Impressively, this marked the tenth consecutive year since listing that patents specialist RWS (RWS) has grown its sales, profits and dividends. The core patent translation business, which represents around 69 per cent of group sales, reported an 11 per cent rise in revenue to £53.5m, boosted by new business wins and rampant growth in China. Work generated by the inovia international patent filing business - the remaining two thirds of which RWS announced it was acquiring for £12.9m in September - also provided a boost.
Headquartered in the US, inovia is the world’s largest non-law firm provider of international patent filing solutions and helps companies process patent applications more cheaply. Executive chairman Andrew Brode says the inovia deal is "a transformational acquisition" - that, along with PharmaQuest acquired in May, have put the company on track for £100m of revenue in 2014.
An update on the regulatory situation in Europe indicates that RWS expects the new EU patent, which will reduce the number of languages in which patents need to be filed, to come into force in late 2015. But RWS believes its impact will be "minimal" as the new system will run alongside the existing one "indefinitely" and clients are showing little interest in switching to the new and untested alternative.
Broker Numis Securities has raised its adjusted pre-tax profit and EPS forecasts for 2014 by 5 per cent to £23.3m and 42p, respectively (from £21m/38.5p in 2013).
| RWS HOLDINGS (RWS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 825p | MARKET VALUE: | £349m | |
| TOUCH: | 845p-850p | 12-MONTH HIGH: | 850p | LOW: 525p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 169p* | NET CASH: | £18.2m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2012 | 68.8 | 16.6 | 29.9 | 17.5 |
| 2013 | 77.4 | 20.5 | 37.6 | 20.3 |
| % change | +13 | +23 | +26 | +16 |
Ex-div: 22 Jan Payment: 21 Feb *Includes intangible assets of £40.2m, or 95p a share | ||||
