The board of directors of Babylon Ltd. (TASE:BBYL) has approved a new dividend policy to distribute at least half of the online translation company's net profit as a dividend. Dividends will be distributed at the discretion of the board of directors and subject to the company meeting its financial commitments to third parties, the amount of its cash reserves, and financing needs.
Babylon has two core businesses: software, which accounts for 85% of its revenue, and online marketing and advertising, which accounts for 15% of its revenue.
Babylon CEO Alon Carmeli said, "The company's business model has matured. It has steady profits and growing cash flow. The board of directors therefore adopted a policy of distributing a fixed dividend over time to the benefit of investors."
Babylon also launched the latest version of its translation software, Babylon 9. The company estimates that revenue from upgrades to the new version will boost its 2011 operating profit to NIS 5 million.
"Expanding the areas of the company's business to social networks, and the launch of a translation community that crosses borders and languages, alongside agreements with global search giants, such as Google, will soon increase the company's sources of revenue," said Carmeli.
Babylon's share price rose 2.6% by midday to NIS 6.23, giving a market cap of NIS 263 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 26, 2011
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