Moravia leads the way at RWS

Spurred by demand for higher value localisation services from top technology clients, Moravia’s adjusted operating profit margin has more than doubled to 19.3 per cent. Although underlying revenue increased by 10 per cent, the business did see a reduction in volumes from the number one client. Management contends this is because multi-faceted technology companies often have product offerings that reach maturity: “What you are seeing right now is a transition period…we don’t necessarily see that part of the business recovering, but rather being replaced with another part of the customer offering that will grow”. Seeking to diversify revenue, Moravia is pushing to expand from five to 10 major accounts. Outside of its top five clients, sales have surged by 36 per cent.

With the European Patent Office reporting a 4.6 per cent increase in patent filings, the group’s European patent translation and filing business saw revenue increase by 23 per cent. At the forefront of RWS’s international growth strategy, intellectual property (IP) services continue to make inroads in the key Asia Pacific market. While the predominant focus is currently on European and North American corporations seeking patent protections in China and Japan, the group is looking to capitalise on local opportunities in the burgeoning Chinese IP market. Revenue from domestic customers in China has increased by 40 per cent, as Chinese patent attorneys increasingly outsource work.

Berenberg expects adjusted pre-tax profit of £72m and EPS of 20.9p for the September 2019 year-end, rising to £79m and 22.9p in FY2020.