SDL, provider of translation solutions and web content management software, returned to strong organic growth last year. The self-styled ‘Global Information Management solutions’ company revealed that 2010 revenue is 18% up on the previous year (of which only 4% was acquisition related with negligible currency impact) at £203.5m and PBT climbed 20% to £28.8m, a margin of over 14%.
All three of SDL’s divisions performed well: Content Management Technologies’ revenue increased by 36% (16% due to acquisition) to £45m thanks to strong cross-selling with the rest of the group; Language Technologies grew by 17% (9% organically) to £34m and the largest division, Language Services, reported organic revenue growth of 14% to £124.6m.
But a closer examination of the results by geography shows that the US (revenue +67% to £52m), Rest of World (+48% to £24m), Netherlands (+35% to £16m) and Canada (+20% to £13m) are driving the growth. The picture is not so rosy in the UK and Ireland, where revenue declined by 6% (to £48.5m) and 5% (to £21.3m), respectively. It seems SDL is another example of a UK-based software company relying on its international business for growth.
As a Group, however, SDL has a lot to be pleased about. 2010 saw the successful integration of two strategic acquisitions (Language Weaver and Xopus); four new product launches and a string of new customers including Fidelity Investments, Saab, United Airlines and AstraZeneca. Moreover, a cash pile of almost £47m and no external debt have given it the confidence to recommend a maiden dividend of 5.5p per share. The cash could also be used for further acquisitions in the year ahead, a year in which new CEO John Hunter is confident of further “good growth” following positive initial trading in 2011.