14th Apr 2014 09:47
LONDON (Alliance News) - RWS Holdings PLC Monday said it expects its first-half revenues to increase by about 28%, but said adjusted pretax profit before amortisation of intangibles and share option costs is expected to be broadly in line with the comparative period.
In a statement, the intellectual property support services company said its adjusted pretax profit represents an underlying increase of approximately 12% after taking account of the net GBP1.3 million unrealised foreign exchange gain in the comparative period. That gain resulted from gains on the unhedged US dollar balances the group had held in anticipation of the purchase of the remaining two thirds of inovia in September 2013.
RWS said it has continued to strengthen its financial position with shareholder funds in excess of GBP72.0 million and net cash of GBP14.0 million at the end of March, underpinning its ability to both make acquisitions and support its progressive dividend policy.
"Our financial position remains strong and we have an excellent pipeline of new business opportunities to exploit. We, therefore, expect further progress in the second half of the year and beyond," Executive Chairman Andrew Brode said in a statement.
inovia, which was acquired in September 2013, contributed sales of GBP9.7 million, a net increase of GBP7.7 million over the prior period, after the elimination of intercompany sales, but the increase was held back by the strength of sterling, RWS said.
The core patent translation business, which accounted for approximately 70% of group sales last year, has performed well, RWS said.
However, earlier new client wins, which were slightly slower to convert into significant new business than anticipated, are now expected to benefit the second half of the current financial year to a greater extent than the first-half, RWS said.
Within the patent translation service line, the Japanese operation performed satisfactorily on a local currency basis but sterling sales were held back by the weakness of the yen, RWS said.
In addition, the Chinese operation continued to make "further progress".
In its commercial translations service line, RWS has been focused on taking on work at sufficiently attractive margins in the context of increased competition both in the UK and in Europe.
RWS said its information division performed "exceptionally well during the period" as a result of both the continued growth in PatBase and a recovery in demand for search services which had previously been subdued during the recession.
RWS was providing an update for the half-year ended March 31, ahead of announcing full results on June 2.
RWS shares were Monday quoted at 961.62 pence, up 1.2%.
By Samuel Agini; [email protected]; @samuelagini
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