We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Rws Holdings Plc | LSE:RWS | London | Ordinary Share | GB00BVFCZV34 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.60 | 0.99% | 163.80 | 163.40 | 164.60 | 165.00 | 159.00 | 162.80 | 233,479 | 09:25:30 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Business Services, Nec | 733.8M | -27.7M | -0.0738 | -21.95 | 607.78M |
From Apr 2019 to Apr 2024
TIDMRWS
RNS Number : 4877Y
RWS Holdings PLC
06 December 2017
For immediate release 6 December 2017
RWS Holdings plc
Results for the year ended 30 September 2017
An outstanding year, strengthening our leading position in Life Sciences
RWS Holdings plc ("RWS", "the Group"), one of the world's leading language and intellectual property support services providers, today announces its final results for the year ended 30 September 2017.
Financial Highlights:
Delivered record revenues and profits
-- Sales increased by 34.4% to GBP164.0m (2016: GBP122.0m)
o 8% organic growth, excluding acquisitions and currency movements
-- Adjusted operating profit* was up 35.6% to GBP43.4m (2016: GBP32.0m) -- Adjusted profit before tax* rose by 41.5% to GBP43.3m (2016: GBP30.6m)
o Reflects 18% organic profit growth, 7% positive exchange rate movements and 16% from LUZ and CTi acquisitions net of associated loan interest costs
-- Reported profit before tax was up 35.1% to GBP33.9m (2016: GBP25.1m) -- Adjusted earnings per share* of 14.3p (2016: 10.9p), an increase of 31.2% -- Basic earnings per share of 11.0p (2016: 9.0p), an increase of 22%
-- Final dividend of 5.20p (2016: 4.45p); total dividend increased by 16.1% to 6.5p (2016: 5.6p), continuing an unbroken series of dividend increases since flotation in 2003
-- Net debt at year end of GBP20.2m (2016: GBP1.5m), after the GBP74.8m cost of the acquisitions of LUZ and Article One Partners "AOP" and the GBP40.0m gross proceeds from the placing in February 2017.
* RWS uses adjusted results as key performance indicators as the directors believe that these provide a more consistent measure of operating performance by adjusting for acquisition related charges and significant one-off or non cash items. Adjusted operating profit is stated before interest, amortisation of intangibles, share option costs and acquisition related charges. Adjusted profit before tax is stated before amortisation of intangibles, share option costs and acquisition related charges.
Operational Highlights:
Excellent organic progress and further acquisition in Life Sciences
-- Group gross margin improved by a further 96 basis points to 43.75% after significant gains in 2016
-- Excellent growth recorded by patent translations activities in all geographies
-- Patent search activities enjoyed their best-ever results; PatBase subscription revenues grew by 20.5%
-- Acquired LUZ, a leading US-based translation company focusing exclusively on life sciences translation, in February 2017:
o Provided Group with a full service offering in life sciences, enhanced market share and a US West Coast presence
o Excellent seven and a half months' contribution
o Integration with CTi to form RWS Life Sciences division completed
-- Acquired Article One Partners, an IP information business with an online crowdsourced research platform based in the United States, in September 2017
-- Strengthened the management team and Board with the appointments of Richard Thompson as Chief Executive Officer, Desmond Glass as Chief Financial Officer and Lara Boro as a Non-Executive Director
Earnings enhancing acquisition and placing post period end:
-- Completed the acquisition, on 3 November 2017, of Moravia, a leading provider of technology-enabled localisation services to some of the largest technology companies in the world
-- Strengthens RWS's global presence with an EU base and operations in the USA, Japan, China, Argentina, Hungary and Ireland
-- Cash consideration of US$320m funded by a placing of GBP185m of new shares and a new five-year US$160m bank facility which included the Group's existing borrowings
Outlook:
-- The Group has made a strong start in the first two months of the new financial year, in line with our expectations that we will continue to build upon the record levels established in 2017
-- RWS now possesses an outstanding global platform, which will enable it to develop sales opportunities in multiple geographies, with a complete range of language management services and technology offerings
Andrew Brode, Chairman of RWS, commented:
"RWS has delivered outstanding results, establishing new records for revenues, profits and the proposed dividend.
"We are particularly encouraged by the performance of LUZ post acquisition and its successful integration with CTi to form RWS Life Sciences, our market leading life science translations and linguistic validation division.
"The post year-end acquisition of Moravia is transformational for RWS, significantly strengthening the Group's global presence and firmly establishing the Group as one of the world's leading language services providers. We look forward to working with the Moravia team as it builds upon its strong industry reputation and growth track record. We are confident that we can build on our considerably broader global platform by developing the opportunities afforded by our extended geographical reach and expanded range of language services and technology offerings."
A meeting for analysts will be held today at 9.30am at the offices of MHP, 6 Agar Street, London WC2N 4HN. Please contact MHP by emailing rws@mhpc.com if you would like to attend.
For further information contact:
Hot Features
Premium
RWS Holdings plc
Andrew Brode, Chairman
Richard Thompson, Chief
Executive Officer 01753 480200
MHP Communications
Katie Hunt / Simon Hockridge 0203 128 8100
rws@mhpc.com
Numis
Stuart Skinner / Kevin Cruickshank (Nominated
Adviser) 0207 260
Michael Burke (Corporate Broker) 1000
About RWS:
RWS is the world's leading provider of intellectual property support services (patent translations, international patent filing solutions and searches), a market leader in life sciences translations and linguistic validation, a leading localisation provider, and a high level specialist language service provider in other technical areas, providing for the diverse needs of a blue-chip multinational client base from Europe, North America and Asia. RWS is based in the UK, with offices in Europe, the USA, China, Japan, Latin America and Australia, and is listed on AIM, the London Stock Exchange regulated market (RWS.L).
For further information, please visit: www.rws.com
This announcement contains inside information, which is disclosed in accordance with the Market Abuse Regulation, which came into effect on 3 July 2016.
Forward looking statements
This announcement contains certain statements that are forward-looking statements. They appear in a number of places through this announcement and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this document and, unless otherwise required by applicable law, the Company undertakes no obligation to update or review these forward-looking statements. Nothing in this announcement should be construed as a profit forecast. The Company and its directors accept no liability to third parties in respect of this document save as would arise under English law.
Chairman's Statement
I am pleased to report that RWS has delivered its best year ever despite a far from robust global economic backdrop. For the fourteenth consecutive year since listing on AIM in November 2003, we have achieved growth in sales, profits and dividends, testimony to the strength of our market positions in patent translations, intellectual property services and life sciences services. We have continued to invest in those resources which can deliver future expansion, and in particular we have made three acquisitions which position the Group as one of the major global providers of language services with a focus on the specialist and growing intellectual property (IP), life sciences and technology markets.
Results and Financial Review
The Group has achieved further significant progress in underlying operational performance, reflecting exceptional growth in the core patent translations business, in the information business including PatBase, and in China. The life sciences activities were strongly enhanced by the February 2017 acquisition of LUZ, whose maiden contribution exceeded our expectations. There was a further material improvement in Group gross margins, building upon the increase delivered in 2016.
Group sales advanced by 34% to GBP164.0m (2016: GBP122.0m). Adjusted operating profit before amortisation of intangibles, share option costs and acquisition costs increased by 36% to GBP43.4m (2016: GBP32.0m).
Adjusted profit before tax, amortisation of intangibles, share option costs and acquisition expenses increased by 41.5% to GBP43.3m (2016: GBP30.6m). This drove an increase of 31% in adjusted earnings per share to 14.3p (2016: 10.9p).
Reported profit before tax was GBP33.9m (2016: GBP25.1m). This result reflected a significant increase in amortisation of intangibles largely driven by the acquisitions of CTi and LUZ, to GBP6.6m (2016: GBP4.6m). Basic earnings per share were 11.0p (2016: 9.0p) a rise of 22.2%. The Group's effective tax rate was 27.5% (2016: 22.9%), reflecting the increase in the proportion of revenues from the US.
As at 30 September 2017, shareholders' funds had reached GBP158.9m (2016: GBP108.7m). Net debt at 30 September 2017 amounted to GBP20.2m (2016: GBP1.5m) reflecting the Group's continued strong underlying cash generation before the significant cash outlays during the year including GBP74.8m in respect of the LUZ and AOP acquisitions, dividends of GBP12.6m and corporation tax payments of GBP9.7m. The share placing in connection with the LUZ acquisition raised gross proceeds of GBP40.0m.
Currency Effects and Hedging
This financial year saw no let-up in volatility in global currency markets. Political developments in Europe and North America contributed to this volatility. RWS is strongly export-centric and over 85% of its revenues are non-sterling, with its principal exposures being to the Euro and US Dollar. The Group's estimated net exposure to the Euro has been hedged at an average rate of 1 Euro = 90p for the whole of the year to 30 September 2018, a significantly more favourable rate than 2017's hedges. Exposure to the US Dollar is more balanced as the Group has dollar debt and dollar revenues.
Acquisitions of a Market Leader in Life Sciences and Cutting Edge IP Information Business
LUZ
The Group announced on 14 February 2017 that it had acquired the entire issued share capital of LUZ, Inc. for a cash consideration of US$82.5m. This acquisition was in line with our stated strategy of complementing organic growth with selective acquisitions providing growth potential in attractive sectors and/or geographies, offering excellent margins and enhanced shareholder value.
The acquisition of LUZ established a significant Group presence on the important West Coast of the USA, and a principal building block in the formation of the new RWS Life Sciences division, following integration with CTi. LUZ specialises in medical device and regulatory translations, complementing the linguistic validation and medical specialisms of CTi.
Funding for the acquisition was via a combination of a GBP40.0m share placing, an increase in the US$ five-year term loan provided by Barclays and internal cash resources.
The acquisition of LUZ has been immediately earnings enhancing. LUZ has performed exceptionally well in the seven and a half months since it has been a member of the Group, achieving revenues of GBP17.4m and operating profit of GBP5.5m during that period.
Article One Partners
At the end of September 2017, the Group acquired the entre issued share capital of Article One Partners, LLC ("AOP") for a cash consideration of US$8m. AOP is a cutting-edge IP information business based in the USA.
AOP's online crowdsourcing platform links its corporate clients with over 42,000 researchers globally to provide them with access to IP intelligence that informs their litigation, licensing, patent enforcement and IP acquisition strategies. The acquisition of AOP will be highly complementary to RWS's existing patent information business and PatBase offering. AOP's revenues in calendar 2016 were US$3.7m, and it is expected to be earnings neutral in RWS's 2018 financial year, with its performance in its early days as part of the Group having been in line with expectations.
Dividend
I am pleased to announce that the Board has recommended a final dividend of 5.2p per share. The interim dividend, paid in July, was 1.3p per share, so the total payout in respect of the year will amount to 6.5p per share, an increase of 16% over 2016. This reflects the significant earnings growth during 2017 and the Board's confidence in the Group's continued progress. This payout proposal marks a fourteen-year unbroken record of dividend increases since flotation in November 2003.
The proposed total dividend is 1.7 times covered by basic earnings per share. Subject to shareholder approval at the Annual General Meeting, the final dividend will be paid on 23 February 2018 to all shareholders on the register at 26 January 2018. The shares will trade ex-dividend on 25 January 2018.
Share Option Plan
RWS announced on 4 April 2013 that the Board had approved a share option plan for executive directors and senior managers, under which options would be granted over ordinary shares representing up to a maximum of 4% of the Group's share capital. The plan is designed to further align the interests of senior employees with shareholders and to promote the retention of the Group's senior executives.
Options over 4% of the Group's share capital were issued to ten participants, with a subscription price of 129.2p per share. The earliest vesting date was 3 April 2015 and the latest exercise date is 3 April 2021. A total of 1,475,275 options were exercised during the year.
Board Changes
In January 2017, we announced that Richard Thompson would be appointed as Chief Executive Officer with effect from 1 April 2017, succeeding Reinhard Ottway who had decided to retire. Richard had joined RWS in 2012 as Chief Financial Officer and, following a successful three years in that position, took on the broader role of Deputy Chief Executive Officer from December 2015 when he successfully spearheaded the acquisition and integration of CTi into the Group.
On behalf of the Board, I would like to reiterate our sincere thanks to Reinhard for his invaluable contribution to the business over the past 23 years.
In August 2017, we announced the appointment of Desmond Glass as Chief Financial Officer. He brings almost 20 years' experience in senior finance roles across a range of sectors in UK and US headquartered businesses with international operations. He joined us in November 2017 from GAN plc, the AIM listed internet gaming software company, where he held the role of Chief Financial Officer for nine years.
In August 2017, we also announced the appointment of Lara Boro as an Independent Non-Executive Director with effect from 20 September 2017. Lara is currently a Group Managing Director with Informa, the FTSE 100 global B2B media company, where she heads up the Life Science, TMT and Transportation businesses within the Business Intelligence division.
At the same time, the Group announced that Peter Mountford would step down from his role as Non-Executive Director with effect from 30 September 2017. Peter has served on the RWS Board since the IPO in November 2003 and has made a valuable contribution to the Group and its progress as a listed company.
Following these changes, David Shrimpton, Senior Independent Non-Executive Director and Deputy Chairman, now chairs the Audit Committee, Liz Lucas, Non-Executive Director, chairs the Remuneration Committee and Lara Boro has joined both the Audit and Remuneration Committees.
Post Year End - Acquisition of Moravia
The Group announced on 18 October 2017 that it had agreed to acquire all of the issued share capital of the Moravia IT Group of companies ("Moravia") for a cash consideration of US$320m. Following the receipt of US antitrust approval, the acquisition was completed on 3 November 2017.
Moravia is a leading provider of technology-enabled localisation services, headquartered in Brno in the Czech Republic with operations in the USA, Japan, China, Argentina, Hungary and Ireland. Localisation is the adaptation of content, software, websites, applications, marketing materials and audio/video for hundreds of languages and geographies, to ensure brand consistency for companies growing globally.
Moravia's revenues are derived from major corporates principally based on the West Coast of the USA, and include many of the largest publicly traded technology companies in the world. It has c.1,200 employees plus access to a large network of specialist linguists.
Moravia is a highly successful business with a track record of profitable and cash generative growth. Between 2014 and 2016 it achieved compound annual growth rates in revenue of 26% to US$159m and in adjusted earnings before interest, tax, depreciation and amortisation increased of 53% CAGR to US$27m.
The acquisition of Moravia significantly strengthens the Group's global presence; provides excellent potential cross-selling opportunities for patent translation services; further diversifies risk by adding a third market leading business of scale; and positions the Group as one of the world's leading providers of language management services.
The Group expects the Moravia acquisition to be immediately and highly earnings enhancing. Funding for the acquisition was via a combination of a placing of GBP185m of new shares, and a new five-year US$160m syndicated bank facility, which included the Group's existing borrowings.
We are in the process of onboarding Moravia which will be operated as an autonomous division, reporting in to the Board, replicating the successful creation of our Life Sciences division (following the acquisitions of CTi and LUZ), and providing three divisions of scale in attractive global markets, all with strong track records of profitable, cash generative growth.
People
The Group's activities are labour intensive and therefore highly reliant upon the skills, dedication and passion of all of our staff, who are required to meet the demands for excellent quality and timely delivery required by our clients. Group headcount reached 908 full time equivalents (2016:792) at the year-end. The Moravia acquisition will add approximately 1,200 new Group employees.
On behalf of the Board, I would like to place on record my thanks to all of our valued employees for their contribution throughout the year.
Corporate Social Responsibility
RWS has always sought to be a socially responsible Group, which has a positive impact on the communities it operates in. We look to employ colleagues who reflect the diversity of the Group's communities.
No discrimination is tolerated, and we endeavour to give all employees the opportunity to develop their capabilities. We provide an excellent working environment, the latest technology and appropriate training.
RWS' staff contribute generously on a monthly basis to a wide selection of local and national charities chosen by the staff, and their contributions are matched by the Group.
Current Trading and Outlook
The Group has made a strong start to the new financial year, benefiting from underlying growth in revenues and better gross margins.
The Board believes that the Group now possesses an outstanding global platform, which will enable RWS to develop sales opportunities across multiple geographies and industry verticals. We have built a significant presence in the USA and expect this to be a major driver of Group revenues and profits.
Andrew Brode
Chairman
6 December 2017
Strategic Report
Business Model
RWS is one of the world's leading language solutions providers, focusing on key market segments where the quality of its services is of critical importance to its customers. The Group has a blue chip multinational client base spanning Europe, North America and Asia that is particularly active in the medical, pharmaceutical, chemical, automotive and telecoms industries.
Following the acquisition of Moravia, the Group now operates five divisions, as follows:
-- RWS Patent Translations and Filing is the world's premier supplier of patent translations and filing solutions and currently accounts for 60% of Group revenue. RWS differentiates itself from the competition through the quality of its translations, its high level of Intellectual Property (IP) expertise and customer service and the use of its international web based patent filing platform, 'inovia'. Uniquely the business employs over 100 full time, highly qualified translators.
-- RWS Life Sciences focuses solely on the language service needs of the life sciences market, providing technical translations and linguistic validation to large pharmaceuticals and clinical research organisations in North America and Europe. This division includes both the CTi and LUZ businesses, which were fully integrated as one business with effect from 1(st) October 2017.
-- RWS Patent Information 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 as an annual subscription service. The results of the recently acquired AOP business will be included within this division.
-- RWS Language Solutions (formerly "Commercial Translations") has a particular emphasis on technical translations.
-- Going forward, the Moravia business will be operated and managed as a standalone division.
Our Strategy
RWS's objective is to increase shareholder value by growing the Group's revenue and profit before tax.
Our strategy to achieve this is focused on providing an increasing range of complementary specialist translation and language services to existing and new customers, driving organic growth. This is supplemented by selective acquisitions, providing these are complementary to our existing business and enhance shareholder value.
Organic growth is driven by:
-- increases in the worldwide patent filing activities of existing and potential multinational clients
-- the development of new drugs by the pharmaceutical industry
-- the outsourcing by corporates, clinical research organisations, law firms and attorneys of all or part of their foreign patent search, filing, translation and linguistic validation processes
-- the growing demand for language services through globalisation
-- the Group's ability to attract new clients by its leading position and reputation, in an otherwise fragmented sector, with whom activity levels typically build up over time
-- the Group's ability to expand in new or existing but growing geographies
-- increasing market share, particularly in patent translation, life sciences, and localisation
-- the retention of our client base, which includes a large share of the top 20 patent filers both in Europe and globally, many of which will use the Group for substantially all of their patent translation requirements
In terms of acquisitions to further accelerate growth, we continue to search for selective potential acquisitions in the IP support services and specialist translation spaces. We seek businesses capable of delivering above industry average levels of profitability or highly complementary businesses capable of reinforcing the Group's dominant position in intellectual property support and language services.
We are particularly pleased to be able to show our progress against these stated objectives with 14 straight years of sales and profit growth since flotation.
Year ended 30 Sep 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 --------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------ ------ Revenue (GBPm) 27.3 31.0 35.9 40.8 46.2 54.1 55.7 60.6 65.4 68.8 77.4 93.6 95.2 122.0 164.0 --------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------ ------ PBT Adj (GBPm) 5.6 6.0 7.4 9.0 11.0 13.9 14.5 14.6 16.2 17.2 21.0 22.1 22.7 30.6 43.3 --------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------ ------
Operating Review
RWS Patent Translation and Filing
The Group's patent translation and filing business represented 60% of Group sales in the year and grew revenues by 23% to GBP97.8m (2016: GBP79.4m). This performance reflects earlier client wins, strong organic growth from the established client base, especially for our Eurofile offering, and further strong growth in China. The macroeconomic backdrop delivered further grounds for confidence with record numbers of new patent applications in 2016.
The Group has maintained its market leadership and it now services nine of the top 20 applicants at the World Intellectual Property Office and 12 of the top 20 applicants at the European Patent Office in 2016.
The US and European sales teams continue to develop opportunities with large international patent filers across the Group's full suite of IP services, which are expected to benefit 2018. In Asia, we are making good progress with our strategy to target Japanese and Chinese international filers for our patent translation and filing services.
China continues to attract North American and European patent filers seeking patent protection there, which has driven our headcount in China to 87 employees (2016: 70). In particular, the RWS China team is successfully developing business with local patent attorneys who require high quality patent translations into Chinese for foreign filers in China.
We continue to expand our operations from three offices: Beijing, Xian and Rijhao. These centres enable the Group to expand its offering by combining lower cost centres with an operation in Beijing, enabling us to be close to our clients. We have also expanded and extended our long-term relationships with international patent bodies seeking to enlarge their collections of translated Chinese patent prosecution documents.
RWS Patent Information
The information business accounted for 5% of Group sales during the year and reported revenues up 20% to GBP7.7m (2016: GBP6.4m) reflecting strong growth in the search business (up 22%) due to client wins and a good flow of regular work from existing clients. The high margin subscription service, PatBase, also had a highly successful year with 20% growth, with the business benefitting from an increase in new subscribers, an annual price increase and favourable exchange rate movements. We have continued to invest in both the functionality of the PatBase product and its geographic coverage, as well as in a robust, state of the art infrastructure to secure the resilience of the platform, which provides 24/7 access to intellectual property data across the world.
RWS Life Sciences
The Group's Life Sciences division accounted for approximately 27% of the Group's sales in the year (GBP45.3m compared to GBP24.4m in 2016) and focuses on the language service requirements of pharmaceutical corporations and clinical research organisations.
The results of this division include a full 12 months of sales of CTi (2016: 11 months) and 7.5 months of revenue, since acquisition, from LUZ. The LUZ business has performed particularly well since acquisition, with sales of GBP17.4m, benefitting from growth in sales to major customers. CTi had a challenging year following the renegotiation of several key customer contracts, however, this has strengthened our relationships with customers and leaves the business well positioned for future growth.
During the year, the integration of LUZ with CTi to form an enlarged RWS Life Sciences business was successfully completed. This division now operates with one management team, one set of accounts and under one brand.
The division plans to expand its operations into the Asia Pacific region in 2018 to capitalise on the growth in the pharmaceutical market in the region and to better serve its existing customer base.
RWS Language Solutions (formerly Commercial Translations)
The RWS Language Solutions division, which accounted for 8% of Group sales and operates in the UK, Germany and Switzerland, reported an 11% growth in revenues to GBP13.2m (2016: GBP11.9m). This division manages all of the Group's non-patent and non-life science translations and it remains the division most exposed to competition.
With effect from 1(st) October 2017, the division was restructured and rebranded and will now operate autonomously from the patent translation and filing division, led by one management team. We believe that this change will enhance management's focus and drive improved margins through production process efficiencies over time.
This business enables RWS to offer customers a complete solution to their translation needs whilst continuing to provide good cross selling opportunities for the Patent Translation and Life Sciences divisions, whose customers use the interpreting services provided by the Language Solutions division.
Moravia
Moravia was acquired on 3 November 2017 and will become a standalone division. In the year ended 31 December 2016, Moravia achieved revenues of US$159m and adjusted earnings before interest, tax, depreciation and amortisation of US$27m.
It works with many of the largest publicly traded technology companies in the world to manage their complex localisation needs which includes the adaptation of content, software, websites, applications, marketing materials and audio/video for hundreds of languages and geographies, to ensure brand consistency as they grow globally.
We believe that there are multiple avenues for growth available to Moravia, over and above the underlying growth in its core markets, including:
-- increasing share of wallet with its long-standing clients -- winning new clients -- growing new verticals and geographies
Market Update
Patent Filing Statistics
The World Intellectual Property Office (WIPO) has published figures showing a 7.3% worldwide increase in patent applications filed under the Patent Cooperation Treaty (PCT) in 2016. This is the fastest increase since 2011 and the seventh consecutive year of growth, with approximately 233,000 applications being received in the year. The biggest numbers of filers continue to be located in the USA but the number of applications from China is growing, driven by ZTE and Huawei, who are the top two filers globally. European patent application numbers remained at record levels with 159,353 applications in 2016.
Risk Management
The Group maintains a risk register, which is reviewed and assessed on an annual basis by the Board of Directors. The key risks to the business are errors in the provision of the Group's services, in a mismatch between currencies (especially as between the Euro and Sterling), in regulatory changes to patent translation requirements in Europe, in the emergence of new translation technologies, and in the failure to successfully integrate acquired businesses into RWS. Additionally, as with any people business delivering high quality services, the Group depends upon its ability to attract and retain well-trained management and staff. The risk of Brexit on our ability to attract staff from the European Union is, as yet, unknown.
These risks are mitigated as follows:
-- Failings in service provision are most likely to arise as a result of human error. RWS was the first language services provider and, independently, the first search company to adopt ISO certification and invests in exhaustive and regularly updated procedures to minimise the risk of error. In addition, the Group carries substantial professional indemnity insurance.
-- Currency risk is partly mitigated via hedging operations and matching dollar denominated debt to US revenues.
-- 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 profits and the uncertainty around the timetable for its implementation. As one of the three largest patent filers in Europe, the UK would play a key role in the future administration of the Unitary Patent and has been designated as one of the three countries to host a Unitary Patent court. Given the UK's 'Brexit' vote, there remains uncertainty as to whether the UK will ratify the Unitary Patent prior to its exit from the European Union. In addition, the ratification of the Unitary Patent by the German authorities is delayed following a legal appeal to the German courts, claiming the Unitary Patent is unconstitutional under German law. As a result of this, we do not expect the Unitary Patent to come into effect until the 4th quarter of 2018 calendar year, at the earliest. When eventually implemented, the Unitary Patent, will not have the same territorial coverage as the current, long established patent application procedures, and will run in parallel. It will also have a different litigation process and fee structure. As such, we believe our major clients will be cautious in their take up of the new system and will decide upon their patenting strategies as they observe the Unitary Patent in action, assessing which of the two systems they prefer for the majority of their filings.
-- In October 2015, RWS acquired Corporate Translations Inc. and the subsequent integration work focused on merging RWS's smaller existing life science business of PharmaQuest and its Medical Translation Division into the newly acquired business. This integration work was successfully completed in September 2016.
In February 2017, RWS acquired LUZ, inc, and the integration of this business with CTi was successfully completed in September 2017.
The framework developed for integrating businesses is now established and the experience gained from the above integrations will be utilised on future acquisitions.
The work on integrating AOP into RWS Patent Information is already well underway and the limited amount of integration work on Moravia has already commenced.
-- The Group has always embraced new translation technologies and used it to good effect in order to maintain and improve margins, efficiency and competitiveness. Recognising the advances in machine translation technology (MT), we continue to monitor and trial MT use within the business and have integrated MT engines into the translation workflow in certain areas, where it makes commercial sense. Moravia already uses a comprehensive range of machine translation technologies as an integrated part of its services, and its extensive knowledge of these technologies can be leveraged further across the broader Group. It is clear that the market for generic translations will, over time, be further eroded by Neural Machine Translation. As a leader in quality language services, RWS will continue to differentiate by focussing on translation work in critical areas such as intellectual property and life sciences or where the nuances of localisation are highly valued by major global brands.
-- In the current economic climate, we have been successful in recruiting high calibre staff to support our growth to date, however, competition for talent in key cities such as London is intensifying. In order to continue to grow our global talent base, we strive to offer stability of employment, competitive salaries, and an excellent working environment to all of our colleagues and, where appropriate, to add locations in second cities that provide access to a wider talent pool.
RWS Holdings plc
Annual Report 2017
Consolidated Statement of Comprehensive Income
For the year ended 30 September
2017 2016
Note GBP'000 GBP'000
---------------------------- ------- ---------- -----------
Revenue 3 164,040 121,986
Cost of sales (92,269) (69,792)
---------------------------- ------- ---------- -----------
Gross profit 71,771 52,194
Administrative
expenses (37,790) (25, 671)
---------------------------- ------- ---------- -----------
Operating profit 33,981 26,523
---------------------------- ------- ---------- -----------
Analysed as:
Operating profit
before charging: 43,405 32,023
Amortization of
acquired intangibles (6,574) (4,639)
Acquisition costs (2,850) (855)
Share based payment
costs - (6)
---------------------------- ------- ---------- -----------
Operating profit 33,981 26,523
---------------------------- ------- ---------- -----------
Finance income 973 16
Finance costs (1,088) (1,448)
---------------------------- ------- ---------- -----------
Profit before
tax 33,866 25,091
Taxation expense 4 (9,306) (5,758)
---------------------------- ------- ---------- -----------
Profit for the
year 24,560 19,333
---------------------------- ------- ---------- -----------
Other comprehensive
income*
(Loss)/gain on
retranslation
of foreign operations (4,702) 8,479
Total other comprehensive
(expense)/income (4,702) 8,479
---------------------------- ------- ---------- -----------
Total comprehensive
income attributable
to:
Owners of the
parent 19,858 27,812
---------------------------- ------- ---------- -----------
Basic earnings
per Ordinary share
(pence per share) 6 11.0 9.0
---------------------------- ------- ---------- -----------
Diluted earnings
per Ordinary share
(pence per share) 6 10.9 9.0
---------------------------- ------- ---------- -----------
*Other comprehensive income includes only items that will be subsequently reclassified to Profit before tax when specific conditions are met.
RWS Holdings plc
Annual Report 2017
Consolidated Statement of Financial Position
at 30 September
Registered Company
3002645 2017 2016
GBP'000 GBP'000
---------------------------- ---- ---------- ----------
Assets
Non-current assets
Goodwill 101,108 61,518
Intangible assets 48,787 28,421
Property, plant
and equipment 18,147 17,630
Deferred tax assets 1,475 1,875
---------------------------------- ---------- ----------
169,517 109,444
--------------------------------- ---------- ----------
Current assets
Trade and other
receivables 41,682 28,173
Foreign exchange
derivatives 281 -
Cash and cash equivalents 20,064 27,910
---------------------------------- ---------- ----------
62,027 56,083
--------------------------------- ---------- ----------
Total assets 231,544 165,527
---------------------------------- ---------- ----------
Liabilities
Current liabilities
Loan 8,955 6,923
Trade and other
payables 27,689 20,207
Foreign exchange
derivatives - 681
Income tax payable 2,748 4,702
Provisions 82 79
---------------------------------- ---------- ----------
39,474 32,592
--------------------------------- ---------- ----------
Non-current liabilities
Loan 31,343 22,500
Other payables 30 30
Provisions 297 379
Deferred tax liabilities 1,515 1,326
---------------------------------- ---------- ----------
33,185 24,235
--------------------------------- ---------- ----------
Total liabilities 72,659 56,827
---------------------------------- ---------- ----------
Total net assets 158,885 108,700
---------------------------------- ---------- ----------
Equity
---------------------------- ---- ---------- ----------
Capital and reserves
attributable to
owners of the parent
---------------------------- ---- ---------- ----------
Share capital 2,293 2,157
---------------------------------- ---------- ----------
Share premium 50,718 8,947
---------------------------------- ---------- ----------
Share based payment
reserve 526 875
---------------------------------- ---------- ----------
Reverse acquisition
reserve (8,483) (8,483)
---------------------------------- ---------- ----------
Foreign currency
reserve 5,415 10,117
---------------------------------- ---------- ----------
Retained earnings 108,416 95,087
---------------------------------- ---------- ----------
Total equity 158,885 108,700
---------------------------------- ---------- ----------
RWS Holdings plc
Annual Report 2017
Consolidated Statement of Changes in Equity
for the year ended 30 September
Total
Share Other equity
Share premium reserves Retained attributable
capital account (see below) earnings to
GBP'000 GBP'000 GBP'000 GBP'000 owners
of the
parent
GBP'000
----------------------- ---------- ---------- -------------- ----------- --------------
At 1 October
2015 2,116 3,583 (5,044) 85,035 85,690
Profit for
the year - - - 19,333 19,333
Currency translation
differences - - 8,479 - 8,479
----------------------- ---------- ---------- -------------- ----------- --------------
Total Comprehensive
income for - - 8,479 19,333 27,812
The year ended
30 September
2016
Issue of shares 41 5,364 - - 5,405
Deferred tax
on unexercised
share options - - - 414 414
Dividends - - - (10,627) (10,627)
Exercise of
share options - - (932) 932 -
Credit arising
on share based
payments - - 6 - 6
----------------------- ---------- ---------- -------------- ----------- --------------
At 30 September
2016 2,157 8,947 2,509 95,087 108,700
Profit for
the year - - - 24,560 24,560
Currency translation
differences - - (4,702) - (4,702)
----------------------- ---------- ---------- -------------- ----------- --------------
Total Comprehensive
income for
the year ended
30 September
2017
Issue of shares - - (4,702) 24,560 19,858
Deferred tax
on unexercised
share options 136 41,771 - - 41,907
Income tax
on unexercised
share options - - - 394 394
Dividends - - - 598 598
Exercise of
share options - - - (12,572) (12,572)
- - (349) 349 -
----------------------- ---------- ---------- -------------- ----------- --------------
At 30 September
2017 2,293 50,718 (2,542) 108,416 158,885
----------------------- ---------- ---------- -------------- ----------- --------------
Share Reverse Foreign Total
based acquisition currency other
Other reserves payment reserve reserve reserves
reserve GBP'000 GBP'000 GBP'000
GBP'000
----------------------- ---------- ---------- -------------- ----------- --------------
At 1 October
2015 1,801 (8,483) 1,638 (5,044)
Other Comprehensive
gain for the
year - - 8,479 8,479
Exercise of
share options (932) - - (932)
Credit arising
on share based
payments 6 - - 6
----------------------- ---------- ---------- -------------- ----------- --------------
At 30 September
2016
Other Comprehensive
loss for the 875 (8,483) 10,117 2,509
year
- - (4,702) (4,702)
Exercise of
share options (349) - - (349)
----------------------- ---------- ---------- -------------- ----------- --------------
At 30 September
2017 526 (8,483) 5,415 (2,542)
----------------------- ---------- ---------- -------------- ----------- --------------
The nature and purpose of each reserve within equity is as follows:
- Share capital is the nominal value of the shares issued.
- Share premium is the fair value of the shares issued in excess of their nominal value.
- Share based payment reserve is the credit arising on the share based payment charges in relation to the Company's share option schemes.
- Foreign currency reserve is the cumulative gain or loss arising on retranslating the net assets of overseas operations into sterling except where the Group applies a net
investment hedge.
- Reverse acquisition reserve was created when RWS Holdings plc became the legal parent of Bybrook Limited. The substance of this combination was that Bybrook
Limited acquired RWS Holdings plc.
- Retained earnings are the cumulative net gains and losses, including the capital reserve from the Company balance sheet.
RWS Holdings plc
Annual Report 2017
Consolidated Statement of Cash Flows
For the year ended 30 September
2017 2016
GBP'000 GBP'000
---------------------------- --- ----------- -----------
Cash flows from
operating activities
Profit before tax 33,866 25,091
Adjustments for:
Depreciation of
property, plant
and equipment 1,171 941
Amortization of
intangible assets 6,709 4,719
Share based payment
costs - 6
Finance income (973) (16)
Finance expense 1,088 1,448
---------------------------- --- ----------- -----------
Operating cash
flow before movements
In working capital
and provisions 41,861 32,189
Increase in trade
and other receivables (8,019) (4,249)
Increase in trade
and other payables
and provisions 4,244 1,652
---------------------------- --- ----------- -----------
Cash generated
from operations 38,086 29,592
Income tax paid (9,687) (5,196)
---------------------------- --- ----------- -----------
Net cash inflow
from operating
activities 28,399 24,396
---------------------------- --- ----------- -----------
Cash flows from
investing activities
Interest paid (1,009) (369)
Interest received 11 16
Acquisition of
subsidiary, net
of cash acquired (74,834) (47,068)
Purchases of property,
plant and equipment (1,495) (731)
Purchases on intangibles
(computer software) (728) (169)
---------------------------- --- ----------- -----------
Net cash outflow
from investing
activities (78,055) (48,321)
---------------------------- --- ----------- -----------
Cash flows from
financing activities
Proceeds from borrowing 21,000 29,485
Repayment of borrowing (8,159) (4,874)
Proceeds from the
issue of share
capital 41,907 5,405
Dividends paid 5 (12,572) (10,627)
---------------------------- --- ----------- -----------
Net cash inflow
from financing
activities 42,176 19,389
---------------------------- --- ----------- -----------
Net decrease in
cash and cash equivalents (7,480) (4,536)
Cash and cash equivalents
at beginning of
the year 27,910 30,569
Exchange (losses)/gains
on cash and cash
equivalents (366) 1,877
---------------------------- --- ----------- -----------
Cash and cash equivalents
at end of the year 20,064 27,910
---------------------------- --- ----------- -----------
Free cash flow
---------------------------- --- ----------- -----------
Analysis of free
cash flow
Net cash generated
from operations 38,086 29,592
Net interest paid (998) (353)
Income tax paid (9,687) (5,196)
Purchases of property,
plant and equipment (1,495) (731)
Purchases of intangibles
(computer software) (728) (169)
---------------------------- --- ----------- -----------
Free cash flow 25,178 23,143
---------------------------- --- ----------- -----------
The Directors consider that the free cash flow analysis above indicates the cash generated from normal activities excluding acquisitions, dividends paid and the proceeds from the issue of share capital.
RWS Holdings plc
Annual Report 2017
Notes to the Consolidated Financial Statements (continued)
1. General Information
RWS Holdings plc is a company incorporated in the United Kingdom. The address of the registered office is Europa House, Chiltern Park, Chiltern Hill, Chalfont St Peter, Buckinghamshire, SL9 9FG.
The Group's financial statements for the year ended 30 September 2017, from which this financial information has been extracted, and for the comparative year ended 30 September 2016, are prepared in accordance with the International Financial Reporting Standards ('IFRS') adopted for use in the EU.
The financial information shown in the announcement for the year ended 30 September 2017 and the year ended 30 September 2016 set out above does not constitute statutory accounts but is derived from those accounts. The results have been prepared using accounting policies consistent with those used in the preparation of the statutory accounts. The financial information contained in this announcement does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. Statutory accounts for the year ended 30 September 2016 have been delivered to the Registrar of Companies and those for the year ended 30 September 2017 will be delivered shortly, having been approved by the Directors on 5 December 2017. The auditors have reported on the accounts for the years ended 30 September 2016 and 30 September 2017, their reports were unqualified, did not contain statements under Section 498 (2) or (3) of the Companies Act 2006 and did not contain any matters to which the auditors drew attention without qualifying their report.
Copies of this announcement are available at the registered office of the Company for a period of 14 days from the date hereof.
2. Significant account policies
Basis of accounting
The principle accounting policies adopted in the preparation of this preliminary announcement remain unchanged from those set out fully in the financial statements for the year ended 30 September 2016.
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. The Group expects to publish full financial statements that comply with IFRS on 16 January 2018.
3. Segment Information
The Group's operations are based in UK, Continental Europe, Asia, United States of America and Australia. The table below shows turnover by the geographic market in which customers are located.
2017 2016
GBP'000 GBP'000
--------------------- --------- ---------
UK 19,924 15,510
Continental Europe 75,428 62,751
Asia, United
States of America
and Australia 68,688 43,725
--------------------- --------- ---------
164,040 121,986
--------------------- --------- ---------
4. Taxation 2017 2016
GBP'000 GBP'000
------------------------------- ----------- ----------
Taxation recognised in
the income statement is
as follows:
Current tax expense
Tax on profit for the
current year
- UK 5,825 4,171
- Overseas 2,708 3,325
Adjustments in respect
of prior years (208) (32)
-------------------------------- ---------- ----------
8,325 7,464
Deferred tax
Current year movement 721 (1,624)
Adjustments in respect
of prior years 260 (82)
-------------------------------- ---------- ----------
Total tax expense 9,306 5,758
-------------------------------- ---------- ----------
The table below reconciles 2017 2016
the UK statutory tax charge GBP'000 GBP'000
to the Group's total tax
charge
-------------------------------- ---------- ----------
Profit before taxation 33,866 25,091
-------------------------------- ---------- ----------
Notional tax charge at
UK corporation tax rate
of 19.5% (2016: 20.0%) 6,604 5,018
Effects of:
Items not deductible or
not chargeable for tax
purposes 1,131 (512)
Differences in overseas
tax rates 1,519 1,366
Adjustments in respect
of prior years 52 (114)
-------------------------------- ---------- ----------
Total tax expense for
the year 9,306 5,758
-------------------------------- ---------- ----------
RWS Holdings plc
Annual Report 2017
Notes to the Consolidated Financial Statements (continued)
5 Dividends to shareholders 2017 2017 2016 2016
pence pence
per share GBP'000 per GBP'000
share
Final, paid 24 February 4.45 9,602 3.85 8,146
2017 (2016: paid
26 February 2016)
Interim, paid 21 1.30 2,970 1.15 2,481
July 2017 (2016:
paid 22 July 2016)
------------------------------ ------------ ---------- --------- ----------
5.75 12,572 5.00 10,627
------------------------------ ------------ ---------- --------- ----------
The Directors recommend a final dividend in respect of the financial year ended 30 September 2017 of 5.20 pence per Ordinary share to be paid on 23 February 2018 to shareholders who are on the register at 26 January 2018. This dividend is not reflected in these financial statements, as it does not represent a liability at 30 September 2017. The final proposed dividend will reduce shareholders' funds by an estimated GBP14.2 million.
6 Earnings per Ordinary Share
Basic earnings per share are based on the post-tax
Group profit for the year and a weighted average
number of Ordinary Shares in issue during the
year calculated as follows:
2017 2016
Weighted average number 223,735,513 214,215,397
of Ordinary shares
in issue for basic
earnings
Dilutive impact of 1,539,927 1,564,458
share options
------------------------- ------------- -------------
Weighted average number
of Ordinary shares
for diluted earnings 225,275,440 215,779,855
------------------------- ------------- -------------
Adjusted earnings per Ordinary share is also
presented to eliminate the effects of acquired
intangibles, share options and exceptional acquisition
costs. This presentation shows the trend in
earnings per Ordinary share that is attributable
to the underlying trading activities. The reconciliation
between the basic and adjusted figures is as
follows:
2017 2016 2017 2016
Basic Basic Diluted Diluted
earnings earnings earnings earnings
2017 2016 per per per per share
share share share
GBP'000 GBP'000 pence pence pence pence
Profit for 24,560 19,333 11.0 9.0 10.9 9.0
the year
Adjustments:
Amortization 6,574 4,639 2.9 2.2 2.9 2.1
of acquired
intangibles
Acquisition 2,850 855 1.3 0.4 1.3 0.4
costs
Charges for - 6 - - - -
share based
payments
Tax effect (1,972) (1,515) (0.9) (0.7) (0.9) (0.7)
of adjustments
----------------- --------- --------- ---------- ---------- ---------- -----------
Adjusted
earnings 32,012 23,318 14.3 10.9 14.2 10.8
----------------- --------- --------- ---------- ---------- ---------- -----------
-------------------------------------------------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAPASELSXFFF
(END) Dow Jones Newswires
December 06, 2017 02:00 ET (07:00 GMT)
1 Year Rws Chart |
1 Month Rws Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
