RWS Holdings Plc - Half Year Report

RWS Holdings plc

Half Year Report for the Six Months to 31 March 2019

An excellent first half with double-digit organic profit growth

RWS Holdings plc, one of the world's leading language, intellectual property support services and localization providers, today announces its half year results for the six months ended 31 March 2019.

 

Financial highlights

 

H1 2019

H1 2018

Change

Revenue

£172.3m

£139.6m

+23%

 

Adjusted profit before tax1

£35.6m

£28.6m

+24%

Reported profit before tax

£27.6m

£18.3m

+51%

 

 

 

 

Adjusted earnings per share

10.1p

8.2p

+23%

Basic earnings per share

7.8p

4.7p

+66%

 

 

 

 

Interim dividend

1.75p

1.5p

+17%

 

 

 

 

Net debt

£63.9m

£82.8m

-23%

·    Strong underlying organic growth with revenue up 10% and adjusted profit before tax up 18% on a constant currency basis, excluding impact of acquisitions.

 

Operating highlights

·     Margin more than doubled at RWS Moravia reflecting:

o  revenues up 10%2 driven by growing demand for higher value localization services from several of RWS Moravia's top technology clients

o  favourable exchange rates

o  full year benefit of previous year's organizational review at RWS Moravia resulting in improved operational efficiency and tighter overhead control

·     Strong overall revenue growth for RWS IP Services (+13%2), including APAC region, an area of key focus for the business

·     RWS Life Sciences had a good first half (+6%2) with excellent revenue growth (+26%2) from its specialist, high value linguistic validation offering

·     Acquisition of Alpha Translations Canada Inc., strengthening our existing specialist legal and financial translation services

·     Strong cash generation of £27.4m (H1 2018: £24.3m) supported a substantial reduction in net debt, the US$6.0m acquisition of Alpha Translations Canada Inc. and a 17% growth in interim dividend

 

 

1 RWS uses adjusted results as key performance indicators as the Directors believe that these provide a more consistent measure of operating performance by adjusting for acquisition related charges and significant one-off or non-cash items. Adjusted profit before tax is stated before amortization of acquired intangibles and acquisition costs.

2 Indicates on a like-for-like basis, excluding impact of foreign exchange.

 

Current trading and outlook

·     Trading performance since the period end has been in line with market expectations, which were upgraded at the time of our trading update on 18 April 2019

·     We expect to maintain the momentum of H1 through the second half, driven by:

o  strong sales pipeline including several promising cross-sell opportunities and prominent new clients for RWS IP Services

o  maintained year-on-year margin improvement at RWS Moravia

 

Andrew Brode, Chairman of RWS, commented:

"RWS has delivered a strong first half with record revenues and profits, driven by our three largest divisions. We are particularly pleased with the improved performance at RWS Moravia, which has achieved both healthy top- line growth and strong margins through focused operational management.

"Following a strong first half and encouraging performances at the start of H2, we are confident of achieving another record year.

"As the leading global supplier of intellectual property support services, a major force in life sciences and a global leader in localization, the Group is well positioned to deliver international expansion and profitable growth both organically and through selective acquisitions."