Translation specialist RWS has grown sales, underlying profits and dividends in each of the eight years since it floated, and 2010-11 was no exception - despite eurozone economic upheaval. Indeed, Reinhard Ottway, who takes the helm as chief executive in January, says the group has been "fairly crisis-proof" so far.
Sales at the core patent translations division - 70 per cent of the business - rose 7 per cent to £45.3m in the period. Still, the company is looking to markets outside of Europe, immune from regulatory changes like the planned European Union Patent, to sustain growth. RWS is enjoying success here. For example, sales grew twice as fast in Asia and the US - up 14 per cent to £13.5m. A 52 per cent surge in profits, on revenue that grew 38 per cent, meant China stood out, largely driven by the US, Japanese and European companies filing there. Meanwhile, fierce competition, particularly for government work, failed to crimp growth in technical translation services - up 12 per cent to £15.5m; a "significant" recovery in Germany and Switzerland is to thank there.
Numis Securities believes that the patent filing acquisition, Inovia, could contribute £3m to profits in 2014 and expects adjusted pre-tax profit of £17.5m in 2012, giving adjusted EPS of 29.8p (£16.2m and 27.2p in 2011).
RWS HOLDINGS (RWS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 479p | MARKET VALUE: | £197.8m | |
| TOUCH: | 460-480p | 12-MONTH HIGH: | 479p | LOW: 277p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 18 | |
| NET ASSET VALUE | 141p* | NET CASH: | £24.8m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 46.2 | 11.0 | 19.2 | 8.65 |
| 2008 | 54.1 | 13.7 | 23.5 | 10.4 |
| 2009 | 55.3 | 14.0 | 35.0 | 11.7 |
| 2010 | 60.6 | 13.7 | 23.2 | 13.4 |
| 2011 | 65.4 | 15.6 | 26.2 | 15.4 |
| % change | +8 | +14 | +13 | +15 |
Ex-div:18 Jan Payment:17 Feb *Includes intangible assets of £16.6m, or 40p a share | ||||
