RWS Holdings (RWS) looks to have hit its stride, posting double-digit growth in revenues and pre-tax profit in three consecutive updates. The first half of its 2017 financial year saw adjusted operating profit rise 28 per cent to £19m at the patent and commercial translation services provider.
The performance is being driven in part by an increase in the number of patents being filed, with the World Intellectual Property Organization reporting a 7.3 per cent increase in 2016 filings to 233,000. The fastest growing country for applications is China, with a 45 per cent increase. Chairman Andrew Brode said the group now has 70 employees in China across three offices and has set up a sales team to capitalise.
The group’s two most recent acquisitions, US-based life sciences translation businesses Corporate Translations and LUZ, contributed to its performance in the period. CTi has now been fully integrated, while LUZ delivered £1.1m in adjusted pre-tax profit from a six-week contribution. The acquisitions gave the group operations on both coasts of the US; this expansion has been a strategic focus for the group since 2015, with China expected to become increasingly important from 2020.
Analysts at Numis are forecasting profit before tax of £41.1m, giving EPS of 13.9p for the year to September 2017 (from £30.6m and 10.8p in FY2016).
| RWS (RWS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 395p | MARKET VALUE: | £902m | |
| TOUCH: | 395-400p | 12-MONTH HIGH: | 406p | LOW: 210p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 39 | |
| NET ASSET VALUE: | 67p* | NET DEBT: | 21% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 56.9 | 10.9 | 3.8 | 1.15 |
| 2017 | 76.6 | 14.3 | 4.9 | 1.30 |
| % change | +35 | +32 | +29 | +13 |
Ex-div: 29 Jun Payment: 21 Jul *Includes intangible assets of £157m, or 69p a share | ||||
