Half Year Trading Statement

RNS Number : 6378E

RWS Holdings PLC

14 April 2014

 



For immediate release                                                                                                                       14 April 2014

RWS Holdings plc

Half Year Trading Statement

RWS Holdings plc (RWS), the world's leading provider of intellectual property support services (patent translations and searches), commercial translations and international patent filing solutions, today provides an update on trading for the half year ended 31 March 2014, ahead of the announcement of its half year results on 2 June 2014.

Trading & Financial Update

The Board expects Group revenues for the half year ended 31 March 2014 to be approximately £46.9 million compared to £36.7 million in the previous financial year, an increase of 28%.  At constant currency rates, revenues would have been approximately £1 million higher. Adjusted profit before tax (before amortisation of intangibles and share option costs) for the first half of the current financial year is expected to be broadly in line with that achieved in the comparative period, representing an underlying increase of approximately 12% after taking account of the net £1.3m unrealised foreign exchange gain in the comparative period which resulted from gains on the unhedged US$ balances the Group had held in anticipation of the purchase of the remaining two thirds of inovia in September 2013, as referred to in the Group's half year results announcement on 10 June 2013.

inovia itself contributed sales of £9.7 million (a net increase of £7.7 million over the prior period, after the elimination of intercompany sales) but was held back by the strength of the £ sterling.  The core patent translation business (which accounted for approximately 70% of Group sales last year) has performed well, albeit earlier new client wins, which were slightly slower to convert into significant new business than anticipated are now expected to benefit the second half of the current financial year to a greater extent than the first half.  Within our patent translation service line, the Japanese operation performed satisfactorily on a local currency basis but sterling sales were held back by the weakness of the yen whilst our Chinese operation continued to make further progress.  In our commercial translations service line, we have been focussed on taking on work at sufficiently attractive margins in the context of increased competition both in the UK and in Europe. Our information division has performed exceptionally well during the period as a result of both the continued growth in PatBase and a recovery in demand for search services which had previously been subdued during the recession.

We have hedged estimated net trading exposure to the Euro at 1 Euro = 87p until 30 September 2014, and at 1 Euro = 83.5p from 1 October to 31 December 2014. 

The Group has continued to strengthen its financial position with shareholder funds in excess of £72 million and net cash of £14 million as at 31 March 2014, underpinning the Group's ability to both make acquisitions and support its progressive dividend policy.

Market Update

In March, the World Intellectual Property Office (WIPO) published figures showing a 5.1% growth in the 2013 PCT filings to 205,300, the first time the number of annual international patent applications has surpassed the 200,000 mark.  Within these numbers, the USA grew by 10.8% and China by 15.6%.  The European Patent Office also published figures showing that the total number of European patent filings increased by 2.8% to 265,690 in 2013, again a new record. European filings from Chinese applicants increased by 16.2%.

Andrew Brode, Executive Chairman of RWS, commented on outlook:

"RWS' position as the premier supplier of intellectual property support services has proved to be a resilient business model in recent years and as the economic climate improves we expect to continue to extend our share of the patent translation and intellectual property services markets.

"Our financial position remains strong and we have an excellent pipeline of new business opportunities to exploit.  We, therefore, expect further progress in the second half of the year and beyond."

For further information contact:

RWS Holdings plc

Andrew Brode, Executive Chairman                                                                                01753 480200

MHP

Katie Hunt / Simon Hockridge / Nick Hayns                                                                    020 3128 8100

Numis

Stuart Skinner (Nominated Adviser)                                                                                020 7260 1000

James Serjeant (Corporate Broker)

About RWS:

RWS is the world's leading provider of patent translations and one of Europe's leading players in the provision of intellectual property support services and high level technical, medical, commercial, legal and financial translation services.  Specialist divisions provide for the diverse needs of a blue-chip multinational client base from Europe, North America and Asia in the aerospace, automotive, chemical, defence, electronics, financial, insurance, legal, medical, pharmaceutical and telecommunications industries.  RWS is based in the UK, with offices in Europe, New York, Tokyo, Beijing and Sydney, and is listed on AIM, the London Stock Exchange regulated market (RWS.L).

In September 2013, RWS completed the acquisition of inovia Holdings Pty Limited which is headquartered in New York and is the largest non-law firm provider of international patent filing solutions globally. Its patented, web-based technology provides over 1000 law firm and corporate clients with cost effective processing of international patent applications, typically producing cost savings in excess of 30%.  From its locations in the US, Australia and Europe, its patent filing service covers 124 countries.

For further information please visit: www.rws.com

 

END

 

 

TSTSFUSUFFLSEDL