Total cash paid | | (8,969) |
+---------------------------------------+------------+------------+
| Net cash outflow | | (7,682) |
+---------------------------------------+------------+------------+
| | | |
+---------------------------------------+------------+------------+
From the date of acquisition XyEnterprise Inc has contributed GBPnil of revenue
and a profit of GBPnil to the net profit before tax of the Group. If the
combination had taken place at the beginning of the year, the profit for the
Group would have been GBP8.7 million and revenue from continuing operations
would have been GBP86.5 million. Included in the GBP6.0 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.
3. Segment information
The Group operates in the Global Information Management industry. For management
purposes the Group is organised into business units based on their products and
services and has two reportable operating segments as follows:
* The Translation Services segment is the provision of a translation service to
customer's multilingual content.
* The Technology segment is the sale of enterprise and desktop technology
developed to help automate and manage multilingual assets, including web sites,
together with associated consultancy and other services.
Within the Technology segment a number of operating segments have been
aggregated to form the above reportable operating segments.
Management monitors the operating results of its business units separately for
the purpose of making decisions about resource allocation and performance
assessment. Segment performance is evaluated based on net contribution after
allocations, which in certain respects is measured differently from operating
profit or loss in the consolidated financial statements.
Six months ended 30 June 2009 (unaudited)
+----------------------------+-------------+------------+---------------+------------+
| | Translation | Technology | Adjustments | Total |
| | Services | GBP'000 | and | GBP'000 |
| | GBP'000 | | eliminations* | |
| | | | GBP'000 | |
+----------------------------+-------------+------------+---------------+------------+
| | | | | |
+----------------------------+-------------+------------+---------------+------------+
| External revenue | 53,970 | 29,323 | - | 83,293 |
+----------------------------+-------------+------------+---------------+------------+
| Internal revenue | 43 | - | (43) | - |
+----------------------------+-------------+------------+---------------+------------+
| Total revenue | 54,013 | 29,323 | (43) | 83,293 |
+----------------------------+-------------+------------+---------------+------------+
| Segment profit before tax | 9,944 | 1,835 | - | 11,779 |
+----------------------------+-------------+------------+---------------+------------+
Six months ended 30 June 2008 (unaudited)
+----------------------------+-------------+------------+---------------+------------+
| | Translation | Technology | Adjustments | Total |
| | Services | GBP'000 | and | GBP'000 |
| | GBP'000 | | eliminations* | |
| | | | GBP'000 | |
+----------------------------+-------------+------------+---------------+------------+
| | | | | |
+----------------------------+-------------+------------+---------------+------------+
| External revenue | 51,142 | 24,865 | - | 76,007 |
+----------------------------+-------------+------------+---------------+------------+
| Internal revenue | - | 15 | (15) | - |
+----------------------------+-------------+------------+---------------+------------+
| Total revenue | 51,142 | 24,880 | (15) | 76,007 |
+----------------------------+-------------+------------+---------------+------------+
| Segment profit before tax | 8,074 | 1,074 | - | 9,148 |
+----------------------------+-------------+------------+---------------+------------+
Year ended 31 December 2008 (unaudited)
+----------------------------+-------------+------------+---------------+------------+
| | Translation | Technology | Adjustments | Total |
| | Services | GBP'000 | and | GBP'000 |
| | GBP'000 | | eliminations* | |
| | | | GBP'000 | |
+----------------------------+-------------+------------+---------------+------------+
| | | | | |
+----------------------------+-------------+------------+---------------+------------+
| External revenue | 106,100 | 52,675 | - | 158,775 |
+----------------------------+-------------+------------+---------------+------------+
| Internal revenue | - | 69 | (69) | - |
+----------------------------+-------------+------------+---------------+------------+
| Total revenue | 106,100 | 52,744 | (69) | 158,775 |
+----------------------------+-------------+------------+---------------+------------+
| Segment profit before tax | 17,895 | 1,955 | - | 19,850 |
+----------------------------+-------------+------------+---------------+------------+
*Adjustments and eliminations comprise the elimination of inter segment revenue
against inter-segment cost of sales. Transfer prices between operating segments
are on an arm's-length basis in a manner similar to transactions with third
parties.
Revenue by geographical destination was as follows:
+----------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
| | 6 months | 6 months | Year to |
| | to | to | 31 |
| | 30 June | 30 June | December |
| | 2009 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| United Kingdom | 6,218 | 6,436 | 13,696 |
+----------------------------------------+------------+------------+------------+
| Rest of Europe | 33,292 | 30,555 | 64,918 |
+----------------------------------------+------------+------------+------------+
| USA | 30,814 | 27,720 | 57,505 |
+----------------------------------------+------------+------------+------------+
| Rest of North America | 6,415 | 5,516 | 10,671 |
+----------------------------------------+------------+------------+------------+
| Rest of the World | 6,554 | 5,780 | 11,985 |
+----------------------------------------+------------+------------+------------+
| | 83,293 | 76,007 | 158,775 |
+----------------------------------------+------------+------------+------------+
Segment assets:
+----------------------------+-------------+------------+--------------+------------+
| | Translation | Technology | Adjustments | Total |
| | Services | GBP'000 | and | GBP'000 |
| | GBP'000 | | eliminations | |
| | | | GBP'000 | |
+----------------------------+-------------+------------+--------------+------------+
| Segments assets: | | | | |
+----------------------------+-------------+------------+--------------+------------+
| At 30 June 2009 | 44,841 | 125,220 | (1)38,438 | 208,499 |
+----------------------------+-------------+------------+--------------+------------+
| At 30 June 2008 | 51,098 | 106,727 | (2)22,971 | 180,796 |
+----------------------------+-------------+------------+--------------+------------+
| At 31 December 2008 | 54,103 | 133,824 | (3)38,243 | 226,170 |
+----------------------------+-------------+------------+--------------+------------+
(1) Segment assets do not include cash (GBP32,919,000), Corporation Tax
(GBP1,330,000) and Deferred Tax (GBP4,189,000).
(2) Segment assets do not include cash (GBP15,978,000), and Deferred Tax
(GBP6,993,000).
(3) Segment assets do not include cash (GBP31,227,000), Corporation Tax
(GBP561,000) and Deferred Tax (GBP6,455,000).
4. Operating profit
+----------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
| | 6 months | 6 months | Year to |
| | to | to | 31 |
| | 30 June | 30 June | December |
| | 2009 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+------------+------------+------------+
| Is stated after charging/(crediting): | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Research and development expenditure | 4,774 | 3,080 | 8,044 |
+----------------------------------------+------------+------------+------------+
| Bad debt expense | 84 | 55 | 460 |
+----------------------------------------+------------+------------+------------+
| Depreciation of owned and leased | 903 | 746 | 1,630 |
| assets | | | |
+----------------------------------------+------------+------------+------------+
| Amortisation of intangibles | 2,740 | 2,716 | 5,743 |
+----------------------------------------+------------+------------+------------+
| Operating lease rentals for plant and | 319 | 25 | 763 |
| machinery | | | |
+----------------------------------------+------------+------------+------------+
| Operating lease rentals for land and | 2,518 | 2,437 | 4,953 |
| buildings | | | |
+----------------------------------------+------------+------------+------------+
| Operating lease rentals received for | (75) | (88) | (150) |
| land and buildings | | | |
+----------------------------------------+------------+------------+------------+
| Net foreign exchange differences | (542) | 2,328 | (764) |
+----------------------------------------+------------+------------+------------+
| (Gain)/loss on foreign exchange | (226) | (136) | 3,764 |
| derivatives | | | |
+----------------------------------------+------------+------------+------------+
5. Taxation
+----------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
| | 6 months | 6 months | Year to |
| | to | to | 31 |
| | 30 June | 30 June | December |
| | 2009 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+------------+------------+------------+
| UK corporation tax: | | | |
+----------------------------------------+------------+------------+------------+
| UK current tax on income for the | 578 | 291 | 1,264 |
| period | | | |
+----------------------------------------+------------+------------+------------+
| Adjustments in respect of prior | - | - | (122) |
| periods | | | |
+----------------------------------------+------------+------------+------------+
| Tax credit for share options taken to | - | - | 494 |
| equity | | | |
+----------------------------------------+------------+------------+------------+
| | 578 | 291 | 1,636 |
+----------------------------------------+------------+------------+------------+
| Foreign tax: | | | |
+----------------------------------------+------------+------------+------------+
| Current tax on income for the period | 2,212 | 2,545 | 4,247 |
+----------------------------------------+------------+------------+------------+
| Adjustments in respect of prior | - | - | 58 |
| periods | | | |
+----------------------------------------+------------+------------+------------+
| | 2,212 | 2,545 | 4,305 |
+----------------------------------------+------------+------------+------------+
| Total current taxation | 2,790 | 2,836 | 5,941 |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Deferred taxation: | | | |
+----------------------------------------+------------+------------+------------+
| Origination and reversal of timing | 344 | (517) | 487 |
| differences | | | |
+----------------------------------------+------------+------------+------------+
| Adjustments in respect of prior | - | - | (77) |
| periods | | | |
+----------------------------------------+------------+------------+------------+
| Deferred tax (debit)/credit for share | (13) | 201 | (1,041) |
| options taken to equity | | | |
+----------------------------------------+------------+------------+------------+
| Total deferred taxation | 331 | (316) | (631) |
+----------------------------------------+------------+------------+------------+
| Tax Expense | 3,121 | 2,520 | 5,310 |
+----------------------------------------+------------+------------+------------+
Due to the requirements of IAS 12, in conjunction with IFRS 2, the Schedule 23
tax credit for share options exercised and deferred taxation on unexpired
options have partly been recorded in equity. For the 6 months ended 30 June 2009
this has the effect of increasing the effective tax rate by approximately 0.1%
(at 31 December 2008: 2.8%; at 30 June 2008: 2.2%).
6. Earnings per share
+----------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
| | 6 months | 6 months | Year to |
| | to | to | 31 |
| | 30 June | 30 June | December |
| | 2009 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+------------+------------+------------+
| Profit for the period attributable to | 8,649 | 6,598 | 14,485 |
| equity holders of the parent | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| | m | m | m |
+----------------------------------------+------------+------------+------------+
| Basic weighted average number of | 75.8 | 75.1 | 75.4 |
| shares (million) | | | |
+----------------------------------------+------------+------------+------------+
| Employee share options and shares to | 2.9 | 2.2 | 1.9 |
| be issued (million) | | | |
+----------------------------------------+------------+------------+------------+
| Diluted weighted average number of | 78.7 | 77.3 | 77.3 |
| shares (million) | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Adjusted earnings per share: | | | |
+----------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
| | 6 months | 6 months | Year to |
| | to | to | 31 |
| | 30 June | 30 June | December |
| | 2009 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+------------+------------+------------+
| Profit for the period attributable to | 8,649 | 6,598 | 14,485 |
| equity holders of the parent | | | |
+----------------------------------------+------------+------------+------------+
| Amortisation of intangible fixed | 2,740 | 2,716 | 5,743 |
| assets | | | |
+----------------------------------------+------------+------------+------------+
| Less: deferred tax benefit associated | (760) | (653) | (1,392) |
| with amortisation of intangible fixed | | | |
| assets | | | |
+----------------------------------------+------------+------------+------------+
| Adjusted profit for the period | 10,629 | 8,661 | 18,836 |
| attributable to equity holders of the | | | |
| parent | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| | m | m | m |
+----------------------------------------+------------+------------+------------+
| Basic weighted average number of | 75.8 | 75.1 | 75.4 |
| shares (million) | | | |
+----------------------------------------+------------+------------+------------+
| Diluted weighted average number of | 78.7 | 77.3 | 77.3 |
| shares (million) | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| | Pence | Pence | Pence |
+----------------------------------------+------------+------------+------------+
| Adjusted earnings per ordinary share - | 14.02 | 11.55 | 24.99 |
| basic (pence) | | | |
+----------------------------------------+------------+------------+------------+
| Adjusted earnings per ordinary share - | 13.50 | 11.23 | 24.38 |
| diluted (pence) | | | |
+----------------------------------------+------------+------------+------------+
7. Interest-bearing loans
The Group met the cost of acquisition of XyEnterprise Inc of GBP9.0 million from
existing cash reserves. The undrawn committed borrowing facility is GBP20.0
million (December 2008: GBP20.0 million).
8. Share-based payments
On 21 January 2009, 372,269 Long Term Incentive Plan (LTIP) shares were awarded
and on 2 March 2009, 814,846 LTIP shares and 346,342 stock options were awarded
to certain key senior executives and employees of the SDL Group. The exercise
price of the options of 290.50 pence was equal to the market price of the shares
on the date of grant.
9. Derivatives and other financial instruments
At 30 June 2009 the Group had forward contracts to sell $2 million each month
through to 28 August 2009 at between $1.6142 to $1.6152 to GBP1.00. As at 30
June 2009 the Group's hedging contracts were valued at an asset of GBP44,355
(December 2008: liability GBP2,016,068). The exchange gains on these contracts
were recognised in the income statement during the period as the hedging
contracts do not qualify for hedge accounting.
10. General notes
The financial information in these interim statements does not constitute
statutory accounts as defined in Section 435 of the Companies Act 2006. The
financial information for the year ended 31 December 2008 is based on the
statutory accounts for the financial year ended 31 December 2008. Those
accounts, upon which the auditors issued an unqualified opinion in accordance
with section 235 Companies Act 1985 and did not contain a statement under
section 237 (2) or (3) Companies Act 1985, have been delivered to the registrar
of companies. The interim financial statements were approved by the Board of
Directors on 3 August 2009.
11. Events after the statement of financial position date
There are no known events occurring after the statement of financial position
date that require disclosure.
Responsibility Statement by the Management Board
The directors confirm that to the best of their knowledge, and in accordance
with IAS 34 Interim Financial Reporting, that the interim consolidated financial
statements give a true and fair view of the assets, liabilities, financial
position and profit and loss of the Group, and the interim management report of
the Group includes a fair review of the development and performance of the
business and the position of the Group, together with a description of the
principal opportunities, risks and uncertainties associated with the expected
development of the Group for the remaining months of the financial year. There
have been no related parties' transactions that are significant to an
understanding of the changes in financial position and performance of the Group
since the last annual reporting date.
For and on behalf of the Board
John Hunter
This information is provided by RNS
The company news service from the London Stock Exchange
END
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