RWS Holdings plc - Year End Trading Statement
25 October 2016 - 9:00PM
Business Wire
RWS Holdings plc ("RWS", "the Group"), the world's leading
provider of intellectual property support services (patent
translations, international patent filing solutions and searches),
commercial translations and linguistic validation, today provides
an update on trading for the year ended 30 September 2016, ahead of
the announcement of its full year results, which is expected on 6
December 2016.
Trading & Financial Update
RWS has enjoyed its best year ever and the Board expects Group
revenues to be not less than £122 million compared to £95.2 million
in 2015, an increase of at least 28%. This strong performance has
been driven by the core translations activities, an excellent
eleven-month contribution from Corporate Translations Inc. (”CTi”),
the newly acquired specialist in life sciences translation and
linguistic validation, and an improving currency environment.
Adjusted profit before tax (before amortisation of intangibles,
share option costs and exceptional CTi acquisition costs) is
expected to be not less than £30.5 million (2015: £22.7 million),
an increase of 34%, reflecting the benefits of improved gross
margins, the CTi acquisition and currency tailwinds. The core
translation business has made significant progress; PatBase
continues to perform well, growing by a further 7%; and China,
Japan and Switzerland delivered strong performances.
The Group announced the acquisition of CTi, based in
Connecticut, USA, on 2 November 2015. CTi is the world’s leading
translation company focussing entirely upon life sciences
translation and linguistic validation. As highlighted at the half
year, the Group’s UK life sciences activities have been integrated
into CTi to form a larger unit with production sites across
continents to expand its market leading position with major
pharmaceutical groups and contract research organisations in
Europe. We were delighted to announce in early September that
Sheena Dempsey had been appointed as Chief Executive Officer of
CTi, following the departure of the CTi vendors after a hand-over
period. Sheena brings a wealth of experience and knowledge of the
life sciences space.
This year has been marked by considerable volatility in global
currency markets. This was compounded in the aftermath of the EU
referendum in late June and the Group has benefited from the
resulting decline in Sterling given that over 80% of its revenues
are non-Sterling. We have now hedged our estimated net exposure to
the Euro at an average rate of 1 Euro = 83p for the year to 30
September 2017. The average rate experienced across 2015 – 16 was
78.1p.
The Group’s financial position has continued to strengthen with
shareholder funds expected to be approximately £107 million. The
Group raised a five-year term loan of US$45 million to part fund
the CTi acquisition but, as a result of the Group’s strong cash
generation, net debt has been reduced to £1.5 million as at 30
September 2016. The directors anticipate that RWS’ strong finances
will underpin both its current acquisition strategy as well as its
progressive dividend policy; the final dividend will be payable to
shareholders in February 2017.
Andrew Brode, Chairman of RWS, commented on outlook:
"RWS has performed exceptionally well despite a low-growth world
economic environment, and we are delighted with the performance of
our latest acquisition, CTi.
“Following the CTi acquisition, we have a broader base of market
leading businesses from which we intend to expand profitably,
particularly in life sciences, and we are encouraged by the
opportunities we are seeing across the business.
“Our strong cash generation and resultant financial position
leave us well placed to continue to selectively review a healthy
pipeline of potential acquisitions as well as continuing our
progressive dividend policy.”
About RWS:
RWS is the world's leading provider of patent translations and
one of the leading players in the provision of intellectual
property support services and a market leader in Life Sciences
translations and linguistic validation as well as 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 (New York, Connecticut and
Chicago), China, Japan and Australia, and is listed on AIM, the
London Stock Exchange regulated market (RWS.L).
For further information please visit: www.rws.com
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Chris Rayner, +44 (0) 203 370 4977chris.rayner@rws.com
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