Solution Dynamics Limited

Overview

Solution Dynamics Limited operates in the Customer Communications market (essential mail, interactive marketing communications and on-demand communications). The Company's products and services are represented by two revenue streams:

• Services, includes digital print and mail house processing for mail items such as invoices, statements and promotional material.
• Software & Technology, develops and markets SDL's own software products related to marketing communications, document archiving, document composition and desktop mail solutions.

Solution Dynamics Limited was formed in November 2001 and had its origins in a company called Marketing Data Services Ltd, which was established in 1996. It is listed on NZAX since July 2004 under the code of "SDL". The company has successfully completed a Renounceable Rights Issue in 2011.

Performance

The following information was extracted from Solution Dynamics Limited's full year results, released 27 August 2026

Solution Dynamics Limited (“SDL” or “Company”) recorded a net profit after tax of $0.38 million for FY2026 (FY2025 $2.62 million). FY2026 earnings per share was 2.7 cents (FY2025 17.8 cents). The two main factors that accounted for the decrease were the loss of a major customer contract during FY2025, plus the development and launch costs for SDL’s new product, nGAGE, initially aimed at the UK dental market.

The Company’s revenue declined to $31.4 million (down 24.0% from $41.3 million). The reduction was primarily in Software & Technology, although, predictably for its market segment, mail house print also came under pressure, partly offset by an increase in low-margin postage revenue. Pleasingly, revenue from the top ten customers increased by 11% excluding postage, reflecting a mix of both digital and print growth. Digital revenue increased 4% year on year, a product of some client onboarding in this segment, though also indicating continued overall customer migration from print and mail to digital channels.

Domestic print and mail house operations continue to operate within a declining market, exacerbated by ongoing significant postage price increases from NZ Post that are incentivising customers to move further to digital communications. Importantly in this segment, SDL has gained additional work from key accounts in the local authority sector and expects to gain additional volumes from a number of new council owned water entities that are now required to operate as stand-alone operations with separate billing.

International business saw revenue reduction, primarily from the full effect of the loss of a material client in FY25; this was a key factor in Software & Technology revenue reducing 44.0% to $13.5 million. SDL’s new nGAGE product, which commenced as a project in August 2025, continues to see focus and resource applied to bring a suite of enhanced digital products to market in the immediate term, but due to its position in the development cycle, saw minimal revenue for FY2026. The North American marketing services operation, also added during FY25, saw slightly lower than expected revenue and was a modest drag on earnings for the year.

Importantly, to ensure expenses are right sized to the effects of the markets in which the company operates, significant cost restructuring was undertaken over FY2025 (mainly in 2H) which saw Selling, General & Administration (SG&A) costs fall by 23.8% in FY2026. This decline is net of adding additional resources in the UK to develop and launch nGAGE. Earnings before interest, tax, depreciation and amortisation (“EBITDA”) declined 74.5% to $1.13 million (FY2025 $4.45 million). Gross Profit was 39.5% lower, with the fall partly offset by a general price increase across most New Zealand customers at the start of FY2026.