24th Apr 2025 14:47
(Alliance News) - RWS Holdings PLC shares plunged on Thursday as it cut its full year profit outlook and said it expects to report a drop in first half earnings.
The Berkshire, England-based firm language services firm said it expects to report adjusted pretax profit of GBP17 million for the six months to the end of March, down 63% from GBP46 million a year ago.
RWS Holdings shares fell 42% to 66.98 pence in London on Thursday afternoon.
Revenue is expected to have fallen 1.8% to around GBP344 million from GBP350.3 million, with 1.3% organic constant currency growth.
Adjusted pretax profit has been impacted by several non-trading items including foreign exchange, increased amortisation and the impact of the PatBase sale and a higher proportion of technology investment being expensed in the year, RWS said.
It said non-trading items account for GBP23 million of the decline.
RWS also reported mix challenges due to "weaker" performance in the life sciences segment of its Regulated Industries arm, as well as initial transition costs as clients are onboarded on to new automated delivery models.
RWS said three out of four divisions grew in the period with "continued momentum" in its software products division and good progress with artificial intelligence-led products and services.
The company expect its full-year adjusted pretax profit to be GBP60 million to GBP70 million, down from GBP106.7 million in the 2024 financial year.
RWS said it anticipates the full year gross margin impact from mix changes at around 300 basis points.
RWS Holdings first half results will be released on June 17.
Chief Executive Officer Ben Faes said: "Our AI-focused solutions continue to gain traction with clients and we expect the group's growth momentum to accelerate through the second half, giving confidence in the delivery of OCC growth expectations for the full year.
"Whilst changes in our mix of work and to new delivery models for certain clients have impacted profitability during this transition phase, we are confident that the actions we are taking to drive efficiency, agility and automation across the group will support sustained profitability as we capture the higher volume growth anticipated in our markets."
By Olivia Mason-Myhill, Alliance News reporter
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