RWS held profits broadly steady in the period, which is impressive given the blow to the group from the so-called London Agreement. In detail, RWS generates the bulk of its earnings through translating patents into other languages, but the service was hit by a ruling that only the executive summaries of patents needed to be translated into specific foreign languages.
This is significant given that around 1m patent documents are produced every year. The group operates as two separate divisions, with translation services (both patent and non patent) accounting for 93 per cent of group turnover, while the remaining 7 per cent is generated from the information division. The information side's income is relatively small, but margins there are high, and PatBase, the group's searcher-friendly patent database, enjoyed a 62 per cent rise in subscriber income. RWS has also been busy on the acquisition trail, buying technical translations business Communicare in March and Ifama of Switzerland, allowing greater access to German speaking corporates in Switzerland
Shareholder's funds and earnings per share were boosted by the release of a £4.4m provision for corporation tax in respect of capital gains first realised in 2003. Numis Securities expects adjusted pre-tax profits of £15.6m for 2010 and EPS of 26.3p (2009: £14.5m/24.6p).
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| RWS HOLDINGS (RWS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 329p | MARKET VALUE: | £136m | |
| TOUCH: | 300-330p | 12-MONTH HIGH: | 350p | LOW: 200p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 116p* | NET CASH: | £24.3m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 35.9 | 6.83 | 11.9 | 6.00 |
| 2006 | 40.8 | 8.41 | 15.2 | 7.20 |
| 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 |
| % change | +2 | +2 | +49 | +13 |
Ex-div: 20 Jan Payment: 19 Feb *Includes intangible assets of £18m, or 44p a share | ||||
