(Alliance News) - SDL PLC on Tuesday said its profit was modestly higher in the first half of 2020, helped by lower administrative expenses and cost of sales.
Shares in SDL were up 18% at 550.00 pence in London in late morning trading.
The language software firm, headquartered in Maidenhead, reported a GBP11.7 million pretax profit for the six months ended June 30, up 7.3% from GBP10.9 million the year before.
Although revenue was a little lower, down 1.0% at GBP180.7 million from GBP182.5 million, the reduced cost of sales meant that gross profit was very slightly higher at GBP94.4 million from GBP94.0.
With the reduction in administrative expenses to GBP81.0 million from GBP82.1 million, operating profit ended up being 13% higher at GBP13.4 million compared to GP11.9 million previously.
SDL said it was on course to make cost reductions against an GBP8 million budget, as reported in its 2019 results. During the pandemic, its operations have been "carefully managed" and no staff have been furloughed so for. Its net cash currently stands at around GBP45 million.
The firm's pipeline for the second half of 2020 is "good", and this is usually is stronger period. However, SDL "remains alert to risks to customer spending and delays to sales cycles and decision-making" in light of the pandemic.
The firms suspended its dividend in April and will consider reinstating dividend payments alongside its annual 2020 results.
Chief Executive Adolfo Hernandez said: "In challenging circumstances, we are pleased with the Group's performance in the first half of the year. Crucially, we were able to enact our business continuity plans swiftly, moving the entire global workforce to working-from-home over a matter of weeks. As a result, there was no material disruption in our ability to service customers nor to our productivity. SDL remains operationally resilient and well-capitalised, and its core strategic plans remain on track.
"Looking to the second half, which is traditionally our stronger period, although our pipeline is good, Covid-19 continues to present a risk to trading patterns and software sales cycles. However, we believe that the group is positioned to take advantage of the expected recovery in the global economy post Covid-19."
By Anna Farley; annafarley@alliancenews.com
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