1st Oct 2007 07:01
RWS Holdings PLC01 October 2007 For immediate release 1 October 2007 RWS Holdings plc Year End Trading Statement RWS Holdings plc (RWS), Europe's leading provider of intellectual propertysupport services (patent translations and searches) and technical translations,today provides an update on trading for the year ended 30 September 2007, aswell as an update on the London Agreement. It intends to announce itspreliminary results on 11 December 2007. Trading update for the year ended 30 September 2007 Revenue and profit before tax are expected to surpass market expectations whichare considerably ahead of the prior year, and to achieve new record levels.There have been strong performances across all of our business areas; patenttranslation, technical translation and patent search, accompanied by furthermargin improvements and favourable foreign exchange movements. Patent translation, which represents 80% of Group revenue, achieved furtherprogress driven primarily by growth in the number of patent grants worldwide andsignificant new client activity. Technical translation, which accounts for 14% of revenue and focuses on high margin, high quality technical translation services, showed strong organicgrowth. On 11 June 2007 we announced the acquisition of Japanese LanguageServices Limited ("JLS") and can confirm that JLS is already making a usefulcontribution to revenues and profits. Patent search represents 6% of Group revenue and has achieved good growth andfurther margin improvements, reflecting a return to growth in the core patentsearch activities and a stellar performance, ahead of our expectations, from ourproprietary subscription database, PatBase. RWS' balance sheet demonstrates enhanced strength, backed by net cash of £21million and shareholders' funds of £26 million. With the significant progressachieved in the year ended 30 September 2007 and our confidence in the Group'scontinued progress in the current year, we expect to increase the final dividendin line with the increase in profits. London Agreement RWS has consistently drawn shareholders' attention to the possibleimplementation of the London Agreement. In our preliminary results announced on12 December 2006 we stated that opposition to French ratification had weakened,that the Board was monitoring developments in France and that plans were well inhand to limit any material financial downside were the agreement to beimplemented. The new French government secured approval from the NationalAssembly on 26 September. It is anticipated that the issue of ratification willbe debated in the Senate on 10 October and, if approved, the London Agreementwould probably come into effect in March 2008. We are, therefore, confident that implementation will have no effect upon ourresults for the first half of 2007/08. Our core patent translation activities(into English primarily for the US Patent Office) are in excellent shape andunaffected by the London Agreement; the potential loss of work comprises theinto European language translations performed by freelances and hence we do notanticipate any material restructuring costs. Our best estimate of the likelyreduction in profit in the second half of 2007/08 is of the order of £1 million,before any redeployment of the Group's substantial cash balances into focussedacquisitions. Strategy The Board's strategy is to grow both organically and by selective acquisitionsin the high level technical translation and intellectual property supportservices spaces. As part of our planning to limit the financial effects of thepotential implementation of the London Agreement, we have already built a firmplatform for medium to long term growth with the extension of our services toJapan and have received encouraging levels of interest in our nascent Chineseoperation. In non patent translations we expect the JLS acquisition to befollowed by others during 2007/08. Andrew Brode, Executive Chairman, commented: "RWS has delivered another strong performance in 2006/07, driven by the highlevel of demand for all of its market-leading services. "The continued expansion of our intellectual property protection and technicaltranslation services makes us confident of further progress in the new financialyear which we expect to supplement with further acquisitions designed to offsetthe impact of the London Agreement in future years." - ends - For further information, please contact: RWS Holdings plcAndrew Brode (Executive Chairman) Tel: 01753 480200 SmithfieldKatie Hunt/Miranda Good Tel: 020 7360 4900 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 basedin the UK with offices in Europe, New York, Tokyo and Beijing, and is listed onAIM, the London Stock Exchange regulated market (RWS.L). For further information please visit: www.rws.com About the London Agreement The London Agreement is an optional agreement between member states of theEuropean Patent Convention, which will allow European patents to be protectedwithin signatory states if they are fully translated into either English, Germanor French, whilst only the claims of the patent will need to be translated intothe national language, thereby reducing the patent translation requirements ofsignatory countries. Germany, the UK, the Netherlands, Switzerland, Iceland,Latvia, Liechtenstein, Monaco and Slovenia have ratified the London Agreement,whilst Sweden and Denmark have approved it, with enforcement remainingcontingent upon French ratification. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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