RWS Holdings (AIM:RWS) shares slumped 35% to 75.18p on Wednesday after the language services company issued a trading update revealing a sharp drop in first-half profit, despite reporting organic growth in three of its four divisions.
For the six months to end-March 2025, adjusted profit before tax is expected to fall to £17 million, down from £46 million a year earlier, driven by a mix of non-trading items and weaker gross margins from changes in client delivery models.
While the group posted 1.3% organic constant currency revenue growth and highlighted strong performances in Asia-Pacific, TrainAI, and Language & Content Technology, the life sciences segment in its Regulated Industries division remained a drag.
CEO Ben Faes said in the statement that the group expects growth to accelerate in the second half and reconfirmed guidance for modest single-digit organic growth for the full year, but profit expectations were downgraded to between £60 million and £70 million.
RWS said it continues to invest in AI-led automation and expects to see efficiency gains and margin improvements in the second half.