SDL issues full year profit warning

18th Jun 2013 07:08

Shares of translation and communications software firm SDL plummeted after the group lowered its outlook for the current financial year following a weaker than expected first half performance.The FTSE 250-listed company said profit before tax and amortisation for the year is now expected to be within the range £15-20m in 2013 compared to £35.5m in 2012.In its Technology division, first half licence revenues were below management expectations, mostly due to a lack of sales and marketing investment over the last two years, it explained.The poor macroeconomic climate hurt sales at its Language Services in the first half of 2013. Interim revenue is expected to be below management expectations, as customers reduce their volumes and following pricing pressure, it said."Although the performance in our technology and services businesses has been below budget for the first five months of 2013, the build in pipeline for both services and technology with just 1-2 months of our sales and marketing investments in place gives the Board confidence that sales will improve," the group said in a company statement. "However, the Board is taking a more cautious view of the speed of services volume recovery and licence sales growth. We are seeing very positive market feedback on our technology stack and are encouraged with pipeline increases in our technology as a result of our marketing and sales investments."Chief Executive Officer, Mark Lancaster, said: "The necessary investments are being made to deliver our technology products and services into the Customer Experience Management market.""As a consequence the business has incurred an increased short term impact to profits. These investments are important to deliver long-term growth and profitability. We remain confident in our strategy and in the outlook for the business in the long term," he said.Shares of SDL plunged 34.15% to 254.60p in London following the trading update. CJ