SDL's profits fall but continuing operations show strong growth

Language services firm SDL on Monday reported a fall in annual profit after selling off a number of underperforming businesses in the prior year.

In its unaudited results for the six months ended 30 June, the company achieved a pretax profit of £7.8m, down 63% from the total amount in the same period last year due to firm’s £20.6m profit on sale of businesses in 2017.

Conversely, pretax profit from continuing operations rose by 30% as revenue from continuing operations increased by 2.8% to £143.1m.

Adolfo Hernandez, chief executive of SDL, said: "Importantly, we have been able to balance underlying operational progress, on-boarding customers onto our Helix platform, the evolution of our go-to-market strategy and investment in innovation with good financial results showing revenue growth, gross margin expansion and cost discipline."

The AIM traded company has also completed the acquisition of Donnelley Language Services for $77.5m on 22 July, in a move that SDL said will provide it with greater exposure to the premium growth verticals and creates significant opportunity for revenue and cost efficiencies.

In a statement, the company said it expected the acquisition to be earnings accretive in 2019.

"The acquisition of Donnelley Language Solutions accelerates parts of our premium services strategy and provides the opportunity to apply the same operational improvement initiatives to the acquired business over time. The outlook for the full year is in line with management expectations," said Hernandez.

SDL’s shares were up 1.58% at 514.00p at 1649 BST.