RWS Holdings PLC – Final Results

RWS Holdings PLC – Final Results

RWS Holdings plc, the world's leading provider of intellectual property support services (patent translations, international patent filing solutions and searches) and a leading provider of life sciences, localization and commercial language services, today announces its final results for the year ended 30 September 2018.

Financial highlights

2018

2017

Change

Revenue

£306.0m

£164.0m

+87%

Adjusted operating profit1

£66.3m

£43.4m

+53%

Adjusted profit before tax1

£61.8m

£43.3m

+43%

Reported profit before tax

£39.7m

£33.9m

+17%

Adjusted earnings per share

17.4p

14.3p

+22%

Basic earnings per share

10.4p

11.0p

-5%

Dividend

Proposed final

6.0p

5.2p

+15%

Total for year

7.5p

6.5p

+15%

Net debt2

£65.1m

£20.2m

+222%

 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 operating profit is stated before interest, amortization of intangibles, share option costs and acquisition costs. Adjusted profit before tax is stated before amortization of intangibles, share option costs and acquisition costs.

2 After the new loan facilities and the £185m gross proceeds from the share placing in October 2017, for the acquisition of Moravia.

 

Operational highlights

Successful acquisition and assimilation of leading localization provider

  • Completed acquisition of Moravia in November 2017, enhancing our global presence and helping to position RWS as a leading global language service provider with a dedicated localization division
  • The acquisition has significantly enhanced earnings, contributing to a 22% increase in adjusted earnings per share to 17.4p (2017: 14.3p)
  • Excellent second half at Moravia seeing adjusted operating profit up 162% to £12.3m, following slower first half1 (H1: £4.7m)
  • Successfully completed assimilation and rebranding to RWS Moravia on 1 October 2018

Growth in sales and profits across the Group

  • Growth in revenue and underlying2 adjusted operating profit across all divisions, notably:
    Patent Translation & Filing revenue up 5% to £102.3m (2017: £97.8m) and adjusted operating profit up 15% to £30.9m (2017: £26.9m)
    Life Sciences revenue up 15% to £52.3m (2017: £45.3m), including a full year contribution from LUZ, with the margin benefit of the integration of LUZ and CTi resulting in a 21% increase in adjusted operating profit to £14.5m (2017: £12.0m)
  • Good new business wins across the Group including from meaningful successes in cross-selling. Further enabling sales teams to pitch RWS's full suite of services remains a key focus for FY 2019
  • Strengthened the Board with the appointment of Tomas Kratochvíl, former CEO of Moravia, who brings extensive knowledge of the global localization market

1 Note: H2 includes one additional month of trading (H1 - five months, H2 - six months).
2 Calculated excluding the acquisitions and at constant currency.

Outlook

  • The Group has made a very good start to FY 2019 with a strong performance in the first two months, underscoring our expectations of delivering another record year
  • Our enhanced global presence and diversified service offering provides a strong platform for developing sales opportunities across our full suite of services and technology platforms to new and existing clients

Andrew Brode, Chairman of RWS, commented:

"This has been a remarkable year in which we celebrated our 60th year in business and delivered our 15th year of unbroken growth in revenues, profits and dividends since flotation in November 2003.

"We were delighted to complete the transformational acquisition of Moravia and receive "Transaction of the Year" at the recent AIM Awards. The Moravia team delivered a very strong second half and we look forward to further growth from this business.

"The Group is now one of the world's leading providers of language services, with a strong platform for taking advantage of the multiple opportunities afforded by our enhanced service offering, extended global presence and the growing markets for our intellectual property, life sciences and localization businesses. Backed by a strong balance sheet, we are also well positioned to take advantage of further acquisition opportunities as they arise.

"We have made a very good start to the new financial year and we look forward to 2019 with confidence."

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