TIDMRWS
RNS Number : 8530L
RWS Holdings PLC
24 April 2018
24 April 2018
RWS Holdings plc
Half Year Trading Statement
RWS Holdings plc ("RWS", "the Group"), one of the world's
leading language, intellectual property support services and
localisation providers, today provides an update on trading for the
half year ended 31 March 2018 ("the first half"), ahead of the
announcement of its half year results on 7 June 2018.
Trading & Financial Update
RWS has performed well during the first half, albeit has faced
significant exchange rate headwinds as flagged in our AGM statement
in February 2018.
Notwithstanding these headwinds, the business has achieved
revenues of GBP139.6 million for the first half, compared to
GBP76.6 million in the first half of 2017, broadly in line with our
expectations. The Group expects to achieve Adjusted PBT of at least
GBP30.0 million in the first half on a constant currency basis,
broadly in line with our expectations for the full year which
continue to anticipate a second half weighting. However, the
average exchange rate for the first half was $1.37: GBP1, compared
to an average of $1.24: GBP1 during the prior year, meaning that we
expect the Group to achieve Adjusted PBT of at least GBP28.3
million including the currency effect. The Board will continue to
monitor exchange rates over the remainder of the year. However, if
the current rates prevail, we would expect a profit outcome
slightly below market consensus.
This first half saw a steady performance from our Patent
Translation & Filing division, following its record performance
in 2017, reflecting a strong contribution from our Worldfile
product offering and good growth in our Chinese operations. Patent
Information continued to perform well (+11%*) and Language
Solutions has seen the benefits of last year's restructuring
(+11%*).
We also saw an excellent first half from our Life Sciences
division (+9%*). The successful integration of our two US
acquisitions in the space, LUZ (acquired in February 2017) and CTi
(acquired in November 2015), has delivered very positive results
and enabled the division to grow revenue with several key
customers.
Our acquisition of Moravia, which completed in November 2017 for
a cash consideration of US$320 million, has brought the Group a
leading European provider of technology-enabled localisation
services to some of the largest technology companies in the world.
The acquisition enhances RWS's global presence, adding operations
in the Czech Republic, USA, Japan, China, Argentina and Ireland;
provides further geographic diversification; and adds an additional
profitable, cash generative division of scale to the Group.
Since acquisition, Moravia has continued to grow its
relationships with its existing major technology clients; however,
with over 95% of its revenue in USD and the majority of the cost
base in Euro/CZK, the business has seen foreign exchange headwinds.
In addition, its performance has been held back by a lower volume
of activity than expected from a few clients. Despite this, we are
encouraged by Moravia's first half client wins and its pipeline of
new opportunities. The integration process is proceeding well and,
in particular, a higher level of synergies has been identified
which will deliver additional annualised cost savings.
Following the recent US Tax Reform legislation, we anticipate
that the reduction in the Federal tax rate from 35% to 21% will
mean a lower than previously expected effective tax rate of c.23%
in the current financial year, settling at approximately 21% from
2019 onwards, resulting in a beneficial impact on earnings per
share calculations and cash generation.
The Group has continued to strengthen its financial position
with shareholder funds expected to be approximately GBP323 million
at 31 March 2018. As at 31 March 2018, net debt (which is mainly
denominated in US dollars) was lower than anticipated at GBP84
million, benefiting from the weaker US dollar. Strong cash
generation continues to underpin the Group's progressive dividend
policy.
Andrew Brode, Chairman of RWS, commented:
"Notwithstanding the foreign exchange headwinds, we have seen
strong performances from several of our divisions. We are also
already realising the benefits of synergies and cross-selling
across our successfully integrated Life Sciences activities, which
are now able to provide a full-service offering to their clients.
The further integration work of Moravia's Life Science business
into RWS is well underway and will be completed by 30 September
2018.
"Following the recent acquisition of Moravia, the Group now
operates from five clear divisions and we are seeing good momentum
and a strong sales pipeline going into the second half. While FX
may continue to have an impact, we expect to make continued
underlying progress in both revenues and profits over the second
half of the year."
* Indicates on a like for like basis, excluding impact of
foreign exchange and acquisitions
ENDS
For further information, contact:
RWS Holdings plc
Andrew Brode, Chairman 01753 480200
Richard Thompson, Chief Executive Officer
MHP
Katie Hunt / Simon Hockridge 0203 128 8100
Numis
Stuart Skinner / Kevin Cruickshank (Nominated Adviser) 0207 260 1000
Michael Burke (Corporate Broker)
About RWS
RWS is the world's leading provider of intellectual property
support services (patent translations, international patent filing
solutions and searches), a market leader in life sciences
translations and linguistic validation, a leading localisation
provider, and a high level specialist language service provider in
other technical areas, providing for the diverse needs of a
blue-chip multinational client base from Europe, North America and
Asia. RWS is based in the UK, with offices in Europe, the USA,
China, Japan, Latin America and Australia, and is listed on AIM,
the London Stock Exchange regulated market (RWS.L).
For further information, please visit: www.rws.com
This announcement contains inside information, which is
disclosed in accordance with the Market Abuse Regulation, which
came into effect on 3 July 2016.
Forward-Looking Statements
This announcement contains certain statements that are
forward-looking statements. They appear in a number of places
through this announcement and include statements regarding our
intentions, beliefs or current expectations and those of our
officers, directors and employees concerning, amongst other things,
our results of operations, financial condition, liquidity,
prospects, growth, strategies and the business we operate. By their
nature, these statements involve uncertainty since future events
and circumstances can cause results and developments to differ
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this document and, unless otherwise required by
applicable law, the Company undertakes no obligation to update or
review these forward-looking statements. Nothing in this
announcement should be construed as a profit forecast. The Company
and its directors accept no liability to third parties in respect
of this document save as would arise under English law.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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