Rws Share Discussion Threads

[wad collector] 24/3/2022 19:24

Another NED buy today didn't stop a further fall , I can't decide if it's a tempting bargain or one to watch for longer. Is the 4 yr low going to become a 5 yr low tomorrow?
We hold rather too many of these, especially as the entry point was £6. Sit on hands or add in the morning?

[martinthebrave] 24/3/2022 17:19

EU Unitary Patent was stated yesterday to be a £12m Hit. Russia is a further 1%, or another £1m or so. Together with investment ratcheting up these things are responsible for growth slowing to the C.4% per annum until 2024, before building back to 6% in 2025. Margins are also expected to improve over time but I missed the quantum. Hope that helps!

[phillis] 24/3/2022 15:44

Elsa
Don’t think so

[jeffian] 24/3/2022 15:07

I haven't seen much comment about yesterday's TU but what I have seen (Times) seems to confirm my suggestion that the EU Unitary Patent may be the biggest factor behind the fall. This has been known about for years and was supposed to be brought in some time ago, but was temporarily deferred before. Given that this was known about - if uncertain on timing - one would have expected it to be priced in. I still feel this is a buying opportunity.

[redartbmud] 24/3/2022 14:44

No doubt a few institutions will reposition.

15x isn't unreasonable.

[mbdx7em21] 24/3/2022 14:21

taken advantage of today's pull back. some large/chunkie sales reported including a sell at 1.3m. a position seems to be being cleared.

[elsa7878] 24/3/2022 14:05

Thanks - I was being a it tongue in cheek as you probably gathered.
The market is huge and the opportunities for organic and acquisition led growth are excellent on the language side. Shame about the patent business.
Question is what multiple to now assign to it.

15 x seems about right I think so 380?

[redartbmud] 24/3/2022 11:45

elsa

From what I saw in the presentation, they are a very professional outfit and have some very talented employees and management.
The client list is one that can only be dreamed of.
They have work in progress to complete parts of their systems to futher improve what they do. This will take a little time and money to achieve.

One of my concerns was the part fragmentation of parts of the admin, such as personnel and maybe the finance function - invoicing, supplier payments etc. as they have regularly added bolt on's and particularly the big purchase of SDL.
That was addressed in the presentation as being on the agends.

They now have a wide spread of activity in their field and there is plenty of ongoing business for them to address. Once imbedded with a blue chip customer the relationship is long term.

I am a happy holder, although the share price is well below the £6+ of not so long ago, I only see the business going forward. They are very acquisitive, but genertae cash easily and in quantity that allows these transactions. Integration is second nature to them and each addition adds value. The share price will undoubtedly recover some of the lost ground, although there has been a big sector rotation based on the macro views of economies and markets.

Investing is personal. Always do your own research and make your own decisions on the fundamentals.

red

[elsa7878] 24/3/2022 11:30

Was it? Should I sell? And was the answer yes?

[redartbmud] 23/3/2022 22:10

Phillis, I did and asked a question too.
Very informative.

[phillis] 23/3/2022 20:20

Yes - a lot
Why don’t you try following the presentation.

[redartbmud] 23/3/2022 19:47

Well there was about two and a half hours of in-depth commentary by the team. Something in there must be relevant.

[phillis] 23/3/2022 19:16

Why is any individual response relevant?

It is fundamentally clear that patent translation - which was the business core some years ago - is not where the future is
The SDL Acquisition has dramatically changed the direction of the company and materially cements customer relationships

[redartbmud] 23/3/2022 17:30

Who has attended the Capital Markets Day online today, and what is the reaction to it?

[disc0dave45] 23/3/2022 14:27

Quick calcs and I get circa 25p eps even at the low pre tax profit forecast.That puts this on a forward PE of only about 15x. Although rated higher for growth, in the last five years it's PE hasn't gone below 25x, so a decent buy in level IMO.

[mbdx7em21] 23/3/2022 14:08

excellent entry point opp

[value viper] 23/3/2022 14:04

Interesting This is a global leader in its fieldWondered if PE might take this business on No debt - strong cash generator etcNRI

[phillis] 23/3/2022 14:01

and he is leaving shortly
What does that tell you!

[value viper] 23/3/2022 13:49

Hadn't realised FD owned no shares before today !!Slightly mixed feelings on that

[alter ego] 23/3/2022 13:40

Ian El-Mokadem CEO purchased 10k shares today along with Desmond Glass CFO who also bought 10k shares.

Perhaps they think the market has over-reacted

[keyno] 23/3/2022 12:33

The Russian/Ukraine war won't last for ever - probably not much longer I believe - and then the Russian state will cease to be the global pariah that it sort of is now.

I say "sort of" because not all countries are treating them as pariahs. The global money machine will quickly resume its onward grind to fully include Russia again when peace breaks out - particularly if Putin goes, which I believe he will soon - though the EU patent issue is bound to affect RWS, as they state. However, that's hardly come as a surprise to them. Fall has to be overdone. I also topped up today - for better or worse.

[microscope] 23/3/2022 12:21

TBurns understandable that it's raw if you know someone going through the pain, but I'm not seeing stalling organic growth, slowing in pace of growth maybe but not stalling. This morning's acquisition, while small in the bigger picture, appears to have some nice numbers.At this price they seem more than fairly valued though the situation in Ukraine and Russia is sure to have an impact.The concern would be if other parts of the world started following the EU lead on patent translations. But I haven't seen any sign of that. EU changes already factored in imho.Looks tempting now.

[essentialinvestor] 23/3/2022 12:17

So until this morning he held zero shares!.

[alter ego] 23/3/2022 12:10

Christopher Lewey Group Corporate Development Director has purchased 10k shares at 347p today.

[redartbmud] 23/3/2022 11:42

jeff

Sorry about the typos, not concentrating after a tiring day yesterday.

I agree that the patent issue may be a big problem for them. Tt must be easy business to acquire and once experienced staff are in place there is a template to work to and a lot of repetition, for legal reasons.

Looking at year on year organic growth, they add so many layers of new business that it is difficult to strip out the historic numbers to any degree of accuracy. Comparisons are only good year on year, and not reliable historically. That may not be strictly necessary, if the business is growing in a compliant market.

Each new acquisition brings additional revenue and profit and as long as that is earnings enhancing then it is fine. They also bring with them their own baggage and company ways of management and operation. We assume a seamless fit and little integration problems. Having a multi-site sprawling empire can cause difficulties and maintaining more headcount increases the fixed and semi-fixed cost base. Again, as long as they are employed up to capacity then their contribution should be more tha acceptable. There must be an element of duplication in admin that is dealt with somewhwre along the line, and that should enhance profitability. How many accounts staff, personnel and general admin are duplicated across the group? On the other hand it can be counter productive for the central team to keep their eyes on all of the balls in play.

Just working through some of my thoughts that are a little under researched.
In August 2020 I dropped a load at £6.6432 and reduced the running cost of my holding to 4.0451p (yes pence) per share. I am not therefore inclined to spend excessive amounts of time researching things to death, but I am reluctant to go gung ho into adding on a big dip that has been initiated by the latest company update.