2nd Jun 2014 07:46
LONDON (Alliance News) - RWS Holdings PLC Monday said it saw a slight drop in its pretax profit for the first half of the year, hit by the current strength of the sterling, although it said it recorded a 28% increase in revenues, and raised its dividend.
The provider of intellectual property support services said it saw good momentum from client wins in 2013 during the first half of the year, with further strong growth in China.
RWS said trading in the first two months of the second half of the year has been good despite continued sterling strength, and said it has an encouraging pipeline of opportunities in its patents business, and expects 2013 client wins to benefit more in the second half of the year, compared with the first half.
"Our financial position remains strong, and we have an encouraging pipeline of new business opportunities to exploit. We, therefore, expect continued progress in the second half of the year and beyond," said Chairman Andrew Brode in a statement.
Signalling its confidence despite the profit decline, the group raised its interim dividend by 9% to 4.9 pence.
RWS reported a pretax profit of GBP9.6 million for the six months to March 31, compared with a pretax profit of GBP10.2 million a year earlier.
RWS said the 2013 first half result benefited from an unrealised gain on the US dollar balances held for the completion of the acquisition of Inovia Holdings Pty. The net effect of this is a year-on-year negative exchange rate movement of GBP1.1 million.
Revenues in the first half rose 28% to GBP46.9 million from GBP36.7 million in the first half of last year, supported by good growth in its patent translations business, which represented 56% of group sales, underpinned by growing demand from new and existing clients and continuing progress in China and Japan.
RWS said it also benefited from a bigger revenue contribution from Inovia, having acquired the remaining two thirds of the business in September last year, although it said profitability in the business was held back by a shift in customer mix and restructuring costs.
"Our information division performed exceptionally well, primarily due to a welcome recovery in demand for search services as well as continued progress in PatBase subscriptions," the company said in a statement.
RWS said its commercial translations, which accounts for approximately 17% of group sales, saw flat revenues, although it said it has focused on more attractive specialist niches in response to a competitive environment in both in the UK and Europe.
RWS said it held net cash of GBP14.9 million at the end of the period, down from GBP28.0 million a year earlier, having acquired Inovia for USD23.3 million and paid out GBP4.3 million for a new building at Chiltern Park to provide space for future expansion.
RWS shares were trading 2.4% lower early Monday, at 839.00 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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