RWS Holdings (AIM:RWS) PLC shares surged 12.3% higher on Thursday morning after the language translation specialist announced plans to return £50mln to shareholders via a buyback and held its guidance for the current year.
In its interim results statement, RWS posted revenue of £366.3mln for the six months ended 31 March 2023, a rise of 2.5% on the same period last year, while adjusted pre-tax profit dropped 10% to £54.4mln.
During the period, the company experienced softer activity levels amongst some Language Services clients, as well as weaker demand in Regulated Industries.
However, it also saw new business wins and strong retention across all divisions.
Performance for the full year is expected to be weighted to the second half, RWS said.
Following a profit warning in April, the company today forecast full-year results in line with its latest guidance and current market expectations for a revenue of £747.1mln and adjusted profit before tax of £126.6mln.
The company said cost cuts are expected to boost current-year results by £10mln, with a further £25mln positive impact seen for financial year 2024.
Looking ahead, RWS chief executive Ian El-Mokadem highlighted growth opportunities created by large investments and rapid developments in artificial intelligence (AI) and the company’s acquisition strategy.
"With our strong balance sheet and cash generation, we are actively pursuing acquisitions that could accelerate delivery of our medium-term plans.
“We are encouraged to see a much more exciting pipeline in the last six months which provides us with attractive opportunities to deploy our cash and we are at an advanced stage with a number of bolt-on opportunities," he said.
The company raised its interim dividend by 7% to 2.40p per share.
Net cash stood at £57.8mln as of 31 March 2023, down from £71.9mln at the end of the 2022 financial year.
At 10.05am, RWS shares were 28p higher at 255.40.