Half Yearly Report

RNS Number : 5989G

RWS Holdings PLC

10 June 2013

 



For immediate release                                                                                                                    10 June 2013

RWS Holdings plc ("the Group")

Half year report for the six months to 31 March 2013

Excellent performance from core business

inovia referred work and order book momentum underpins confidence for full year

RWS Holdings plc (RWS), Europe's leading provider of intellectual property support services (patent translations and searches) and commercial translations, today announces its half year results for the six months ended 31 March 2013.

Financial Highlights:

·          Sales for the period up by 9% to £36.7m (H1 2012: £33.7m; H2 2012: £35.1m)

·          Profit before tax* for the period up by 31% to £10.6m (H1 2012: £8.1m, H2 2012: £9.1m)

·          Adjusted diluted earnings per share* up 31% to 18.9p (H1 2012: 14.4p)

·          Interim dividend increased by 12% to 4.5p (2012: 4.0p)

·          Net cash at period end increased by 24% to £28.0m (2012: £22.5m)

* before amortization of intangibles

Operational Highlights:

·          Excellent performance in the Group's core patent translations business:

·          Significant contribution from 2012 client wins and inovia referred work

·          Further strong growth in China and Japan

·          Growth in commercial translations driven by:

·          Strong momentum in the medical sector

·          A  turnaround in German and Swiss operations

·           Information grew modestly driven by an 11% increase in high margin PatBase revenues offset by continued weakness in smaller search and watch services

·          inovia gross revenues for the nine months to 31 March 2013 increased by 27% to $18.2m

·          Richard Thompson appointed as Group Finance Director

Current Trading and Post Period End:

·          Strong trading performance in the first two months of the second half

·          Net Euro trading exposure hedged at 1 Euro = 85p from 1 April to 30 September 2013, and at 1 Euro = 87p from 1 October to 31 March 2014.  The Group has also built up substantial US$ balances as a natural hedge against the inovia earn-out liability due to be paid in September 2013.

·          £2.3m acquisition of PharmaQuest announced on 1 May 2013

Executive Chairman Andrew Brode commented:

"RWS has delivered an excellent performance in the first half of the financial year, helped by foreign exchange gains, with most of its operating units well ahead of prior year results, and we have had a strong start to the second half of the year. A combination of an encouraging pipeline in our core patent business, good momentum in the inovia business, the recent addition of PharmaQuest to our medical translations division and the continued weakness of sterling leave us confident of delivering strong progress in the remainder of the year.

"Beyond the current year, we are well placed to continue increasing our share of the patent translation and intellectual property services market and the expected completion of the inovia acquisition in September 2013 will further enhance our growth prospects."

For further information contact:

RWS Holdings plc

Andrew Brode, Executive Chairman                                                                                     01753 480200

MHP

Katie Hunt/Simon Hockridge                                                                                              020 3128 8794

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 and Beijing, and is listed on AIM, the London Stock Exchange regulated market (RWS.L).

RWS also has a one third interest in 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 122 countries.

Over 2,000,000 patent applications are filed globally per annum.  Applications filed in Europe have more than doubled in the last ten years to 258,000 applications in 2012 (source: European Patent Office), a 5.24% increase from 2011.  Applications from Asia have also seen continued significant growth.

For further information please visit: www.rws.com

Executive Chairman's Statement

The Group has delivered an excellent performance in the first half of the current financial year, with most of the Group's global operating divisions performing well despite the lack of economic growth in the wider economy.  In addition, we are pleased with the performance of inovia, in which we acquired an initial minority stake in October 2011 and which we expect to fully acquire in September 2013. Its acquisition adds a highly complementary and scalable web-based patent filing platform to our existing patent search and translation offerings.

The core patent translations business further enhanced its market leading position, underpinned by growth in demand from both new and existing clients, translation work transferred from inovia and strong demand for its services in China and Japan.  Commercial translations saw good demand from medical clients as well as a strong turnaround in the Group's German and Swiss operations. Encouragingly, in the information services business, PatBase subscription revenues advanced by a further 11%.

Business Overview

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.  Its main business - patent translation - translates well over 65,000 patents and intellectual property related documents each year.  It has a blue chip multinational client base from Europe, North America and Asia, active in patent filing in the medical, pharmaceutical, chemical, aerospace, defence, automotive and telecoms industries, as well as patent agents acting on behalf of such clients.  The Group has two principal business activities: Translations, which accounts for over 90% of sales and incorporates patent and commercial translation services, and Information, which includes a comprehensive range of patent search, retrieval and monitoring services as well as PatBase, one of the world's largest searchable commercial patent databases, access to which is sold exclusively as a subscription service.

Strategy

Our strategy is focused upon organic growth complemented by deploying our substantial cash holdings for selective acquisitions, providing they can be demonstrated to enhance shareholder value.  Organic growth is driven by increases in the worldwide patent filing activities of our existing and potential multinational clients, the growing demand for language services and our ability to increase our market share by winning new clients attracted by our leading position and reputation, in an otherwise fragmented sector.

In terms of acquisitive growth, having been generally pleased with the return on acquisitions made to date, we continue to search for suitable potential acquisitions in the high level commercial translation and intellectual property support services spaces.  We seek niche businesses capable of delivering well above industry average levels of profitability or highly complementary businesses capable of reinforcing our dominant position in intellectual property support services.  This strategy was most recently demonstrated by the acquisition of PharmaQuest Limited on 1 May 2013, as described below.

Results and Financial Review

Sales for the six months ended 31 March 2013 were up 9% at £36.7 million (H1 2012: £33.7 million).  In constant currency terms, sales revenues would have been approximately £0.9 million higher.

After finance income of £0.1 million (2012: £0.4 million), which includes gains and losses on the fair value of forward foreign exchange contracts, profit before tax and amortization of intangibles was £10.6 million against £8.1 million in 2012, a rise of 31%. Adjusted diluted earnings per share were up 31% to 18.9p (2012: 14.4p).

At 31 March 2013, shareholder funds had reached £65.5 million (2012: £58.5 million), of which net cash represented £28.0 million (2012: £22.5 million).

Significant cash outlays included corporation tax and the final dividend for 2012, paid in February 2013, of £5.7 million (2012: £5.0 million).  Free cash flow rose strongly from £6.4 million in 2012 to £8.8 million.

Currency Effects and Hedging

Sales revenues were up by 11.5% on a constant currency basis, but reported revenues were reduced by £0.9 million as a result of weaker average exchange rates for the Euro, the Swiss Franc and the Yen, whilst the US Dollar strengthened marginally. The £0.9 million revenue shortfall reduced reported profits by an estimated £0.3 million.  The average rate used for conversion of the Euro was 83.3p to the € versus 84.25p in the first half of 2012.  For the US dollar, the average rate was 1.578 dollars to the £ versus 1.585 dollars in the first half of 2012.

As a result of holding unhedged US$ balances in anticipation of the purchase of the remaining two thirds of inovia in September 2013, and from gains on Euro assets, the Group recorded a net favourable exchange variance of £1.6 million compared to the first half of 2012.  

Looking forward, the Group has hedged its estimated net trading exposure to the Euro at 1 Euro = 85p from 1 April 2013 to 30 September 2013, and at 1 Euro = 87p from 1 October 2013 to 31 March 2014.

Dividend

The Directors have approved an interim dividend of 4.5 pence per share, an increase of 12% over the 2012 interim dividend of 4.0 pence, reflecting both the Group's strong performance to date and the Board's confidence in the Group's continued progress in the full financial year and beyond.  This dividend will be paid on 26 July 2013 to those shareholders on the register on 28 June 2013.  The Group remains committed to a progressive dividend policy, first announced at flotation in November 2003 and delivered in every year since then.

Operating Review

Translations

The Group's core patent translations business, which accounts for approximately 71% of Group sales, grew its revenues by 11% to £26.1 million (2012: £23.5 million) despite the anaemic growth rates prevailing in most of its markets.  The Group continues to enhance its market leadership with a worldwide blue-chip client base composed of many of the world's most active patent filers.  Our clients include 12 of the top 20 applicants at the World Intellectual Property Office and 14 of the top 20 applicants at the European Patent Office during 2012.  Significantly, in the first half of this financial year, both the development of relationships with clients won in 2012 and the transfer of translation business from the inovia foreign filing services have helped to drive revenues forward.  Those wins included our first two substantial Japanese corporates for international patent translations, an important breakthrough for future business in the country. We have continued to invest in our direct sales presence in the US, the largest potential market for intellectual property services, and whilst competition remains strong we are seeing some good opportunities.  Given strong demand for our patent translation services from European and North American corporates seeking to file patent applications in China, we have similarly invested in additional headcount in our Beijing office. Revenues in China grew 94% and profits grew 68%, demonstrating that RWS made a timely decision to establish operations in the country.  An additional welcome source of revenues in China has been our growing relationship with international patent bodies seeking translation of Chinese patent prosecution documents.  Our Japanese patent translation activities also grew strongly. Both of these entities benefit significantly from business referred by other Group companies.

Our commercial translations business, which accounts for approximately 22% of Group sales, saw revenues increase by 4% to £8.0 million (2012: £7.7 million).  This business includes all non-patent translations, a service sector which typically has greater exposure to competition and the economic cycle than patent related activities.  Our focus, therefore, remains upon specialist niches where more attractive margins are available. In the half year we have enjoyed particularly good results from our medical translation activities and were pleased to see a turnaround in our businesses located in German speaking Europe, following corrective action and investment in customer support software.

Information

Our information business accounts for 7% of Group sales and grew very modestly during the half year (from £2.5 million in H1 2012 to £2.6 million in H1 2013). High margin revenues from PatBase subscriptions have increased by 11%, reflecting the database's continued market share gains, and driven by the Group's ongoing investment in its searchability and geographical coverage.  The balance of information revenues are generated by our patent search and watch services, which have a greater sensitivity to the economic environment. As previously reported, demand has remained weak in this service line which accounts for just 2.5% of Group revenues but is a valuable additional service to many clients in the intellectual property sector.

Acquisitions

Progress on inovia Acquisition

In line with the Board's stated strategy, RWS announced on 11 October 2011 the acquisition of an initial one third interest in inovia Holdings Pty Limited ("inovia"), a leading provider of web-based international patent filing solutions, and an agreement to acquire the remaining share capital, for a maximum aggregate price of US$31.2m.

The total cash consideration comprises an initial payment of US$5.8 million (or £3.7 million) and deferred consideration for the remaining two thirds of the issued share capital, which will be calculated according to an agreed earnout formula and payable when we complete the acquisition, expected in September 2013. The earnout is based on three elements: inovia's sales, its EBITDA and the translation work it transfers to RWS.

For the year ended 30 June 2012, inovia's gross revenues were US$19.3m, an increase of 28% over 2011 and it achieved a maiden EBITDA of US$0.44m.  In the nine months to 31 March 2013 its gross sales amounted to US$18.2 million, a rise of 27.3% over the corresponding period in the prior year. 

The inovia team continues to deliver on its promise to exploit new commercial opportunities and collaboration initiatives, including the transfer of translations work between inovia and RWS. In the six months to March 2013, inovia directed translation orders to RWS resulting in sales of approximately £1.9 million, somewhat ahead of our initial expectations. 

Post Period Acquisition

On 1 May 2013, RWS acquired the whole of the issued share capital of PharmaQuest Limited ("PharmaQuest"), whose principal activity is the provision of high quality translation and linguistic validation of patient reported outcomes from global clinical trials, for a net cash consideration of £2.3 million.  PharmaQuest's adjusted profit before tax for the year ended 31 March 2013 was £0.6 million and the acquisition will be immediately earnings enhancing.

Market and Regulatory Update

Patent Filing Statistics

In March, the World Intellectual Property Office (WIPO) published figures showing a 6.6% increase in the 2012 PCT filings to 194,400 (2011: 182,379).  The European Patent Office (EPO) also published figures in January showing the total number of European patent filings increased by 5.2% to 257,744 (2011: 244,934).  Both the WIPO and EPO figures established new records for numbers of filings.

European Union Patent

We have in the past drawn the market's attention to the proposed European Union Patent ("the Unitary Patent") and its potential impact upon the Group's sales and profits.  Despite significant legal hurdles it now appears likely that the Unitary Patent will come into effect in late-2014, and that the first patents could be granted in 2015.  It should be noted that a number of member states of the current European Patent system are not EU members, and that Spain and Italy remain implacably opposed to the Unitary Patent. Professional opinion remains highly sceptical both as regards jurisdiction and the fee structure.

Because the proposed Unitary Patent will run in parallel with the existing system and will have a new and untried litigation system, our research indicates that there is currently little interest amongst large corporates and their professional advisers in using the new system.  That being the case, we anticipate minimal loss of revenues in the first few years after the introduction of the Unitary Patent.

People

I would like to thank our staff for their ongoing commitment to providing and maintaining the high levels of service expected by our clients.  Headcount has now reached 524 full time equivalents (2012: 485) and productivity continues to improve.

Directorate Change

RWS announced on 29 November 2012 that Mike McCarthy, who had served as Group Finance Director for 12 years, would retire on 31 December 2012.  We also announced that Richard Thompson had joined the Board and would be appointed as Group Finance Director with effect from 1 January 2013.

Current Trading and Outlook

We have had a strong start to the second half of the year. 

A combination of an encouraging pipeline in our core patent business, good momentum in the inovia business, the recent addition of PharmaQuest to our medical translations division and the continued weakness of sterling leave us confident of delivering strong progress in the remainder of the year.

Beyond the current year, we are well placed to continue increasing our share of the patent translation and intellectual property services market, and the completion of the inovia acquisition in September 2013 will further enhance our growth prospects.

Andrew Brode

Executive Chairman

10 June 2013

RWS Holdings plc
Condensed Consolidated Statement of Comprehensive Income
						Unaudited		Audited		Unaudited
						6 months ended		Year ended		6 months ended
						31 March 2013		30 September 2012		31 March 2012
				Note		£'000		£'000		£'000
Revenue						36,666		68,825		33,690
Cost of sales						(21,522)		(39,614)		(19,719)
Gross profit						15,144		29,211		13,971
Administrative expenses						(5,048)		(13,035)		(6,541)
Profit from operations						10,096		16,176		7,430
Analysed as:
Operating profit before charging:						10,436		16,773		7,710
Amortization of customer relationships and trademarks						(340)		(597)		(280)
Profit from operations						10,096		16,176		7,430
Finance income						78		405		427
Finance expense						(32)		(1)		-
Net finance income				3		46		404		427
Share in results of associate						107		18		(28)
Profit before tax						10,249		16,598		7,829
Taxation expense						(2,511)		(3,925)		(1,945)
Profit for the period						7,738		12,673		5,884
Other comprehensive income *
Exchange gain/(loss) on retranslation of foreign operations						269		(694)		(370)
Exchange loss on retranslation of associate operations						-		(135)		(108)
Total other comprehensive income/(expense)						269		(829)		(478)
Total comprehensive income						8,007		11,844		5,406
Total comprehensive income attributable to:
Owners of the parent						8,007		11,844		5,406
Basic earnings per Ordinary share (pence per share)				5		18.3		29.9		13.9
*Other Comprehensive Income includes only items that will be subsequently reclassified to Profit before tax when specific conditions are met.

RWS Holdings plc
Condensed Consolidated Statement of Financial Position
						Unaudited		Audited		Unaudited
						at		at		at
						31 March 2013		30 September 2012		31 March 2012
				Note		£'000		£'000		£'000
Assets
Non-current assets
Goodwill						14,329		14,053		12,913
Intangible assets						4,041		4,274		3,220
Property, plant and equipment						13,141		13,285		13,532
Investment in associate						4,452		4,345		4,327
Deferred tax assets						225		228		249
						36,188		36,185		34,241
Current assets
Trade and other receivables						14,666		14,612		14,021
Derivative financial instruments						228		260		366
Cash and cash equivalents				6		28,036		25,096		22,477
						42,930		39,968		36,864
Total assets						79,118		76,153		71,105
Liabilities
Current liabilities
Trade and other payables						8,116		8,015		8,267
Income tax payable						2,619		2,007		1,753
Put and call option liability						769		769		-
Provisions						336		336		336
						11,840		11,127		10,356
Non-current liabilities
Other creditors						100		100		769
Provisions						530		530		547
Deferred tax liabilities						1,116		1,167		941
						1,746		1,797		2,257
Total liabilities						13,586		12,924		12,613
Total net assets						65,532		63,229		58,492
Equity
Capital and reserves attributable to owners of the parent
Share capital						2,116		2,116		2,116
Share premium						3,583		3,583		3,583
Reverse acquisition reserve						(8,483)		(8,483)		(8,483)
Foreign currency reserve						1,750		1,481		1,832
Retained earnings						66,566		64,532		59,444
Total equity						65,532		63,229		58,492

RWS Holdings plc
Condensed Consolidated Statement of Changes in Equity
										Total equity
								Other		attributable
						Share	Share	reserves	Retained	to owners
						capital	premium	(see below)	earnings	of the parent
						£'000	£'000	£'000	£'000	£'000
At 30 September 2011 (audited)						2,116	3,583	(6,173)	58,532	58,058
Profit for the period						-	-	-	5,884	5,884
Currency translation differences						-	-	(478)	-	(478)
Dividends						-	-	-	(4,972)	(4,972)
At 31 March 2012 (unaudited)						2,116	3,583	(6,651)	59,444	58,492
Profit for the period						-	-	-	6,789	6,789
Currency translation differences						-	-	(351)	-	(351)
Dividends						-	-	-	(1,701)	(1,701)
At 30 September 2012 (audited)						2,116	3,583	(7,002)	64,532	63,229
Profit for the period						-	-		7,738	7,738
Currency translation differences						-	-	269	-	269
Dividends						-	-	-	(5,704)	(5,704)
At 31 March 2013 (unaudited)						2,116	3,583	(6,733)	66,566	65,532
								Reverse	Foreign	Total
								acquisition	currency	other
Other reserves								reserve	reserve	reserves
								£'000	£'000	£'000
At 30 September 2011 (audited)								(8,483)	2,310	(6,173)
Currency translation differences								-	(478)	(478)
At 31 March 2012 (unaudited)								(8,483)	1,832	(6,651)
Currency translation differences								-	(351)	(351)
At 30 September 2012 (audited)								(8,483)	1,481	(7,002)
Currency translation differences								-	269	269
At 31 March 2013 (unaudited)								(8,483)	1,750	(6,733)

RWS Holdings plc
Condensed Consolidated Statement of Cash Flows
						Unaudited		Audited		Unaudited
						6 months ended		Year ended		6 months ended
						31 March 2013		30 September 2012		31 March 2012
				Note		£'000		£'000		£'000
Cash flows from operating activities
Profit before tax						10,249		16,598		7,829
Adjustments for:
Depreciation of property, plant and equipment						307		593		293
Amortization of intangible assets						377		656		303
Finance income						(78)		(405)		(427)
Finance expense						-		1		-
Operating cash flow before movements
in working capital and provisions						10,855		17,443		7,998
(Increase)/decrease in trade and other receivables						(178)		63		468
Increase in trade and other payables						101		391		710
Cash generated from operations						10,778		17,897		9,176
Income tax paid						(1,945)		(4,297)		(2,488)
Net cash inflow from operating activities						8,833		13,600		6,688
Cash flows from investing activities
Interest received						127		98		65
Acquisition of subsidiary, net of cash acquired						-		(2,480)		-
Acquisition of share in associate						-		(3,693)		(3,693)
Purchases of property, plant and equipment						(148)		(363)		(302)
Purchases of intangibles (computer software)						(19)		(92)		(10)
Net cash (outflow)/inflow from investing activities						(40)		(6,530)		(3,940)
Cash flows from financing activities
Dividends paid						(5,704)		(6,673)		(4,972)
Net cash outflow from financing activities						(5,704)		(6,673)		(4,972)
Net increase/(decrease) in cash and cash equivalents						3,089		397		(2,224)
Cash and cash equivalents at the beginning of the period						25,096		24,845		24,845
Exchange loss on cash and cash equivalents						(149)		(146)		(144)
Cash and cash equivalents at the end of the period				6		28,036		25,096		22,477
Free cash flow
Analysis of free cash flow
Net cash generated from operating activities						10,778		17,897		9,176
Net interest received						127		98		65
Income tax paid						(1,945)		(4,297)		(2,488)
Purchases of property, plant and equipment						(148)		(363)		(302)
Purchases of intangibles (computer software)						(19)		(92)		(10)
Free cash flow						8,793		13,243		6,441

RWS Holdings plc

Notes to the Condensed Consolidated Financial Statements

______________________________________________________________________

1    Accounting policies

      Basis of preparation

      The interim financial statements were approved by the Board of Directors on 7 June 2013. The interim results for the half years ended 31 March 2013 and 31 March 2012 are neither audited nor reviewed by our auditors and the accounts in this interim report do not therefore constitute statutory accounts in accordance with Section 434 of the Companies Act 2006. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2012.

      The Group's statutory accounts for the year ended 30 September 2012 have been filed with the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain any statements under s498 (2) or (3) of the Companies Act 2006 and did not contain any matters to which the auditors drew attention without qualifying their report.

      The same accounting policies, presentation and methods of computation are followed in these condensed consolidated financial statements as were applied in the Group's latest annual audited financial statements except that in the current financial year, the Group has adopted a number of revised Standards and Interpretations. However, none of these has had a material impact on the Group's reporting.

__________________________________________________________________________________________________________

2    Segmental reporting

      The Group comprises two divisions, the Translation division (for management reporting analysed between UK and Overseas operations) providing patent and technical document translation, filing and localisation services in the UK, USA, Europe, Japan and China, and the Information division, which offers a full range of patent search, retrieval and monitoring services as well as an extremely comprehensive patent database service accessible by subscribers, known as PatBase.

      The unallocated segment relates to corporate overheads, assets and liabilities.

      The segment results for the six months ended 31 March 2013 are as follows:

			Translations	Translations
			UK	Overseas	Information	Unallocated	Group
			£'000	£'000	£'000	£'000	£'000
Revenue			28,813	5,240	2,613	-	36,666
Operating profit/(loss) before charging:			8,656	1,049	1,090	(359)	10,436
Amortization of customer relationships and trademarks			(268)	-	(72)	-	(340)
Operating profit/(loss)			8,388	1,049	1,018	(359)	10,096
Finance income							78
Finance expense							(32)
Share in results of associate							107
Profit before tax							10,249
Taxation							(2,511)
Profit for the period							7,738
Overseas intercompany sales to the UK amounting to £2.4 million are eliminated on consolidation.
Segment assets			56,512	5,617	5,805	6,732	74,666
Investment in associate			-	4,452	-	-	4,452
Total assets			56,512	10,069	5,805	6,732	79,118
Segment liabilities			7,281	1,684	2,732	1,889	13,586
Net assets			49,231	8,385	3,073	4,843	65,532

The segment results for the year ended 30 September 2012 were as follows:

				Translations	Translations
				UK	Overseas	Information	Unallocated	Group
				£'000	£'000	£'000	£'000	£'000
Revenue				53,250	10,596	4,979	-	68,825
Operating profit/(loss) before charging:				13,322	1,974	2,135	(658)	16,773
Amortization of customer relationships and trademarks				(549)	-	(48)	-	(597)
Operating profit/(loss)				12,773	1,974	2,087	(658)	16,176
Finance income								405
Finance expense								(1)
Share in results of associate								18
Profit before tax								16,598
Taxation								(3,925)
Profit for the year								12,673
Overseas intercompany sales to the UK amounting to £3.6 million were eliminated on consolidation.
Segment assets				49,081	5,310	4,527	12,890	71,808
Investment in associate				-	4,345	-	-	4,345
Total assets				49,081	9,655	4,527	12,890	76,153
Segment liabilities				7,237	1,728	1,970	1,989	12,924
Net assets				41,844	7,927	2,557	10,901	63,229

The segment results for the six months ended 31 March 2012 were as follows:

				Translations	Translations
				UK	Overseas	Information	Unallocated	Group
				£'000	£'000	£'000	£'000	£'000
Revenue				26,050	5,204	2,436	-	33,690
Operating profit/(loss) before charging:				6,373	650	1,052	(365)	7,710
Amortization of customer relationships and trademarks				(280)	-	-	-	(280)
Operating profit/(loss)				6,093	650	1,052	(365)	7,430
Finance income								427
Share in results of associate								(28)
Profit before tax								7,829
Taxation								(1,945)
Profit for the period								5,884
Overseas intercompany sales to the UK amounting to £1.4 million were eliminated on consolidation.
Segment assets				48,008	3,885	6,088	8,797	66,778
Investment in associate				-	4,327	-	-	4,327
Total assets				48,008	8,212	6,088	8,797	71,105
Segment liabilities				7,140	1,250	2,519	1,704	12,613
Net assets				40,868	6,962	3,569	7,093	58,492

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3    Finance income and expense

			6 months ended				Year ended			6 months ended
			31 March 2013				30 September 2012			31 March 2012
			£'000				£'000			£'000
Finance income
- Returns on short-term deposits			78				152			68
- Fair value of outstanding forward			-				253			359
foreign currency contracts
Finance expense
- Interest on deferred consideration			-				(1)			-
relating to an acquisition.
- Fair value of outstanding forward			(32)				-			-
foreign currency contracts
Net finance income					46			404		427

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4    Dividends

			6 months ended		Year ended		6 months ended
			31 March 2013		30 September 2012		31 March 2012
			pence		pence		pence
			per share	£'000	per share	£'000	per share	£'000
Interim paid July			-	-	4.02	1,701	-	-
Final paid February			13.48	5,704	11.75	4,972	11.75	4,972
Dividends paid to shareholders			13.48	5,704	15.77	6,673	11.75	4,972
An interim dividend of 4.50 pence per Ordinary share will be paid on 26 July 2013 to Shareholders on the register at 28 June 2013. This dividend, declared by the Directors after the balance sheet date, has not been recognised in these financial statements as a liability at 31 March 2013. The interim dividend will reduce shareholders' funds by an estimated £1.9 million.

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5    Earnings per Ordinary share

The Group shows both a basic and adjusted earnings per share figure as the Directors believe that this information will be of interest to the users of the accounts in measuring the Group's performance and underlying trends.

			6 months ended			Year ended		6 months ended
			31 March 2013			30 September 2012		31 March 2012
			Earnings		EPS	Earnings	EPS	Earnings	EPS
			£'000		Pence	£'000	Pence	£'000	Pence
Profit for the period			7,738		18.3	12,673	29.9	5,884	13.9
Amortization of customer relationships
and trademarks (after tax)			257		0.6	460	1.1	207	0.5
Adjusted earnings			7,995		18.9	13,133	31.0	6,091	14.4
Basic earnings per share are based on the post-tax profit for the period and a weighted average number of Ordinary shares in issue during the period calculated as follows:

			Number of shares		Number of shares		Number of shares
			6 months ended		Year ended		6 months ended
			31 March 2013		30 September 2012		31 March 2012
Weighted average number of Ordinary
shares in issue for basic earnings			42,315,968		42,315,968		42,315,968

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6  Cash and cash equivalents	at		at		at
	31 March 2013		30 September 2012		31 March 2012
	£'000		£'000		£'000
Cash at bank and in hand	23,032		14,241		11,369
Short-term deposits	5,004		10,855		11,108
Cash and cash equivalents in the cash
flow statement	28,036		25,096		22,477

Short-term deposits includes deposits with a maturity of three months or less, or deposits that can be readily converted into cash. The fair value of these assets supports their carrying value.

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7    Events since the reporting date

      On 30 April 2013 the Group acquired the entire issued share capital of Pharmaquest Limited for a net cash consideration of £2,289,000.

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END

 

 

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