10th Oct 2008 09:36
For immediate release 10 October 2008
RWS Holdings plc
Year End Trading Statement
RWS Holdings plc (RWS), Europe's leading provider of intellectual property support services (patent translations and searches) and technical translations, today provides an update on trading for the year ended 30 September 2008 ahead of the announcement of its full year results on 11 December 2008.
Trading update for the year ended 30 September 2008
Revenue and profit before tax are expected to be substantially ahead of the prior year and to achieve new record levels, although underlying profits are expected to be marginally below consensus. There have been good performances across all of our business areas; patent translation, technical translation, and patent search, accompanied by useful margin improvements and favourable foreign exchange movements.
Patent translation, which represents 75% of Group revenue, achieved further progress underpinned by growth in the number of patent grants worldwide. In line with our expectations, revenues have begun to experience declines following the introduction of the London Agreement on 1 May 2008.
Technical translation, which accounts for 19% of revenue and focuses on high margin, high quality technical translation services, showed good organic growth complemented by the 2007 acquisition of Japanese Language Services, a UK based provider of high level technical translations from Japanese to English, and the February 2008 acquisition of Document Service Center (DSC), a Berlin-based provider of technical translations to German and Swiss corporates. The integration of DSC into our German operations and their joint performance has been exemplary.
Patent search represents 6% of Group revenue and has achieved stronger growth as well as further margin improvements. This performance reflects improved demand for direct search services including a large contract, and a further 58% increase in PatBase gross subscription revenues.
At a time of enhanced nervousness surrounding the outlook for the world economy and the availability of bank credit, RWS' balance sheet has strengthened further, backed by net cash in excess of £21 million, after the £5.8m net cash consideration spent on the DSC acquisition during the year (2007: £20.4 million). This strong financial position underpins our intention to increase the final dividend in line with the increase in profits.
Strategy
The Board's strategy is to more than compensate for the impact of the London Agreement and the likely slowdown in world economic activity, by growing both organically and by selective acquisitions in the high level technical translation and intellectual property support services spaces. In order to drive organic growth, it is our intention to make significant investments in upgrading our technology infrastructure and sales capability in 2008/9. We also believe our strong cash position will allow us to make focused acquisitions at more attractive prices in the coming year. Our acquisitions track record supports the Board's confidence in its ability to execute acquisitions which deliver enhanced shareholder value.
Andrew Brode, Executive Chairman, commented:
"Against a deteriorating economic background, RWS has delivered further record results. The Group's strong financial position and its reputation for high quality services provide it with a strong platform from which to grow its share of the resilient intellectual property services market. We therefore intend to invest in both organic and acquisitive growth in the current year to drive further progress in future years."
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For further information, please contact:
RWS Holdings plc
Andrew Brode, Executive Chairman Tel: 01753 480200
SmithfieldKatie Hunt / Rebecca Whitehead Tel: 020 7360 4900
Numis Securities Limited as Nominated Adviser
Stuart Skinner Tel: 020 7260 1000
Numis Securities Limited as Broker
James Serjeant Tel: 020 7260 1000
About RWS:
RWS is Europe's leading provider of intellectual property support services (patent translations and technical searches) to the medical, pharmaceutical, chemical, aerospace, defence, automotive and telecoms industries. RWS is based in the UK with offices in Europe, New York, Tokyo and Beijing and is listed on AIM, the London Stock Exchange regulated market (RWS.L).
For further information please visit: www.rws.com
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