Language software outfit SDL shares drop on legal warning

SHARES in British translation software firm SDL plummeted yesterday as the firm counted the cost of a lawsuit resulting from its 2005 acquisition of Trados.

SDL said litigation from a former Trados shareholder could cost the firm up to $3m (£1.9m). The announcement, along with a host of City analyst downgrades, sent SDL’s share price down 15 per cent yesterday.

The firm also said that trading had been “broadly in line with management expectations” in the three months to October.

“That often translates to ‘not quite’ in line,” Panmure Gordon’s George O’Connor said.

SDL said most of its growth had come from its language services arm, while its technology division, which develops and sells other software “continued to be suppressed”.

The company called the lawsuit from the Trados shareholder “minor” and said the board “believes the case to be completely without merit”. It expects to bear the $1-3m cost of the case next year.

On a more positive note, SDL said that January’s £70m acquisition of marketing software firm Alterian was starting to pay off, with the business performing “ahead of expectations”.