Portfolio

Exchange rates 'unhelpful' for RWS Holdings in new financial year

By Josh White

Date: Tuesday 10 Dec 2019

Exchange rates 'unhelpful' for RWS Holdings in new financial year

(Sharecast News) - RWS Holdings reported record performances across all three of its main businesses in its results for the year on Tuesday, with its revenue rising 16% year-on-year to £355.7m.
The AIM-traded language, intellectual property support and localisation provider said its adjusted operating profit was up 18% at £78.4m for the year ended 30 September, as its adjusted profit before tax was 20% firmer at £74.2m.

Its reported profit before tax rose 45% to £57.7m.

The company said its adjusted earnings per share were 22% higher at 21.3p, as its basic earnings per share leapt 59% to 16.5p.

Its board proposed a final dividend of 7p, up 17%, making for a 17% improvement in the total dividend for the year of 8.75p.

At year-end, RWS Holdings had net debt of £36.8m, which was 43% lower than it was a year earlier.

On the operational front, the firm said it experienced growth in sales and profits across all three main divisions.

Its language solutions unit acquired specialist legal translations provider Alpha Translations Canada during the period, as the firm opened its new Moravia head office in Brno, Czech Republic.

At RWS Moravia, the company reported record revenues of £149.9m, up from £126.9m year-on-year, as its adjusted operating profit growth reached a record 52% to £25.7m.

The company said that, as a "leading provider" of technology-enabled localisation services, the business had consistently focussed on developing, innovating and investing in its services to drive future growth both from existing customers, which included many of the largest technology companies, and from an increasing cadre of new clients.

In its RWS IP Services unit, it reported "strong" growth in revenues, which were up 12% to £125.2m as driven by the Eurofile and Worldfile divisions.

The board described "excellent" performance in the Asia-Pacific region, which it said would be a key area of focus for growth in future years.

It also made investment across its departments to enable more efficient management of increasing volumes of business, and said its adjusted operating profit was up to £36.1m from £34.4m year-on-year.

At RWS Life Sciences, the company saw its highest divisional growth in revenues at 25%, advancing to £65.5m.

That, it said, was driven by growth in linguistic validation services and the transfer of Moravia Life Science clients from 1 October.

Adjusted operating profit there increased to £20.3m from £14.5m.

Looking ahead, RWS said underlying performance in the first two months of the current financial year had been in line with the board's expectations, although it noted that the "sharp increase" in the sterling-dollar exchange rate was "clearly unhelpful".

It said it had an "excellent pipeline" of new clients in IP Services.

The board added that, with all of its integration plans now executed, the company was "well-positioned" to convert a wide range of sales opportunities across its full suite of services and technology platforms.

"This has been another remarkable year for the group, delivering our 16th year of unbroken growth in revenues, profits and dividends since flotation in November 2003," said chairman Andrew Brode.

"We were delighted that RWS was named Company of the Year at the recent AIM Awards and that our three main divisions delivered record performances.

"We also strengthened our specialist legal and financial translation offering through the acquisition of Alpha Translations Canada."

Brode said the group had now consolidated its position as one of the world's leading providers of language services, and was taking advantage of the opportunities provided by its service offerings, client base, global presence and the demand for its specialist intellectual property, life sciences and localisation services.

"Our strong balance sheet also ensures that we remain well positioned in the pursuit of further acquisition opportunities.

"We look forward with confidence to achieving further progress in 2020."

At 1023 GMT, shares in RWS Holdings were down 5.97% at 630p.

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