17th Jun 2025 10:01
(Alliance News) - RWS Holdings PLC shares climbed on Tuesday despite reporting lower revenue in the first half of the 2025 financial year, as the firm set out a new strategy to "fundamentally change the way it operates".
Shares in RWS were up 3.3% to 88.00 pence in London on Tuesday morning.
The Buckinghamshire, England-based language services provider said revenue fell 1.7% to GBP344.3 million in the six months to the end of March from GBP350.3 million a year ago.
It swung to a pretax loss of GBP12.7 million from a GBP17.3 million profit a year prior.
Administrative expenses were up 13% to GBP159.2 million from GBP140.5 million, while cost of sales grew 2.7% to GBP195.1 million from GBP190.0 million.
Adjusted pretax profit was down 61% to GBP18.0 million from GBP45.6 million, due to the impact of GBP22 million of non-trading items including foreign exchange, increased amortisation, the impact of the sale of PatBase and an increase in the proportion of technology investment being expensed this year.
RWS declared an unchanged interim dividend of 2.45 pence for the first half of the year.
The company said three of its four divisions grew in the first half on an organic constant currency basis, resulting in overall organic growth of 1.4%.
"Particularly encouraging are the new logo wins and retentions with several globally-recognised brands that have driven growth in the [Asia Pacific] region, a strong performance from [Language & Content Technology] and a solid end to the first half in IP Services," said Chief Executive Officer Ben Faes.
It added that the lower gross margin of 43.3%, compared to 45.7% a year ago, was primarily driven by a weaker performance in Regulated Industries and continuing pricing pressure in its Language Services arm.
CEO Faes added: "Our AI-focused solutions continue to gain meaningful traction as we work closely with our clients to leverage technology both to create value and drive efficiency. However, changes in our mix of work and to new delivery models for certain clients have impacted profitability during this transition phase...We recognise that there is much to do to improve the group's performance and it is in this context that we have conceived our new strategy."
CEO Faes set out a new strategy, to adapt to "the global content explosion, shift to multimedia content" and changing technology.
"Against this backdrop RWS must fundamentally change the way it operates. The strategy that I am announcing today will put technology and product centre stage, as the beating heart of our business. We are moving to a simpler structure with the three pillars of generate, transform and protect and simplifying our go to market," Faes said.
"I am confident that this new growth strategy will allow RWS to become the content solution partner of choice, able to deliver accelerated and profitable growth and acquire additional capabilities through focused M&A," CEO Faes concluded.
RWS said it expects continued "modest" organic growth through the second half, to deliver low single digit organic constant currency growth for the full year, in line with previous guidance.
It continues to expect to deliver adjusted pretax profit between GBP60 million and GBP70 million for the 2025 financial year, as previously guided.
By Michael Hennessey, Alliance News reporter
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