As flagged in an October trading update, a recovery in sales during the second half of the year boosted pre-tax profit at RWS (RWS) last year. The group's core patent translation business finally felt the benefit of new client wins, which helped generate a 7 per cent uptick in its underlying revenue, at constant currencies. Combined with a healthy showing from international patent processor Inovia, group operating profit was up 6 per cent at £20.8m.
China continued to attract North American and European patent filers, with the patent translations business enjoying particularly strong demand from the pharmaceuticals, IT and electronics sectors. As a result, RWS increased its Chinese headcount and continued to develop its production and training centres with three universities in the country.
However, the commercial translations business, which operates across the UK, Germany and Switzerland, continued to suffer from intense competition. The business delivered broadly flat revenue of £15.9m. As a result, this division will concentrate on larger, niche projects, and has established an into-German translation service in its Berlin office in a bid to lift margins.
Broker Numis Securities expects adjusted EPS of 9.6p this year, up from 8.1p in FY2015.
RWS (RWS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 222p | MARKET VALUE: | £470m | |
| TOUCH: | 220-222p | 12-MONTH HIGH: | 230p | LOW: 120p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 40p* | NET CASH: | £30.6m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p)** | Dividend per share (p)** |
|---|---|---|---|---|
| 2011 | 65.4 | 15.6 | 5.2 | 3.08 |
| 2012 | 68.8 | 16.6 | 6.0 | 3.50 |
| 2013 | 77.4 | 20.5 | 7.5 | 4.06 |
| 2014 | 93.6 | 19.6 | 7.2 | 4.58 |
| 2015 | 95.2 | 20.7 | 7.3 | 4.88 |
| % change | +2 | +5 | +2 | +7 |
Ex-div: 28 Jan Payment: 26 Feb *Includes intangible assets of £38.3m, or 18p a share **Pre-2015 figures adjusted for five-for-one share split | ||||
