9th Jun 2020 10:09
(Alliance News) - RWS Holdings PLC on Tuesday announced two acquisitions, together worth USD41 million, while reporting a 6% year-on-year drop in first half pretax profit.
The Chalfont St Peter, England-based patent translations and international patent filing solutions provider has bought Iconic Translation Machines Ltd for up to USD20 million in cash and stock and Webdunia.com (India) Pvt Ltd USD21.0 million in cash.
Dublin, Ireland-based Iconic develops neural machine translation solutions. For 2019, Iconic Translation recorded revenue of USD1.2 million and adjusted earnings before interest, tax, depreciation and amortisation of USD23,000.
The Iconic Translation acquisition is expected to help RWS strengthen its capabilities in service-offerings in the neural machine translation solutions sector. The consideration for Iconic comprises USD10.0 million in cash and up to USD10.0 million in deferred consideration in RWS shares.
Webdunia, which has offices in India, Thailand and the US, provides translation, localisation and technology services. The company achieved revenue of USD13.8 million for the year ended March 31 and adjusted Ebitda of USD3.1 million.
The Webdunia deal is expected to complement RWS's exisiting Moravia business and to strengthen its India-based translation and localization market share.
Andrew Brode, chair of RWS, said: "The acquisitions of Webdunia and Iconic are an ideal fit for RWS. They complement and strengthen our existing translation and localization and technology services, while extending the group's geographic reach in line with our strategic objectives.
"Notwithstanding the challenges presented by Covid-19, the group's strong financial position enabled us to acquire these businesses from existing financial resources".
For the six months to March 31, RWS recorded pretax profit of GBP25.8 million, down 6.3% from GBP27.6 million a year ago. Revenue fell 1.6% to GBP169.7 million from GBP172.3 million.
Life Sciences was the best performing division of the three RWS divisions followed by Moravia and IP Services, the company noted.
RWS said it is seeing a limited impact on customer demand from Covid-19, with increased activity from Moravia's large technology clients and Life Sciences' clients, who are working on vaccines and antibody testing, offset by some impact on IP services, including slower onboarding of new clients.
Trading performance since the end of the first half has been good, the company added, with a very strong result in April and strong sales in May.
RWS has decided against from providing financial guidance for financial 2020.
The company has maintained its first half payout at 1.75 pence per share, reflecting confidence in the company's future prospects.
Shares in RWS were up 0.6% at 629.88 pence each in London on Tuesday morning.
By Tapan Panchal; [email protected]
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