RWS shares surge as board flags stellar year

Intellectual property support services provider RWS Holdings posted an update on trading for the year to 30 September on Tuesday, ahead of the announcement of its full year results in December.

The AIM-traded company said it has enjoyed its “best year ever”, and the board expected group revenues to be no less than £122m, compared to £95.2m in 2015.

It said the strong performance was driven by the core translations activities, an excellent eleven-month contribution from the newly-acquired CTi, and an improving currency environment.

Adjusted profit before tax was expected to be at least £30.5m, up from £22.7m, which the board said reflected the benefits of improved gross margins, the CTi acquisition and currency tailwinds.

The firm’s core translation business made significant progress, with PatBase continuing to perform well, growing by a further 7%, and China, Japan and Switzerland reportedly delivering strong performances.

RWS's financial position also continued to strengthen with shareholder funds expected to be approximately £107m.

The group raised a five-year term loan of $45m to part fund the CTi acquisition but, as a result of the group's strong cash generation, net debt reduced to £1.5m as at 30 September.

Its directors anticipated that RWS's strong finances will underpin both its current acquisition strategy as well as its progressive dividend policy, with the final dividend payable to shareholders in February 2017.

“RWS has performed exceptionally well despite a low-growth world economic environment, and we are delighted with the performance of our latest acquisition, CTi,” said chairman Andrew Brode.

“Following the CTi acquisition, we have a broader base of market leading businesses from which we intend to expand profitably, particularly in life sciences, and we are encouraged by the opportunities we are seeing across the business.

“Our strong cash generation and resultant financial position leave us well placed to continue to selectively review a healthy pipeline of potential acquisitions as well as continuing our progressive dividend policy,” Brode added.

At 1351 BST, shares in RWS Holdings were up 12.21% at 282.5p.