TIDMSDL
RNS Number : 9168F
SDL PLC
02 August 2016
2 August 2016
SDL plc
Interim results for the six months ended 30 June 2016
Results in line with management expectations
SDL plc ("SDL", "the Group" or the "Company"), a leader in
global content management and language translation software and
services, announces its unaudited interim results for the six
months ended 30 June 2016.
Unaudited 6 months Unaudited 6 months
to 30 June 2016 to 30 June 2015
Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
Income Statement
Revenue 120.4 13.3 133.7 120.7 13.2 133.9
Profit before
tax amortisation
and one-off items 11.6 (2.1) 9.5 11.4 (2.1) 9.3
Profit before
tax 4.9 (4.0) 0.9 8.9 (2.9) 6.0
Earnings per ordinary
share
basic (pence) 5.60 (4.96) 0.64 8.54 (3.78) 4.76
Adjusted Earnings
per ordinary Share
- basic (pence) 12.10 (2.99) 9.11 11.05 (2.99) 8.06
Statement of Financial
position
Total equity 178.0 194.8
Cash and cash
equivalents 15.2* 11.2
Interest bearing
loans and borrowings (1.9) (3.0)
* GBP15.1m cash on balance sheet GBP0.1m disclosed in Assets
held for sale
Financial highlights
-- Revenue from Continuing Operations GBP120.4 million (2015: GBP120.7 million)
-- Profit before tax, amortisation and one-off items (PBTA) for
Continuing Operations GBP11.6 million, Total GBP9.5 million (2015:
Total GBP9.3 million, Continuing Operations GBP11.4 million)
-- One-off items of GBP5.9 million (2015: GBPnil)
-- Profit after tax GBP0.5 million (2015: GBP3.9 million)
-- Adjusted Continuing Operations earnings per share of 12.10 pence (2015: 11.05 pence)
-- Cash generated from operations of GBP6.4 million (2015:
GBP2.8m); period-end net cash increased to GBP13.3 million (2015:
GBP8.2 million)
-- As expected, reduced Language Services PBTA margins of 11.7%
due to planned investments which were slightly higher than
initially planned
-- Language Technologies and Global Content Technologies bookings up 6%, new bookings up 16%
-- Global Content Technologies PBTA margins up to +9% from -16%
following new licence wins and reorganisation activity over the
past 12 months
-- SDL top 10 clients increased revenue by 23% in H1 2016
Operational highlights
-- Implementation of (previously announced) new strategy and
organisational structure to enhance customer focus, improve agility
and pursue key strategic aims
-- Key appointments made to the Group's leadership team in the
first half including CEO, Adolfo Hernandez
-- Disposal of non-core businesses progressing
-- Diversified client base, no one customer accounts for more than 5% of total revenue
-- We secured 32 new enterprise customers with world leading brands
-- Translation Productivity secured over 200 new corporate
customers and expanded presence in over 300 existing corporate
accounts
-- Secured 19 new Life Sciences clients (mix of new logos and
new divisions within existing customers)
Commenting on the business and the results, Adolfo Hernandez,
CEO of SDL, said:
"Since joining SDL three months ago, I can see that we have
tremendous opportunities to drive long-term sustainable growth and
shareholder value. Much work has been done to more clearly
understand our clients' needs and how to better align our product
and services offering to them. In the short-term I believe there
are areas where we can improve productivity and efficiency but
there remains a lot of work to do to take full advantage of the
opportunities in our chosen markets.
We are working hard to create a more scalable platform to
compete even more effectively as one of the leaders in our
industry. SDL has the right strategy in place and I am excited
about the opportunity ahead of us. We have started executing our
strategic plan and as we enter the second half, we are confident of
the outlook for the current financial year and beyond."
Chairman's Statement
The first six months of 2016 has been a period of significant
strategic progress for the Group. We began the year with three key
goals and I am pleased to say that we have achieved all of them.
Firstly, we completed the situational analysis phase of our
strategic planning. This resulted in our decision to re-focus our
business around its heritage of market leadership in
technology-enabled Language capabilities. As a consequence we
decided to divest three Non-Core businesses and this process is
progressing.
Secondly, we have recruited a first class Chief Executive
Officer. Adolfo Hernandez joined us at the end of the first quarter
and he has already had a significant impact on the business.
Following a period of transition of my Executive responsibilities,
I have now been able to return to my role of Non-Executive
Chairman. Adolfo has inherited the strategic work we began in
October, and accelerated the development of the strategy which we
believe will serve SDL for the foreseeable future. This has
resulted in some changes to our organisational structure and the
arrival of new members of the leadership team.
Adolfo's experience in leading global businesses has already
proved vital in ensuring that SDL can attract the highest quality
talent to take our business forward. Furthermore, he has spent much
of the last three months visiting our many locations and also
consulting with colleagues, customers and partners. I believe this
has accelerated our understanding of our potential and Adolfo is
now in a position to lead the next phase of our development as a
global leader in our chosen market segments.
The third goal we set at the beginning of 2016 was to ensure
that we continued to deliver for our various stakeholders at a time
of considerable change for our business. I am pleased to say that
the first half results were in line with our expectations at the
headline level, albeit the mix was slightly different than we
expected. The Global Content Technologies business has benefitted
more than we anticipated from the restructuring we undertook at the
beginning of the year. As we foresaw, Language Services has
responded to some market and operational issues, which fully
justify our decision to invest in order to reverse their impact.
However, we won't begin to see the benefits of these investments
until later. I continue to be grateful for the dedication and focus
of our people in continually producing the right outcome for our
customers and partners during a time of change.
SDL is a well-established global company with significant
international presence and a global client base. Operationally we
trade and resource in many parts of the world and with the vast
majority of revenue outside the UK and we expect to remain very
diversified from a geographic perspective. SDL products and
services are compelling for those companies who do trade
internationally and that will not change - Globalisation is here to
stay.
As a Board, we have considered the operational implications of
Brexit and it is our view that on balance, we do not expect a
material impact on our business from an operational perspective
albeit the short term macroeconomic and foreign exchange effects
have yet to play out. Nevertheless, the outlook for the business
remains solid and we look to the remainder of the financial year
with confidence.
David Clayton
Chairman
CEO Review
Summary Performance
The first half of 2016 has been a period of differing progress
within our Continuing Operations. We are very pleased with the
improved new bookings performance and profitability in Language
Technology and Global Content Technologies (GCT) which demonstrates
good progress in our software businesses which now represent
GBP45.5 million of revenue and GBP2.8 million of PBTA in the
period. This progress in software has been offset by slightly lower
than expected margins in Language Services. Our Non-Core businesses
have performed slightly ahead of our expectations.
Revenue from Continuing Operations was flat against the prior
period at GBP120.4 million (2015: GBP120.7 million). Total bookings
from our technology segments were up 6% at constant currency with a
16% increase in new bookings in the period. Total revenues were
also flat vs the prior period at GBP133.7 million (2015: GBP133.9
million).
I'm pleased to report that we have secured new customers across
the Group through a variety of sector verticals. Our focus on key
target accounts in Language Services has resulted in SDL winning
several new flagship accounts, major wins in our Translation
Management products increased bookings and our Machine Translation
business has performed particularly strongly during the half as a
result of new contracts. Our SDL Language Cloud Managed Translation
platform continues to gain momentum with new customer wins in both
the Enterprise and SMB markets from both our direct sales and
online channels.
Profit before taxation, amortisation of intangible assets and
one-off items ("PBTA") from Continuing Operations and Total was
GBP11.6 million and GBP9.5 million (2015: Total GBP9.3 million,
Continuing Operations GBP11.4 million).
The Group's profit after tax amounted to GBP0.5 million, after
one-off items of GBP5.9 million (2015: profit after tax GBP3.9
million, one-off items GBPnil).
Gross cash in the business at the period-end was GBP15.2 million
(2015: GBP11.2 million) and net cash after borrowings was GBP13.3
million (2015: GBP8.2 million).
Cash generated from operations was GBP6.4 million (2015: GBP2.8
million). Cash generation in the period has been impacted by cash
outflows associated with the restructuring programme and 2015 staff
incentive payments. Capital expenditure was GBP1.0 million (2015:
GBP1.3 million). Tax paid was GBP4.2 million (2015: GBP2.8
million).
Operational and strategy update
Since I took up the helm at SDL in April, I have had three
months of intense engagement with the organization, customers,
investors and partners and I am very excited about the
opportunities that we have for long-term profitable growth. Having
now spent time with all the business lines and all the regions
where we operate I am starting to see that there are a number of
common themes that represent both the challenges we face and what
we must address to take advantage of the opportunities.
I have been actively driving the operational review that David
Clayton began towards the end of last year. Together, we have
thoroughly evaluated every piece of the business, analysed our
customers and our markets to ensure our strategy best positions us
for future growth and global competitive advantage.
In January, the Board announced that SDL would be refocusing
around its core strengths in language solutions and global content
technologies, helping brands to manage, translate and deliver
localised content on a global scale, which I absolutely believe was
the right decision. It is this unique combination of language
services and translation technology, coupled with our web and
technical content management technologies, which gives us a huge
opportunity for SDL to capitalise on what is a large and growing
global market. Speaking to our customers, however, it's clear we
need to address a number of areas to take advantage of this
opportunity. In order to win we must adapt to:
-- Become more agile;
-- Become simpler to work with;
-- Become more solutions focused and solve the needs of our customers in their industries; and
-- Become a strategic partner to our customers.
Many of the fixes are for us to drive and we are already
implementing solutions to address them as follows:
-- We must address the immediate opportunities that we have around us.
We have identified many opportunities to improve the way we
operate and serve our customers. Within our operations we have
clearly identified internal processes and systems that are
incurring unnecessary costs and creating business inertia.
We believe that we can reduce both through investment in
automation in project management and administrative work streams
where we would expect to be able to strike a balance between those
services we perform in-house and those that are capable of being
outsourced to drive down costs. We also see gains to be made in
investment in business and resource planning.
Immediate actions in these areas are expected to result in a
more agile business, improved productivity and, most importantly,
improved margin and the scalability to support our growth ambitions
- but there is much more to do. Azad Ootam, a seasoned
transformation executive, has been appointed as Chief
Transformation Officer to drive these initiatives.
-- Take advantage of the market opportunities
Our markets are large, growing and rapidly changing but
historically our inward focus has slowed our response to trends and
hampered our ability to address the changing needs of our
customers. To date, our business has been too regionally focused
and not replicating success well enough. So we are now shifting our
Go to Market strategy to drive growth in our most profitable
industry verticals, leveraging our presence and, most importantly,
our industry sector domain experience across our global
footprint.
In addition, we are implementing a strategy to build presence
outside of our traditional segments - for example, Life Sciences -
where we see the opportunity for our combined language services and
technology offer bringing significant value to highly complex
customer needs and we have already had early successes around the
world.
Our technology base has always been a key differentiator for SDL
and I am excited about the untapped potential within our Language
and GCT software offerings with a market leading deep-learning
Machine Translation stack, the potential to evolve Language
technologies to the Language Cloud, as well as the ability to
better integrate our Web and Knowledge Centre software platforms
into other solutions present in our customer environments.
However, historically we have invested in certain technologies
and innovations (namely deep learning Machine Translation and
Natural Language processing engines and connectors) that can and
should be taken to market widely via initiatives such as an OEM and
connector strategy. Our recently signed contract with leading CRM
software provider, Salesforce, provides an example of how we can
leverage this opportunity. Thomas Labarthe, formerly of Lookout, a
leading mobile security software company, has been appointed as SVP
of Business Development to drive this initiative, one we believe is
capable of scaling significantly in the medium to long term.
-- Increase Customer Focus
Despite our vision, our teams have been pursuing different
priorities and our Go To Market approach has been fragmented,
inefficient and we are not always speaking the "customers'
language" nor are we reflecting the customers organisational
structure.
To address this, we have implemented two key initiatives. First,
we have created a single sales organisation and second, a single
customer delivery organisation (under the leadership of SDL
veterans Allan Hall and Silke Zschweigert respectively) which will
be simpler, more agile, and properly aligned - in terms of
objectives and management incentives to win and deliver profitable
contracts - across both technology and services. This
organisational change gives us a simpler more efficient Customer
Engagement model and one we expect to result in greater sales
momentum and higher customer satisfaction.
-- We must reposition the SDL brand
We need to give clarity both internally and externally to who
SDL is, what we do and why customers should care. Our brand story
needs to account for our heritage and strengths, acknowledge the
market needs and capture the strategic importance of our offerings
as well as clearly show our vision and areas of investment going
forward. Our new CMO, Peggy Chen is already driving this
forward.
-- We must execute our strategy
We are working to move SDL towards intelligently combining
language services and technology offerings to create highly
differentiated language/content-centric solutions that meet
customers' needs. They need to support clients as they 'go Global'
whilst differentiating SDL and providing significant competitive
advantage.
We believe that SDL is the only company with the technology and
services expertise to help world-class organisations master the
complexity of delivering personalized digital experiences with
global reach and 'go global faster'. In a business environment
where country and regional GDP growth is sluggish, exploiting new
markets is an important strategic priority.
In summary, our software and services are relevant across
multiple industries and we know how to win in those markets. This
is the base of our services business, we now need to do it in a
more systemic, efficient, scalable aligned way. Similarly, we have
a strong heritage in Service Delivery that must now be adapted to
the new requirements in the market looking for efficiency,
responsiveness and quality.
As our Chairman states, we are confident that we have
strategically aligned our organisation to focus on future
profitable growth, innovation and customer value and are confident
we have the right strategy to be the unrivalled leader in our
industry. We now have a new Executive team in place, that blends
SDL veterans and new talent, which will be focusing on execution
and increasing business performance.
Outlook
We offer the smartest solutions in the market and have deep
domain expertise. We have done a lot of work to more fully
understand our clients' needs and how to align our product and
services offering to them. Our loyal staff are embracing change,
recognising the significant opportunities that lay before us. There
remains a lot of work to do and additional investment to make but
we have aligned our organisation, product set and customer value
proposition and are confident we have the right strategy in place
to be the unrivalled leader in our industry and drive long term
sustainable growth and shareholder value.
SDL is a well-diversified business both geographically and in
terms of the industry sectors that we address. We serve a customer
need that is driven by the inexorable trend towards the
Globalisation of businesses. Despite the recent upheavals in Europe
following the UK's decision to leave the European Union, we are
confident of the outlook for the current financial year and
beyond.
Adolfo Hernandez
Chief Executive Officer
Operating and Financial Review
Performance by Segment
Following the operational review undertaken last year, the Group
has four operating segments; Language Services, Language
Technology, Global Content Technologies and the Non-Core
businesses. During the period, the Group has revised its cost
allocation methodologies such that only costs directly attributable
to discontinued operations are allocated to this latter segment.
The impact of this change has been to reallocate costs of GBP3.2
million from discontinued operations to the Language Services,
Language Technology and Global Content Technologies segments. In
accordance with IFRS8, the internal recharges for the comparative
period have been restated to provide consistent and meaningful
information.
Language Services (contributing GBP74.9 million or 62% of
Continuing Operations revenue and GBP8.8 million of PBTA) (2015:
GBP76.1 million or 63% of Continuing Operations revenue and GBP15.1
million of PBTA).
Revenue in 2016 was GBP74.9 million, 2% down on the prior
period, following the loss of the majority of the Microsoft account
at the end of last year. If Microsoft revenues are excluded, total
and repeat revenues were up 5% and 2% respectively on the prior
period.
PBTA margin fell from 19.9% to 11.7% in 2016 primarily due to
planned investments in customer acquisition, sales and
infrastructure, plus a slightly higher than expected investment in
delivery and quality resources to enhance our service to customers
(which impacted PBTA margin by c-0.8%).
In 2016, we have continued to focus on our core market segments,
namely Life Science, Retail & Consumer, Auto &
Manufacturing, Hi Tech, Finance, Travel & Tourism, and
Government. Our focus on key target accounts resulted in many new
account wins including Basware, PSA Peugeot Citroen, Lindex AB,
Konsberg, and Yara.
In the first half of 2016, we focused on operational excellence,
investing in new systems and technology integrated with the use of
our own tools, including SDL Groupshare, MT usage and SDL Trados
Studio, to deliver world-class services to our clients.
Language Technology (contributing GBP19.4 million or 16% of
Continuing Operations revenue and GBP0.5 million PBTA) (2015:
contributing GBP17.9 million or 15% of Continuing Operations
revenue and GBP0.5 million PBTA).
Language Technology total bookings increased 9% at constant
currency, with new bookings growing 4% at constant currency and
renewal bookings growing by 12%.
Revenue in 2016 was GBP19.4m, 8% up on the prior period. Machine
translation revenues increased 44% and Translation Productivity
revenues increased by 6%. Annual Recurring Revenue ("ARR")
increased by 4% to GBP22.1 million during the period to June
2016.
PBTA margin was 2.6%, a fall of 0.2% in the period. Margins have
remained substantially at prior period levels due to increased
sales, marketing and development costs and the impact of increased
SaaS bookings.
Our Translation Productivity tools are used by 70% of the
world's professional translators and in the first half of 2016 our
position continued to grow.
Our Translation Management products increased bookings with
major wins including Alticor (Amway North America), Vanilla Air,
PSA Peugeot Citroen, RCI Europe, Toyota Industries and Waters.
Our Machine Translation business has performed particularly
strongly during this period with major wins including Wolf Oil
Corp, Peugeot Citroen Automobiles and Lindex. Revenue and bookings
were both significantly up and volumes passed a major milestone,
exceeding 20 billion words being translated each month by SDL MT
engines. We plan a major new focus on the commercial MT market
later this year with the launch of SDL ETS 7.0, the first major new
release targeting this important market.
The first half of 2016 also saw the official launch of SDL
Global Team for Salesforce on the AppExchange as well as the launch
of a proof of concept for Oracle. New wins include DC Adapco.
Our SDL Language Cloud Managed Translation platform continues to
gain momentum with new customer wins in both the Enterprise and SMB
markets from both our direct sales and online channels. New client
wins include DDI, Reach Local, Pyramid Analytics, SABA and
Witt-Gruppe.
Global Content Technologies (contributing GBP26.1 million or 22%
of Continuing Operations revenue and GBP2.3 million of PBTA) (2015:
contributing GBP26.7 million or 22% of Continuing Operations
revenue and losses of GBP4.2 million PBTA).
Global Content Technologies total bookings were up 5% at
constant currency. New bookings increased 30% on the prior period
following the closure of two material deals in the period. ARR
increased by 5% to GBP36.0 million during the period to June
2016.
PBTA increased by GBP6.5 million, from losses of GBP4.2 million
in the prior period, to GBP2.3 million. This increase was driven by
the material increase in new bookings together with a reduced cost
base following the reorganisations in mid-2015 and early 2016 which
refocused the segment's sales and marketing activities.
New customer wins include Omron, Red Roof Inn, Lindex, EBSCO,
Data Communiqué, and several large US government contracts.
In the first half of 2016, we released continuous updates to our
portfolio of content management technologies - SDL Web, SDL
Knowledge Center, SDL Contenta Publishing Suite - focused on
usability, helping our clients master the complexity of managing
and delivering content, and building out strategic partnerships and
integrations. Key new product developments included:
- SDL Web updates to our cloud offering, an enhanced Digital
Experience Accelerator and a brand new eCommerce Framework enabling
interoperability with the larger digital marketing ecosystem, and
continued collaboration with the larger technical SDL Web
community.
- SDL Knowledge Center focused on improving content editor
capabilities and dynamic delivery scalability. Further, a new
partnership with SmartLogic builds upon last year's introduction of
3(rd) party taxonomy integration capability.
- SDL Contenta Publishing Suite now provides extended XML editor
support and added integration flexibility for logistics, learning
and training. Contenta now supports multiple content
configurations. LiveContent improved its dynamic viewing
capabilities. XPP enhanced productivity, automation and
typographic.
Non-Core businesses (contributing GBP13.3 million of revenue and
losses of GBP2.1 million PBTA) (2015: contributing GBP13.2 million
of revenue and losses of GBP2.1 million PBTA).
Our Non-Core businesses include our Fredhopper, Campaign &
Analytics and Social Intelligence businesses. We announced in
January 2016 our decision to dispose of these Non-Core businesses
and these processes are progressing.
Despite the announcement of the decision to divest these
businesses, the Non-Core businesses have traded slightly ahead of
management's expectations in the period. Revenue at GBP13.3m was up
1% and bookings were down 1% on the prior period.
One-off items
The Group has incurred GBP5.9 million of one-off items in the
period (2015: GBPnil). These costs relate to: redundancy and
retention costs associated with the Group's reorganisations in
mid-2015 and 2016; professional fees and related charges associated
with the operational review; corporate consolidation exercises
carried out in the period; and provision for one-off tax
liabilities.
Earnings Per Share
Basic earnings per share when adjusted for one-off items and
amortisation of intangibles ("adjusted EPS") increased by 13% to
9.11 pence (2015: 8.06 pence). The adjusted EPS for continuing
operations increased 10% to 12.10 pence (2015: 11.05 pence). Basic
earnings per share was 0.64 pence (2015: 4.76 pence).
Cash flow
The Group generated GBP6.4 million from operations after GBP5.9m
of cash payments on one-off items during the period (2015: GBP2.8
million).
Surplus cash, after deducting net income tax paid of GBP4.2
million (2015: GBP2.8 million) and investing activities of GBP1.0
million (2015: GBP1.3 million), has been used to reduce the Group's
bank borrowings by GBP2.9 million (GBP4.8 million repaid in period
with further drawdowns totalling GBP1.9 million outstanding at the
period end) and pay a dividend of GBP2.5 million (2015: GBP2.0
million).
As a result, net cash increased to GBP13.3 million at the period
end (2015: GBP8.2 million).
Foreign currency exchange impact
We are a global business and we operate in nearly 40 countries.
Our non-GBP revenues and costs are reasonably naturally hedged; we
estimate that the impact of foreign exchange movements in the
period was to increase revenues and costs by circa 4% against the
prior period.
Borrowing Facilities
The Group has a GBP25 million committed revolving credit
facility with HSBC plc, expiring in August 2020. The agreement also
includes a GBP25 million uncommitted Accordian facility. The Group
has undrawn committed borrowing of GBP23.1 million at 30 June
2016.
Taxation
SDL is a global business and, as such, the Group's effective tax
rate is heavily influenced by the territorial mix of operating
profits earned together with management judgement of the extent to
which the Group's tax losses are likely to be utilised with
reasonable certainty.
The tax charge for the period is GBP0.4 million (2015: GBP2.1
million). This charge includes tax credits associated with
amortisation, deferred tax and tax on one-off items. The reported
effective tax rate during the period was 44.6% (2015: 35.4%) as a
result of deferred tax charges for loss utilisation not being
offset by the recognition of new deferred tax assets in the period.
The effective tax rate for continuing operations before the impact
of amortisation is forecast to be 24%.
Dividend
A final dividend for the year ended 31 December 2015 of 3.1
pence per share was paid on 3 June 2016.
Dominic Lavelle
Chief Financial Officer
SDL plc
Interim Condensed Consolidated Income Statement
Unaudited 6 months Unaudited 6 months
to 30 June 2016 to 30 June 2015
Continuing Discontinued Total Continuing Discontinued Total
Notes GBPm GBPm GBPm GBPm GBPm GBPm
Sale of goods 19.4 10.8 30.2 18.3 10.5 28.8
Rendering
of services 101.0 2.5 103.5 102.4 2.7 105.1
----------- ------------- ------- ----------- ------------- -------
REVENUE 2 120.4 13.3 133.7 120.7 13.2 133.9
Cost of sales (55.4) (5.5) (60.9) (52.6) (5.2) (57.8)
----------- ------------- ------- ----------- ------------- -------
GROSS PROFIT 65.0 7.8 72.8 68.1 8.0 76.1
Administrative
expenses (60.1) (11.8) (71.9) (59.1) (10.9) (70.0)
----------- ------------- ------- ----------- ------------- -------
OPERATING
PROFIT/(LOSS) 3 4.9 (4.0) 0.9 9.0 (2.9) 6.1
OPERATING
PROFIT BEFORE
TAX, AMORTISATION
AND
ONE-OFF ITEMS 11.6 (2.1) 9.5 11.5 (2.1) 9.4
Amortisation
of intangible
assets (2.6) (0.1) (2.7) (2.5) (0.8) (3.3)
One-off items (4.1) (1.8) (5.9) - - -
----------- ------------- ------- -----------
4.9 (4.0) 0.9 9.0 (2.9) 6.1
--------------------- ------ ----------- ------------- ------- ----------- ------------- -------
Finance income - - - - - -
Finance costs - - - (0.1) - (0.1)
----------- ------------- ------- ----------- ------------- -------
PROFIT/(LOSS)
BEFORE TAX 4.9 (4.0) 0.9 8.9 (2.9) 6.0
--------------------- ------ ----------- ------------- ------- ----------- ------------- -------
PROFIT BEFORE
TAX, AMORTISATION
AND ONE-OFF
ITEMS 11.6 (2.1) 9.5 11.4 (2.1) 9.3
Amortisation
of intangible
assets (2.6) (0.1) (2.7) (2.5) (0.8) (3.3)
One-off items (4.1) (1.8) (5.9) - - -
----------- ------------- ------- ----------- ------------- -------
PROFIT/(LOSS)
BEFORE TAX 4.9 (4.0) 0.9 8.9 (2.9) 6.0
Tax expense 5 (0.4) - (0.4) (1.9) (0.2) (2.1)
PROFIT/(LOSS)
FOR THE PERIOD 4.5 (4.0) 0.5 7.0 (3.1) 3.9
----------- ------------- ------- ----------- ------------- -------
SDL plc
Interim Condensed Consolidated Income Statement (continued)
Unaudited Unaudited
6 months 6 months
to to
30 June 30 June
2016 2015
Pence Pence
Earnings per share
Earnings per ordinary share
- basic (pence) 0.64 4.76
Earnings per ordinary share
- diluted (pence) 0.63 4.71
Earnings per share - continuing
operations
Earnings per ordinary share
- basic (pence) 5.60 8.54
Earnings per ordinary share
- diluted (pence) 5.55 8.49
Earnings per share - discontinued
operations
Earnings per ordinary share
- basic (pence) (4.96) (3.78)
Earnings per ordinary share
- diluted (pence) (4.96) (3.78)
Adjusted earnings per ordinary share (basic and diluted) are
shown in note 6.
SDL plc
Interim Condensed Consolidated Statement of Comprehensive
Income
Unaudited Unaudited
6 months 6 months
to to
30 June 30 June
2016 2015
GBPm GBPm
Profit for the period 0.5 3.9
---------- ----------
Currency translation differences
on foreign operations 15.5 (12.5)
Currency translation differences
on foreign currency equity
loans to foreign subsidiaries (2.6) 3.1
Income tax charge on currency
translation differences on
foreign currency equity loans
to foreign subsidiaries (0.4) (0.7)
---------- ----------
Other Comprehensive Income/(Expense) 12.5 (10.1)
---------- ----------
Total Comprehensive Income/(Expense) 13.0 (6.2)
---------- ----------
Total Comprehensive Income/(Expense)
attributable to:
Continuing operations 20.2 (3.4)
Discontinued operations (7.2) (2.8)
Total Comprehensive Income/(Expense)
for the period 13.0 (6.2)
---------- ----------
All the total comprehensive income is attributable to equity
holders of the parent Company. A currency translation difference on
a foreign operation may be reclassified to the Income Statement
upon disposal of that operation.
SDL plc
Interim Condensed Consolidated Statement of Financial
Position
Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBPm GBPm GBPm
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 5.5 6.7 6.3
Intangible assets 146.8 194.3 163.1
Deferred income tax 4.3 5.2 6.0
Rent deposits 1.6 1.9 1.6
158.2 208.1 177.0
---------- ---------- -------------
CURRENT ASSETS
Trade and other receivables 68.8 67.0 73.4
Corporation tax 2.7 2.1 2.8
Cash and cash equivalents 15.1 11.2 17.2
Assets held for sale 30.6 - -
---------- ---------- -------------
117.2 80.3 93.4
---------- ---------- -------------
TOTAL ASSETS 275.4 288.4 270.4
---------- ---------- -------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (68.1) (76.0) (81.7)
Loans and overdraft - (3.0) -
Current tax liabilities (5.2) (7.3) (9.4)
Provisions (2.1) (2.2) (2.9)
Liabilities held for sale (15.4) - -
---------- ---------- -------------
(90.8) (88.5) (94.0)
---------- ---------- -------------
NON CURRENT LIABILITIES
Other payables (2.6) (0.8) (1.4)
Loans and overdraft (1.6) - (4.6)
Deferred tax liability (2.1) (3.7) (3.1)
Provisions (0.3) (0.6) (0.4)
---------- ---------- -------------
(6.6) (5.1) (9.5)
---------- ---------- -------------
TOTAL LIABILITIES (97.4) (93.6) (103.5)
---------- ---------- -------------
NET ASSETS 178.0 194.8 166.9
---------- ---------- -------------
EQUITY
Share capital 0.8 0.8 0.8
Share premium 98.8 98.5 98.5
Retained earnings 57.9 93.1 59.6
Translation reserve 20.5 2.4 8.0
---------- ---------- -------------
TOTAL EQUITY ATTRIBUTABLE
TO EQUITY HOLDERS OF THE
PARENT 178.0 194.8 166.9
---------- ---------- -------------
The Interim Financial Information presented in this Interim
Report was approved by the Board of Directors on 2(nd) August
2016.
SDL plc
Interim Condensed Consolidated Statement of Changes in
Equity
Share Share Retained
Capital Premium Earnings Translation Reserve Total
GBPm GBPm GBPm GBPm GBPm
At 31 December 2014
(audited) 0.8 97.9 90.9 12.5 202.1
Profit for the period - - 3.9 - 3.9
Other comprehensive income - - - (10.1) (10.1)
-------- -------- --------- ------------------- ------
Total comprehensive income - - 3.9 (10.1) (6.2)
Dividend Paid - - (2.0) - (2.0)
Arising on share issues* - 0.6 - - 0.6
Share-based payments* - - 0.3 - 0.3
-------- -------- --------- ------------------- ------
At 30 June 2015
(unaudited) 0.8 98.5 93.1 2.4 194.8
-------- -------- --------- ------------------- ------
Loss for the period - - (34.6) - (34.6)
Other comprehensive income - - - 5.6 5.6
-------- -------- --------- ------------------- ------
Total comprehensive income - - (34.6) 5.6 (29.0)
Deferred income taxation on share based payments* - - 0.1 - 0.1
Share-based payments* - - 1.0 - 1.0
-------- -------- --------- ------------------- ------
At 31 December 2015
(audited) 0.8 98.5 59.6 8.0 166.9
-------- -------- --------- ------------------- ------
Profit for the period - - 0.5 - 0.5
Other comprehensive income - - - 12.5 12.5
-------- -------- --------- ------------------- ------
Total comprehensive income - - 0.5 12.5 13.0
Dividend paid - - (2.5) - (2.5)
Arising on share issues* - 0.3 - - 0.3
Share-based payments* - - 0.3 - 0.3
-------- -------- --------- ------------------- ------
At 30 June 2016
(unaudited) 0.8 98.8 57.9 20.5 178.0
-------- -------- --------- ------------------- ------
*These amounts relate to transactions with owners of the Company
recognised directly in equity.
The amounts above are attributable to the equity of the parent
Company.
SDL plc
Interim Condensed Consolidated Statement of Cash Flows
Unaudited Unaudited
6 months 6 months
to to
30 June 30 June
2016 2015
GBPm GBPm
Profit before tax 0.9 6.0
Depreciation of property, plant
and equipment 1.8 1.7
Amortisation of intangible
assets 2.7 3.3
Finance costs - 0.1
Share-based payments 0.3 0.3
Decrease in trade and other
receivables 0.3 3.0
Increase / (decrease) in trade
and other payables and provisions 1.5 (8.7)
Exchange differences (1.1) (2.9)
---------- ----------
CASH GENERATED FROM OPERATIONS 6.4 2.8
Income tax paid (4.2) (2.8)
---------- ----------
NET CASH FLOWS GENERATED FROM
OPERATING ACTIVITIES 2.2 -
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to acquire property,
plant and equipment (1.0) (1.3)
Payment to acquire subsidiaries - (0.3)
---------- ----------
NET CASH FLOWS USED IN INVESTING
ACTIVITIES (1.0) (1.6)
---------- ----------
Unaudited Unaudited
6 months 6 months
to to
30 June 30 June
2016 2015
GBPm GBPm
FINANCING ACTIVITIES
Net proceeds from issue of
ordinary share capital 0.3 0.2
Proceeds from borrowings 1.9 -
Repayment of borrowings (4.8) (6.0)
Dividend paid on ordinary shares (2.5) (2.0)
Repayment of finance leases (0.2) (0.2)
Interest paid - (0.1)
NET CASH FLOWS USED IN FINANCING
ACTIVITIES (5.3) (8.1)
---------- ----------
DECREASE IN CASH AND CASH EQUIVALENTS (4.1) (9.7)
---------- ----------
MOVEMENT IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at
start of the period 17.2 22.1
Decrease in cash and cash equivalents (4.1) (9.7)
Effect of exchange rates on
cash and cash equivalents 2.1 (1.2)
Cash and cash equivalents at
end of the period 15.2 11.2
---------- ----------
The Group has elected to present a statement of cash flows that
analyses all cash flows in total. Amounts related to discontinued
operations are disclosed in Note 4 (A).
Unaudited Unaudited
6 months 6 months
to to
30 June 30 June
Analysis of cash and cash equivalents 2016 2015
at end of the period GBPm GBPm
Continuing operations 15.1 11.2
Assets held for sale 0.1 -
Total 15.2 11.2
---------- ----------
SDL plc
Notes to the Interim Condensed Consolidated Financial
Statements
1. Basis of preparation and accounting policies
Basis of preparation
The annual financial statements of the Group are prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the EU. The interim condensed consolidated financial
statements for the six months ended 30 June 2016 have been prepared
on a going concern basis in accordance with IAS 34 Interim
Financial Reporting.
As required by the Disclosure and Transparency Rules of the
Financial Conduct Authority, this condensed set of interim
financial statements has been prepared applying the accounting
policies and presentation that were applied in the preparation of
the Company's published consolidated financial statements for the
year ended 31 December 2015.
The preparation of condensed consolidated interim financial
statements in conformity with IFRSs requires management to make
judgements, estimates and assumptions that affect the application
of accounting policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances,
the results for which form the basis of making the judgements about
carrying values of assets and liabilities that are not readily
available from other sources. Actual results may differ from these
estimates.
The principal risks and uncertainties were disclosed in the
Group's annual report and financial statements for the year ended
31 December 2015 and remain broadly unchanged. SDL has an
established process both to manage risk and to seek to mitigate the
impact of risk as much as possible should it materialise.
Operational risks include management succession, system
interruption and business continuity, data protection, compliance,
contract management, integration of acquisitions, maintaining
technology leadership and intellectual property. Financial risks
include liquidity, counterparties, interest rates and financial
reporting.
Going Concern
In line with code requirements the Directors have made enquiries
concerning the potential of the business to continue as a going
concern. Enquiries included a review of performance in 2016, 2016
annual plans, a review of working capital including the liquidity
position and a review of current indebtedness levels. The Directors
confirm they have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. Given this expectation they have continued to
adopt the going concern basis in preparing the interim financial
statements.
2. Segment information
The Group operates in the global content management and language
translation software and services industry. For management
reporting purposes, the Group is organised into business units
based on the nature of their products and services. The Group has
four reportable operating segments as follows:
-- The Language Services segment is the provision of a
translation service for customers' multilingual content in multiple
languages.
-- The Language Technology segment is the sale of enterprise,
desktop and statistical machine translation technologies together
with associated consultancy and services.
-- The Global Content Technologies segment is content management
and knowledge management technologies together with associated
consultancy services.
-- The Non-Core Businesses segment includes the sale of campaign
management, social media monitoring and marketing analytic and
Fredhopper technologies together with associated consultancy and
services.
The Chief Operating Decision Maker monitors the operating
results of its business units separately for the purpose of making
decisions about resource allocation and performance assessment
prior to charges for tax and amortisation.
During the period, the Group has revised its cost allocation
methodologies such that only costs directly attributable to
discontinued operations are allocated to this latter segment. The
impact of this change has been to reallocate costs of GBP3.2
million from discontinued operations to the Language Services,
Language Technology and Global Content Technologies segments. In
accordance with IFRS8, the internal recharges for the comparative
period have been restated to provide consistent and meaningful
information.
Six months ended 30 June 2016 (unaudited)
Segment
profit
/(loss)
before
taxation,
External Internal Total Shared amortisation
Revenue Revenue Revenue Costs Depreciation and one-offs
GBPm GBPm GBPm GBPm GBPm GBPm
Continuing segments
Language Services 74.9 - 74.9 12.0 0.8 8.8
Language Technology 19.4 2.3 21.7 3.9 0.5 0.5
Global Content
Technologies 26.1 - 26.1 5.4 0.3 2.3
--------- --------- --------- ------- ------------- --------------
Total continuing
segments 120.4 2.3 122.7 21.3 1.6 11.6
--------- --------- --------- ------- ------------- --------------
Non-Core Business
- held for sale 13.3 - 13.3 1.1 0.2 (2.1)
------------- --------------
Total 133.7 2.3 136.0 22.4 1.8 9.5
--------- --------- --------- ------- ------------- --------------
Amortisation
& one-offs (8.6)
--------------
Profit before
taxation 0.9
==============
Six months ended 30 June 2015 (unaudited) - restated
Segment
profit
/ (loss)
before
taxation,
External Internal Total Shared amortisation
Revenue Revenue Revenue Costs Depreciation and one-offs
GBPm GBPm GBPm GBPm GBPm GBPm
Continuing segments
Language Services 76.1 - 76.1 13.2 0.6 15.1
Language Technology 17.9 1.5 19.4 4.5 0.5 0.5
Global Content
Technologies 26.7 - 26.7 6.8 0.3 (4.2)
--------- --------- --------- ------- ------------- --------------
Total continuing
segments 120.7 1.5 122.2 24.5 1.4 11.4
--------- --------- --------- ------- ------------- --------------
Non-Core Business
- held for sale 13.2 - 13.2 1.7 0.3 (2.1)
--------- --------- --------- ------- ------------- --------------
Total 133.9 1.5 135.4 26.2 1.7 9.3
--------- --------- --------- ------- ------------- --------------
Amortisation
& one-offs (3.3)
--------------
Profit before
taxation 6.0
==============
Revenue by geographical destination was as follows:
Unaudited Unaudited
6 months 6 months
to to
30 June 30 June
2016 2015
GBPm GBPm
United Kingdom 16.6 17.6
Rest of Europe 34.4 35.5
USA 49.5 43.7
Canada 6.5 5.8
Rest of the World 13.4 18.2
Discontinued operations 13.3 13.1
---------- ----------
133.7 133.9
---------- ----------
3. Operating profit
Unaudited 6 months Unaudited 6 months
to to
30 June 2016 30 June 2015
Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
Is stated after
charging / (crediting):
Research and development
expenditure 9.9 3.6 13.5 10.4 3.5 13.9
Bad debt charge 0.1 - 0.1 0.2 - 0.2
Depreciation of
owned assets 1.6 0.2 1.8 1.3 0.3 1.6
Depreciation of
leased assets - - - 0.1 - 0.1
Amortisation of
intangibles 2.6 0.1 2.7 2.5 0.8 3.3
Operating lease
rentals for plant
and machinery 0.1 - 0.1 0.1 - 0.1
Operating lease
rentals for land
and buildings 3.0 0.4 3.4 3.0 0.3 3.3
Net foreign exchange
differences (0.5) - (0.5) (3.0) - (3.0)
Share based payment
charge 0.8 - 0.8 0.5 - 0.5
----------- ------------- ------ ----------- ------------- ------
One-off items
Unaudited 6 months Unaudited 6 months
to to
30 June 2016 30 June 2015
Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
Redundancy and
other staff costs 1.7 1.4 3.1 - - -
Other one-off
items 2.4 0.4 2.8 - - -
----------- ------------- ------ ----------- ------------- ------
Total one-off
items 4.1 1.8 5.9 - - -
----------- ------------- ------ ----------- ------------- ------
One-off items relate to a number of non-recurring items that
arose during the period.
Following the completion of the Group's operational review, the
Group has reorganised its organisational structures. These actions
have led to non-recurring redundancy costs of GBP2.2 million being
incurred in the period. The Group also sought to retain key
employees during this time of change within the organisation and
hence retention packages have been provided to certain individuals.
A one-off charge of GBP0.9 million representing the time based cost
of these incentive packages has been recognised in the period and
further costs will be incurred in 2016 as the service periods
elapse. The total charge for non-recurring retention and staff
related costs in the year was GBP3.1 million.
Other one-off items relate to professional and related fees
associated with the Group's operational review, corporate
reorganisations carried out in 2016 and non-recurring indirect tax
liabilities.
These have been separately disclosed in the income statement to
provide a better guide to underlying business performance.
4. Discontinued operations
The board decided to sell the Non-Core Businesses early in 2016,
following a strategic decision to place greater focus on the
Group's key competencies, being Language Services, Language
Technology and Global Content Technologies. The Group is in the
process of selling its Non-Core Businesses and the disposals are
expected to complete in 2016.
The proceeds of disposal are expected to exceed the book value
of the related net assets and accordingly no impairment losses have
been recognised on classification of these operations as held for
sale. Any gain or loss on disposal will depend on the change in net
current assets arising from subsequent trading activities and the
final consideration.
The Non-Core Businesses segment was not previously classified as
held for sale or as a discontinued operation. In accordance with
IFRS 5 'Non-current assets held for sale and discontinued
operations', the disposal group has been classified as discontinued
and prior periods have been restated to show the discontinued
operation separately from continuing operations.
Disposal groups classified as held for sale are measured at the
lower of carrying amount and fair value less costs to sell. When an
operation is classified as a discontinued operation, the
comparative statement of comprehensive income is re-presented as if
the operation had been discontinued from the start of the
comparative period.
A. Cash flows from/(used in) discontinued operation
Unaudited Unaudited
6 months 6 months
to to
30 June 30 June
2016 2015
GBPm GBPm
Net cash from operating activities (1.7) (1.8)
Net cash used in investing activities - -
Net cash used in financing activities - -
---------- ----------
Net cash flows for the period (1.7) (1.8)
---------- ----------
B. Financial position of assets and liabilities held for sale
The assets and liabilities held for sale consist of:
GBPm
Assets
Property, plant and equipment 0.5
Intangible assets 25.4
Deferred income tax 0.3
Rent deposits 0.1
Trade and other receivables 4.1
Corporation tax 0.1
Cash and cash equivalents 0.1
-----
30.6
-----
Liabilities
Trade and other payables 15.1
Current tax liabilities 0.1
Provisions 0.2
15.4
-----
5. Taxation
Unaudited Unaudited
6 months 6 months
to to
30 June 30 June
2016 2015
GBPm GBPm
Total current taxation 0.4 2.8
---------- ----------
Deferred taxation:
Origination and reversal of
timing differences - (0.7)
Total deferred taxation - (0.7)
---------- ----------
Tax expense 0.4 2.1
---------- ----------
A tax charge in respect of foreign currency translation
differences on foreign currency loans to foreign subsidiaries of
GBP0.4m was recognised in the statement of other comprehensive
income in the six months to June 2016 (June 2015: GBP0.7m
charge)
A tax charge in respect of share based compensation for deferred
taxation of GBPnil (June 2015: GBP0.1m) has been recognised in the
statement of changes in equity in the period.
6. Earnings per share
Unaudited Unaudited
6 months 6 months
to to
30 June 30 June
2016 2015
GBPm GBPm
Profit for the period attributable
to equity holders of the parent 0.5 3.9
Number Number
Basic weighted average number
of shares (million) 81.3 81.0
Employee share options and
shares to be issued (million) 0.8 0.9
---------- ----------
Diluted weighted average number
of shares (million) 82.1 81.9
---------- ----------
Adjusted earnings per share:
Unaudited 6 months Unaudited 6 months
to 30 June 2016 to 30 June 2015
Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
Profit/(loss)
for the period
attributable
to equity holders
of the parent 4.5 (4.0) 0.5 7.0 (3.1) 3.9
One-off items
(including impairment
loss) 4.1 1.8 5.9 - - -
Amortisation
of intangible
fixed assets 2.6 0.1 2.7 2.5 0.8 3.3
Less: deferred
tax benefit
associated with
amortisation
of intangible
fixed assets (0.5) - (0.5) (0.5) (0.2) (0.7)
Tax benefit
associated with
one-off items (0.8) (0.3) (1.1) - - -
----------- ------------- ------ ----------- ------------- ------
Adjusted profit
for the period
attributable
to equity holders
of the parent 9.9 (2.4) 7.5 9.0 (2.5) 6.5
----------- ------------- ------ ----------- ------------- ------
Adjusted earnings per share is shown as the Directors believe
that earnings before amortisation and one-off items is reflective
of the underlying performance of the business.
Unaudited 6 months Unaudited 6 months
to 30 June 2016 to 30 June 2015
Continuing Discontinued Total Continuing Discontinued Total
Pence Pence Pence Pence Pence Pence
Adjusted earnings
per ordinary
share - basic
(pence) 12.10 (2.99) 9.11 11.05 (2.99) 8.06
Adjusted earnings
per ordinary
share - diluted
(pence) 11.98 (2.99) 9.02 10.96 (2.99) 7.97
7. Dividend per share
Dividends paid in the six months ending 30 June 2016 were
GBP2.5m (June 2015: GBP2.0m; December 2015: GBP2.0m). The dividend
paid in 2016 amounted to 3.1 pence per share.
8. Interest-bearing loans
During the period, the Group repaid GBP2.9 million. At 30 June
2016, the Group had a GBP25 million committed facility with HSBC
Bank Plc and had drawn down GBP1.9 million of the facility. The
Group also has a GBP25 million uncommitted accordion facility with
HSBC Bank Plc. These facilities expire on 2 August 2020.
9. Share-based compensation grants
On 8 June 2016, 904,893 Long Term Incentive Plan (LTIP) shares
and 457,500 stock options were awarded to certain key senior
executives and employees of the SDL Group. The exercise price of
the options was 419 pence, representing the mid-market price on the
day before grant.
10. General notes
The comparative figures for the financial year ended 31 December
2015 are not the Company's statutory accounts for that financial
year. Those accounts have been reported on by the Company's auditor
and delivered to the registrar of companies. The report of the
auditor was (i) unqualified, (ii) did not include a reference to
any matters to which the auditor drew attention by way of emphasis
without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006.
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
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU;
-- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
For and on behalf of the Board
Adolfo Hernandez
Chief Executive Officer
Dominic Lavelle
Chief Financial Officer
INDEPENDENT REVIEW REPORT TO SDL PLC
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2016 which comprises the Interim Condensed
Consolidated Income Statement, Interim Condensed Statement of
Comprehensive Income, Interim Condensed Consolidated Statement of
Financial Position, Interim Condensed Consolidated Statement of
Changes in Equity, Interim Condensed Consolidated Statement of Cash
Flows and the related explanatory notes. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the Disclosure and Transparency Rules ("the DTR")
of the UK's Financial Conduct Authority ("the UK FCA"). Our review
has been undertaken so that we might state to the company those
matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company
for our review work, for this report, or for the conclusions we
have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
The annual financial statements of the group are prepared in
accordance with IFRSs as adopted by the EU. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2016 is not prepared, in all material respects, in accordance
with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Simon Haydn-Jones (Senior Statutory Auditor)
For and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London
E14 5GL
2(nd) August 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSUEFFFMSEFA
(END) Dow Jones Newswires
August 02, 2016 02:01 ET (06:01 GMT)
Sdl (LSE:SDL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Sdl (LSE:SDL)
Historical Stock Chart
From Jul 2023 to Jul 2024
