- Release Date: 08/07/13 18:52
- Summary: FORECAST: SDL: SDL - Trading Update, FY2014 Outlook and Bank Covenants
- Price Sensitive: No
- Download Document 3.83KB
SDL 08/07/2013 16:52 FORECAST REL: 1652 HRS Solution Dynamics Limited FORECAST: SDL: SDL - Trading Update, FY2014 Outlook and Bank Covenants Trading Update Trading during the second half of FY2013 has been largely to plan and the company expects to record close to a breakeven result for the year, subject to any amendments during the audit process and also before the likely need to provision for an outstanding debt owed by a European distributor. At 30 June that outstanding debt amounted to around $152,000 although in the last two months the distributor has commenced a programme to repay the arrears. While there is no certainty, the directors have reasonable expectations for believing that the debt will, in time, be recovered in full. In spite of the general continuing decline in traditional mail volumes the Services division slightly increased its mail lodgement volume over last year, assisted both by a large IPO and volume growth within new and existing clients. The Software division saw little in the way of new, one-off licence revenue generated although annuity revenue continues to steadily build via the SaaS (Software as a Service) offering. Outlook for FY2014 SDL's budget outlook for FY2014 is for a return to profit and the directors have approved a base budget for net profit in excess of $250,000. There are several reasons for a more optimistic view in the coming financial year. First, SDL will see a full year's benefit from the cost cutting undertaken at mid-year. This amounted to around $600,000 on an annualised basis and has meant the business should now be capable of sustained profitability, even in the absence of one-off licence revenues. Secondly, the company has recently secured additional Services business in its traditional mail house offering, including two sizeable wins in the consumer-related space. Additionally another of SDL's larger clients has flagged the likelihood of business expansion potentially doubling their throughput to SDL. These gains are expected to comfortably offset the inevitable mail volume decline. Additionally the company has a healthy new business tender pipeline which it is aggressively pursuing. Thirdly, the Software division has broadened its distribution channels. This includes reinitiating its relationship with Australian distributor FUJIFILM Australia, which will see SDL receive maintenance and support income plus a share of any revenue that FUJIFILM generates from SDL software (the parties have signed a heads of agreement which is in the process of being formalised). The company has also revised or added reseller arrangements in the Czech Republic and the UK, with the latter sharing some of SDL's UK costs and already producing new revenue. The FY2014 outlook comes with the caveats that competition in the mail house market remains intense, macroeconomic conditions remain challenging in most of SDL's markets and big ticket software licence sales are difficult to predict and close in such an environment. Nevertheless, the company's lower cost base coupled with steady new business gains provide a reasonable degree of confidence that improved profitability is now achievable. Bank Covenant Compliance SDL confirms it is back in compliance with all its banking covenants and that any doubtful debt provisioning required for FY2013 accounts will not cause further compliance breach. The company finished FY2013 with closing net debt of approximately $160,000 (subject to final audit), a significant improvement of the prior year. Based on the FY2014 outlook noted above, SDL does not expect any further compliance breaches and is progressively reducing its facility limit and debt levels. For further information, please contact: John McMahon / Nelson Siva Chairman / Chief Executive Officer +61-410-411 806 / +64-21-415 027 End CA:00238326 For:SDL Type:FORECAST Time:2013-07-08 16:52:49
- Forums
- NZX - By Stock
- Ann: FORECAST: SDL: SDL - Trading Update, FY2014
Ann: FORECAST: SDL: SDL - Trading Update, FY2014
Featured News
Add SDL (NZSX) to my watchlist
|
|||||
Last
$1.20 |
Change
0.000(0.00%) |
Mkt cap ! n/a |
Open | High | Low | Value | Volume |
0.0¢ | 0.0¢ | 0.0¢ | $0 | 0 |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
0 | 126 | $1.21 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$1.29 | 775 | 0 |
Last trade - 13.30pm 10/09/2024 (20 minute delay) ? |
Featured News
SDL (NZSX) Chart |
Day chart unavailable