SDL plc (LON:SDL) issues profit warning.
SDL (LSE: SDL) suffered a cut in its share price this morning by more than a third, falling over 125p as it announced a profit warning for the full year.
The global customer experience management company revealed that it has lowered its outlook for the 2013 financial year to between £15-20m, significantly lower than 2012's £35.5m.
The FTSE 250-listed company has seen poor performance in the first half, with licence revenues across its Technology segments below management's expectations, "primarily due to previously highlighted lack of sales and marketing investment over the last two years".
Elsewhere, SDL's Language Services division has also underperformed, with management blaming "the poor macroeconomic climate, resulting in our repeat customers reducing their volumes, and to a less extent, increased pricing pressure".
While this morning's announcement was taken as a necessary measure, the board remains confident that sales will improve and stated that they 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 commented:
"We have achieved our ambitious Sales and marketing recruitment milestones. This has resulted in us building a stronger pipeline, which is expected to produce returns in the second half. Whilst we did not plan for investments to deliver revenue in the first half, we expected greater momentum from last year to carry into the first half of 2013.
"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."
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> Sam does not own shares in SDL.