Proactive Investors - Run By Investors For Investors

RWS acquisitions translate into growth of profits and cash flow

“Following a strong first half and encouraging performances at the start of H2, we are confident of achieving another record year”
language
RWS employs a global team of linguists, searchers and technical experts

Language translation and localisation services provider RWS Holdings PLC (LON:RWS) reported continued strong sales and profits growth in the first half of the year.

Revenues of £172.3mln in the six months to 31 March were up 23% on the same period a year earlier, with adjusted profit before tax (PBT) rising by 24% to £35.6mln.

READ: RWS Holdings expects record full year performance after strong first half

Results were boosted by growth in underlying sales and profits from all three main divisions, most notably the November 2017 acquisition of Moravia, a market-leading player in localisation services that has worked with the Fab Five tech stocks of Apple, Amazon, Facebook, Google, and Microsoft.

Moravia's revenue in the half represented 41% of group revenues, with sales up 36% to £71.1mln, or 10% if favourable currency swings and the additional month of trading are taken out. Profit margins at Moravia leapt to 19.3% from 9.3%, enabling a near tripling of adjusted operating profit to £13.7mln.

The group generated strong cashflow of £27.4mln to cut net debt by almost a quarter to £63.9mln, complete the US$6.0mln acquisition of legal specialist Alpha Translations Canada and fund a 17% growth in interim dividend to 1.75p per share.

Full year on target

Chairman Andrew Brode said: “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.”

Numis, the company’s ‘house’ broker, after a near 50% gain in the share price over the past twelve months, downgraded the rating on its client to ‘hold’ from ‘add’ but on an unchanged price target of 600p.

With trading having been in line with expectations since an April trading update when it upgraded its estimates by 4-8%, Numis left its full-year forecasts unchanged, looking for revenue of £349.7mln, PBT of £72.7mln and EPS of 20.9p.

RWS shares were down 2% to 592.64p on Tuesday morning. 

View full RWS profile View Profile

RWS Holdings Timeline

Newswire
October 11 2016

Related Articles

Stobart
May 31 2019
"Stobart Group has a clear focus on developing infrastructure assets in the aviation and energy sectors," chief executive Warwick Brady said.
Interviewees
August 07 2018
The offer values Nash at £98.7mln and DBAY already controls 26.1% of Harvey Nash shares
Investment papers and laptop
May 07 2019
The investment firm focuses on providing consultancy services to universities and other research organisations to help them commercialise any intellectual property arising from their research

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use