Rws Share Discussion Threads

[jeffian] 17/2/2009 11:44

Quality will out!

[phillis] 17/2/2009 10:20

Welcome back £3
Looks like there is a shortage of stock

[orange1] 12/2/2009 19:37

yep, thanks as well.

[stevie blunder] 12/2/2009 17:51

Thanks for that Superstar.

[superstardj] 12/2/2009 17:34

Here's what WH Ireland had to say on the sunject in a note to clients today:

RWS has got off to a strong start in the current financial year with Q1 profit significantly ahead of the comparable period last year and in excess of management expectations. This time in 2008, we drew attention to RWS as a likely resilient business in a recession. Whilst the share price might have wavered, the operational performance of the business – the true test – has not been found wanting.

The London Agreement, now fully implemented, appears to be having less impact than once thought likely. Whilst there is some pricing pressure evident in certain sectors, e.g. automotive, the underlying Translations business is performing well. In Information Services, new calendar year renewals for PatBase subscriptions, seasonally high in January, have also gone exceptionally well.

Currencies are having a major beneficial effect. The further strengthening of the euro and yen against sterling since the previous financial year-end is exerting an upward pull on margins. This reflects the preponderance of overseas revenues set against a mainly domestic cost base. With the exception of €7m of revenues fixed at 86.2p during November and the hedging of US income at $1.61, RWS is benefiting fully from the latest exchange rate movements in its favour.

It is clear that earlier expectation of a relatively flat year for profits in FY09, before growth resumed in FY10, was overly cautious. On present trends, RWS is heading toward considerably exceeding present consensus forecasts. Accordingly, we are moving up our estimates for EPS by 5% for FY09 & FY10, and by 2.5% for FY11. This is despite much lower projected interest receivable as rates fall. RWS has £22m net cash and deploying this into more profitable, complementary acquisitions is a key management aim given the sharp fall in investment returns on cash.

The prospective PER is 9.5 with a 4.7% dividend yield assuming a 10% increase year-on-year. Forecast free cash yield is 10.4%. Our estimate of fair value for equity – based on future projected cash flow discounted back at 10% – is now 440p per share.

The shares fell heavily in October when it seemed likely that the consistent 20%-plus earnings growth seen each year since flotation in 2003 might falter. Today's upgrade of forecasts leaves them looking considerably undervalued when set against our fair value estimate. We therefore reiterate the 'Buy' recommendation.

[jeffian] 12/2/2009 09:59

Indeed. This company seems to offer everything the market is crying out for - no gearing, growth in turnover, profit and dividends and good cash generation.

[phillis] 12/2/2009 08:01

...and an excellent start to the new year with Q1 ahead of forecast

[phillis] 26/1/2009 17:00

Nicely through the XD 8p

[phillis] 06/1/2009 12:26

Price gradually moving in right direction

[jeffian] 12/12/2008 10:24

This from today's Tempus column in the Times:-

"RWS Holdings

Andrew Brodie might be forgiven for monitoring the foreign exchange markets more closely than the average AIM chief executive. RWS Holdings, the patent translator which he runs, draws 95 per cent of its sales from outside the UK, about 65 per cent from the eurozone, and sits on £22 million of cash.

That exposure, together with a willingness to call currency moves, means that the company, only two months into its new financial year, is already sitting on a £700,000 hedging gain on the euro. That windfall is helpful given that trading has become more difficult in recent months. Yesterday's full-year results show organic growth slowing to about 6 per cent, against the 10 per cent-plus RWS has previously achieved.

Part of the problem is the implementation in May of the London Agreement – the deal that waives the requirement for European patents to be translated into the language of individual European Union states – which will wipe £10 million from sales and £2 million from profits this year.

The other bother is that customers are showing signs of deferring work: the 30 per cent of RWS's sales unrelated to patents – translating instruction manuals and the like – is typically more cyclical than the protection of intellectual property which, falling under R&D budgets, is an area most companies are loath to cut. The broader worry is RWS's exposure to carmakers: Daimler and Porsche are big clients, as is BASF, a key supplier to the sector.

The upshot is that, currencies aside, this year's profits are likely to be flat on last year. The short-term attraction lies with the ability of Mr Brodie, a 45 per cent shareholder, to deliver more of the sort of earnings-enhancing acquisitions that he has in the past. In the belief that he can, at 222¾p, or nine times earnings, and yielding 5 per cent, hold on. "

[phillis] 11/12/2008 07:18

Great results.
A nice place to shelter from the downturn

[phillis] 28/11/2008 13:11

Doesn't take much to push the price up

[phillis] 28/11/2008 09:21

Cash is king - whatever the short term sales outlook from the implementation of the London agreement

[jeffian] 25/11/2008 13:25

You may even be being modest in your hopes, Phillis. RWS have said "This strong financial position underpins our intention to increase the final dividend in line with the increase in profits" which were ahead about 25% at the halfway stage whilst interim divi increased 16%. I reckon they could pay up to 8.3p final (10.8p for the whole year) which would still be conservatively covered 2.4x by earnings whilst having no interest bill and still increasing their cash pile. Ticks all the right boxes in credit-crunched times!

Regards, Ian

[phillis] 25/11/2008 12:17

I am (talking to myself again) hoping for a 7.5p final dividend making 10p in all.

This business generates much more cash than it can sensibly reinvest and I anticipate a rising divi stream in future years (or a buy out)
Great for the SIPP

[phillis] 24/11/2008 14:23

Results soon.
Depends what is said about revenus growth in view of London Agreement impact

[phillis] 03/11/2008 16:50

An excellent share to acquire on quiet days in the coming months.
V strong balance sheet

[jeffian] 23/10/2008 09:51

The problem is the market. Everything is getting walloped, with volatility on a daily basis based solely on sentiment around certain sectors (mining, finance, whatever). The market has lost its head and panic ensues. This is the opportunity to pick up those good stocks which have been dragged down with the rest and I believe that RWS is one of those. As Anthony Bolton and Warren Buffet have both pointed out in calling bottom recently, purchasing at these levels doesn't mean it won't go down further but they are expecting to be looking back in a few years' time in disbelief that quality stocks could be bought so cheaply. This was also the case in late 1990's when anything that wasn't 'Telecoms/Media/Technology' was cheap as chips. If you pick quality companies with good earnings, cashflow and sustainable dividends they will come right in the long run and RWS fits that bill IMHO.

Regards, Ian

[bigboyo] 23/10/2008 09:00

Still getting walloped --- eps current less than 9 and prospective probably only pe of 8 -- with net cash irrespective of announced planned expenditure --- where is the problem ???

Anyone share broker reviews downgrades etc ?

[jeffian] 15/10/2008 11:02

That's OK, H. I thought I was missing something! Re RWS, even if profits are "marginally below consensus", in the current environment to have a company producing profits "substantially ahead of the prior year and to achieve new record levels", generating cash with substantial and growing cash reserves on the balance sheet and now valued on a c.9XPER on a c.5% divi yield has to be a good buy in the long term, doesn't it?

Regards, Ian

[hieronymous1] 14/10/2008 22:28

Jeffian

You are right about RWS, we have wandered off track. Apologies for my part in it. The discussion began when someone asked why RWS was getting hammered and I said it was irrational fears about any business even vaguely associated with Russia. All the rest is Bigboyo and me enjoying an argument. I am going to resist the temptation for a while.

[jeffian] 14/10/2008 19:18

I can see that "geo-political risks" are relevant where one has assets in these countries. I was a shareholder in Celtic Resources whose principal asset - a Russian goldmine - was spirited back into Russian hands in rather dubious circumstances. That case (like Sibir/Sibneft) also raised the issue of whether we should allow Russian (or whatever foreign) companies onto our exchanges and with access to our capital if they refuse to play by our rules. But RWS isn't like that; it just provides a translation service for which it gets paid a fee. What is the "risk" to RWS from the emerging BRIC economies?

Regards, Ian

[bigboyo] 14/10/2008 17:35

jeffian

geo-political risks are relevant to this stock because the BRIC economies are an increasing source or patent generation.

India recently agreed to recognize pharma patents (much to the disgust of many) and many companies are off-shoring basic pharma work.

With the myriad of languages in Brazil, China, India and Russia and their patent application rates rising the discussion becomes relevant.

However, statements made by Hieronymous1 above like

"So the political conditions for economic growth are better in Russia .." -- yeah right ! -- Putin and his cronies over Singh and his cronies ! -- for me anyway Hieronymous1 clearly has an agenda.

[jeffian] 14/10/2008 15:54

I'm losing the plot of this little exchange. Its relevance to RWS is..........what exactly?