A combination of organic growth and a well-timed expansion of its life sciences capability fed through into a highly encouraging set of metrics for RWS (RWS) at the half-year mark. Continued strong performance within the key patent translation business, which accounts for around two-thirds of sales, together with a five-month contribution from Corporate Translations Inc (CTi), resulted in strong top-line growth.
The Aim-traded group, a specialist in intellectual property (IP) support services, continues to benefit from China's industrial expansion despite fears of a slowdown, while new business wins bolstered sales in the group's European and US markets. The result: a 26 per cent increase in adjusted earnings and a double-digit hike in the half-year payout.
The November acquisition of CTi, a global specialist in life sciences translation and linguistic validation, not only secured a dominant strategic position within a rapidly growing area of the IP market, but also effectively changed the scale of group operations. You can appreciate this by annualising CTi's contribution to these results, which would have represented just under a quarter of full-year sales for the 2015 year-end. RWS was already a highly cash-generative affair, but now the enlarged group is confident of paying off the $45m loan linked to the deal well ahead of the five-year term.
Numis expects adjusted profit of £28.2m for the September year-end, leading to EPS of 10.2p, against £22.7m and 8.1p in 2015.
| RWS HOLDINGS (RWS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 229p | MARKET VALUE: | £494m | |
| TOUCH: | 229-234p | 12-MONTH HIGH: | 249p | LOW: 120p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 43p* | NET DEBT: | 14% | |
| Half-yearto 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 45.4 | 9.6 | 3.4 | 1.03 |
| 2016 | 56.9 | 10.9 | 3.8 | 1.15 |
| % change | +25 | +14 | +12 | +12 |
Ex-div: 23 Jun Payment: 22 Jul *Includes intangible assets of £85m, or 39p a share. | ||||
