Shares dove over 25% with the announcement some deals may not close by year-end, impacting performance.
Companies: RWS Holdings plc
Content management and language software group SDL (LON: SDL) has warned investors today that the Group is reliant on the closure of software deals by December 31st in order to reach current full-year expectations.
The stock tumbled on Friday morning with the announcement:
"If these deals are not closed, Adjusted EBITA1 for 2017 on a like-for-like2 basis will be below current market expectations. The Group has also experienced a faster than forecast shift from perpetual licence sales to Software-as-a-Service (SaaS) sales. This has resulted in higher costs recognised in the year, with revenues deferred into future years."
It also warned of a £3.5m exceptional charge in FY17 and a "slightly lower charge in 2018" as it looks to optimise its operating model.
Management also flagged further investment...
"...to accelerate the development of our cloud-based, AI-powered Content Globalisation platform. Some of the core features of this platform, such as Machine Learning, will be, we believe, disruptive and industry-leading."
25% of the Group's share price was wiped off immediately after trading opened on Friday, reaching a three-year low of 345p.
Prior to today's warning consensus forecast the Group to report a Net Profit in FY17, its first in a number of years after reporting Net Losses of £31m and £18m in FY15 and FY16 respectively.
