Half Year Trading Statement

RNS Number : 2760J

RWS Holdings PLC

26 April 2022

 

For immediate release                                                                                                                                                    26 April 2022

RWS Holdings plc

Half Year Trading Statement

RWS Holdings plc ("RWS" or "the Group"), a unique world-leading provider of technology-enabled language, content and intellectual property services, today provides an update on trading for the six months ended 31 March 2022 ("the first half"), ahead of the announcement of its interim results on 9 June 2022.

RWS has delivered a robust first half and we expect to report adjusted profit before tax¹ of at least £60m, slightly above plan, compared with £50.5m in the comparative six month period. This improvement reflects the full year effect of synergies following the acquisition of SDL plc ("SDL") in November 2020, as well as margin benefits from increasing volumes through Language Experience Delivery ("LXD"), our Group-wide production platform. We expect the Group's profit performance will be in line with our expectations for the full year.

Revenues in the first half were £357.3m, compared with £326.4m in the prior year period, reflecting a full six month contribution from the acquisition of SDL and some modest FX headwinds. Underlying organic constant currency ("OCC")² growth across the Group was 1%, with growth in Regulated Industries, Language Services and Language & Content Technology ("L&CT") more than offsetting weakness in IP Services.

The Regulated Industries division has continued to perform well, with particularly strong growth in its Linguistic Validation segment. In Language Services we have seen underlying OCC² growth, with encouraging performance in the strategic solutions segment. Within the L&CT division, we saw solid growth in the first half despite a faster-than-anticipated change in mix towards SaaS revenues. As previously announced, the IP Services division is seeing some weakness in demand resulting from the impending introduction of the Unitary Patent and recorded a decline in revenue on an OCC² basis of 8% (broadly in line with our most recent guidance), compared with overall growth of 3% across the other three divisions on the same basis.

Cash generation remains strong and the Group had net cash³ of 38m on 31 March 2022, after the recent £33m payment of the Group's final dividend for FY21 and the   €17.5m initial cash consideration for the acquisition of Liones Holding BV ("Fonto") in March 2022.

While the average exchange rate for US Dollars to Sterling in the first half was broadly unchanged compared with the prior period, there was a strengthening of Sterling against the Euro which gave rise to a modest FX headwind in the first half. 

Ian El-Mokadem, CEO of RWS, commented:

"As outlined at our recent Capital Markets Day, we are focused on the actions and investments which support our medium-term strategy and five year accelerated growth plan.

"We are excited about the benefits from the SDL acquisition and the progress we are making through our LXD platform, which harnesses our scale and presents a strong operational leverage opportunity.  There are clear advantages from owning a unique suite of technology and AI products alongside the wide range of language service solutions that the Group offers to its diverse, global client base. We are investing in these products as part of our strategy, confident that technology is at the heart of further deepening our long-term client relationships and delivering accelerated organic growth.

"With the benefit of our strong balance sheet, we continue to explore selective acquisitions to complement our organic growth initiatives. As part of our commitment to developing our portfolio, we welcomed the Fonto team into the Group in March and have started the process of integrating the business.

"We remain confident that we are on track to deliver further progress and good margin improvement in FY22."

1.  Calculated before amortisation of acquired intangibles, acquisition costs, share-based payment expenses and exceptional items.

2.  OCC excludes the impact of acquisitions and assumes constant currency.

3.  Net cash comprises cash and cash equivalents less loans but before deducting lease liabilities.

For further information, please contact:

RWS Holdings plc Andrew Brode, Chairman Ian El-Mokadem, Chief Executive Officer Rod Day, Interim Chief Financial Officer	01753 480200
MHP (Financial PR advisor) Katie Hunt / Simon Hockridge	[e-mail] 020 3128 8100
Numis (Nomad & Joint Broker) Stuart Skinner / Kevin Cruickshank / Will Baunton	020 7260 1000
Berenberg (Joint Broker) Ben Wright / Toby Flaux / Alix Mecklenburg-Solodkoff	020 3207 7800

About RWS:

RWS Holdings plc is a unique, world-leading provider of technology-enabled language, content and intellectual property services. Through content transformation and multilingual data analysis, our unique combination of technology and cultural expertise helps our clients to grow by ensuring they are understood anywhere, in any language.

Our purpose is unlocking global understanding. By combining cultural understanding, client understanding and technical understanding, our services and technology assist our clients to acquire and retain customers, deliver engaging user experiences, maintain compliance and gain actionable insights into their data and content.

Our clients include 90 of the world's top 100 brands, the top 20 pharmaceutical companies and 19 of the top 20 patent filers. Our client base spans Europe, Asia Pacific and North and South America. We work in the automotive, chemical, financial, legal, medical, pharmaceutical, technology and telecommunications sectors, which we serve from 80+ global locations across five continents.

Founded in 1958, RWS is headquartered in the UK and publicly listed on AIM, the London Stock Exchange regulated market (RWS.L).

For further information, please visit: www.rws.com.

 

END

 

 

TSTSESFWIEESEIL