Year End Trading Statement

RNS Number : 2106U

RWS Holdings PLC

12 October 2010

 



For immediate release                                                                                              12 October 2010

RWS Holdings plc

Year End Trading Statement

RWS Holdings plc (RWS), Europe's leading provider of intellectual property support services (patent translations and searches) and technical translations, today provides an update on trading for the year ended 30 September 2010 ahead of the announcement of its final results, which is expected on 14 December 2010.

Group trading has continued in line with our expectations for the year.  RWS will achieve at least an 8.5% increase in revenue to approximately £60 million, ahead of market consensus, reflecting significant organic growth primarily in the Group's core patent translations and intellectual property support services offerings.  Profits are expected to be in line with market consensus, despite the impact of the relative weakness of the Euro during the year. Patent translations, which accounts for approximately 70% of group revenues, continued to build upon its market leadership with significant new clients during the year, whilst our intellectual property services business benefitted from unexpectedly strong demand for its search and documentation services combined with further growth in subscriptions to PatBase.  As previously reported, technical translations has experienced a more challenging environment during the year, especially in Germany, albeit there are signs of stabilisation in its markets.

RWS' stated strategy is focused upon organic growth complemented by deploying its significant cash resources for selective acquisitions, providing they can be demonstrated to enhance shareholder value.  We advanced a number of opportunities during the period but, in applying our acquisition criteria, we were ultimately not willing to match price expectations.  

RWS completed the purchase of its new headquarters building on 2 July 2010.  Due to a delay in the practical completion of this purchase, we have taken a decision to complete the move in late December in order to minimise disruption.  The move will consolidate four offices into one following which RWS will benefit from rental savings and increased operational efficiencies.

Looking forward, RWS has hedged approximately 30% of its budgeted US$ exposure at $1.485 per £ until September 2011.  More importantly, RWS was able to take advantage of the late September rebound in the Euro to hedge all remaining Euro trading exposure to September 2011. The average rate for 2010/11 is therefore 86.68 pence per Euro.

The RWS balance sheet has continued to strengthen, with shareholder funds in excess of £51 million and net cash of £17 million before accounting for the imminent recovery of the VAT on the purchase of the new building of £1.6 million. This significant cash resource is a key factor in negotiating acquisitions given the reluctance of banks to lend. The Group's robust balance sheet underpins the ability to increase the final dividend for shareholders, payable in February 2011.

Andrew Brode, Executive Chairman, commented:

"In a financial year not without its challenges, particularly for organic growth, RWS has achieved further record sales, demonstrating the strength and resilience of its core patent translations business.  In the medium term, the Group remains well positioned to grow its market share in the worldwide patent translations market and to benefit from a recovery in the technical translations market."

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For further information contact:

RWS Holdings plc

Andrew Brode, Executive Chairman                                                                               01753 480200

MHP Communications

Katie Hunt/Simon Hockridge                                                                                        020 3128 8100

Numis

Stuart Skinner (Nominated Adviser)                                                                              020 7260 1000

James Serjeant (Corporate Broker)

About RWS:

RWS is Europe's leading provider of intellectual property support services (patent translations and technical searches) to the medical, pharmaceutical, chemical, aerospace, defence, automotive, electronics and telecoms industries.  RWS also provides specialist technical, legal and financial translation services for areas of industry outside the patent arena.  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).

Approximately 1,000,000 patent documents are published per annum, 200,000 of which are published in Europe (Source; European Patent Office) and the intellectual property market has shown significant growth in recent years, with patent applications in Europe having doubled over the last ten years.

For further information please visit: www.rws.com

 

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