RWS makes 'significant' progress as it integrates SDL

Content and localisation company RWS reported a year of “significant” progress on Tuesday, with revenue rising 95% year-on-year to £694.5m.

The AIM-traded firm said its organic constant currency revenue growth, meanwhile, came in at 4% for the 12 months ended 30 September.

Its profit before tax slipped 6% year-on-year to £55m, while its adjusted profit before tax was 66% firmer at £116.4m.

Basic earnings per share were 36% lower year-on-year at 10.9p, while adjusted basic earnings per share were 20% firmer at 23.8p.

The company’s board proposed a final dividend of 8.5p for the year, taking the total distribution to 10.5p for the 12 months - both up 17% on the 2020 financial year.

At period end, the company recorded net cash of £43.5m, swinging from net debt of £15.1m at the end of the prior financial period.

Looking ahead, RWS said it was now focused on capitalising on its expanded scale, footprint and capabilities, to drive sustainable organic growth from an efficient cost base.

The board said trading remained in line with expectations, driven by continued organic revenue growth at constant currency, as well as “significant” further operating margin expansion as it realised full-year synergies efficiencies following the acquisition of SDL.

It said the firm’s strong cash generation and balance sheet supported its plans to invest for growth, including in software and internal systems, and in selective acquisitions to enhance its capabilities and geographical reach.

“The group has delivered a strong set of results against the background of the Covid-19 pandemic and integrating SDL,” said chief executive officer Ian El-Mokadem.

“I am proud of the manner in which our world-wide team has continued to provide our products and services to the high-quality standards expected by our broad range of world leading clients.

“All our divisions grew revenues on an organic constant currency basis and we are particularly pleased with the pace and effectiveness of our integration of SDL, which contributed to a better than expected profit performance.”

El-Mokadem said current trading was in line with full-year expectations, adding he was “confident” that RWS was now in a stronger position, with a team in place to drive the business forward and build on its leadership position in “growing, fragmented” markets.

“With a healthy balance sheet to support the group's strategy, I am excited about the plans we are developing to build on RWS's longstanding track record of delivery, as we capitalise on the group's expanded scale, footprint and capabilities following the acquisition of SDL.

“Our expectations for the full year remain unchanged.”

RWS said it would issue a further update on its medium-term growth strategy and investment plans at a capital markets day next March.

At 1032 GMT, shares in RWS Holdings were down 5.4% at 596p.