RWS hedges against euro

Patents translations specialist RWS Holdings said trading at the tail end of its financial year continued in line with expectations, but exchange rate movements have not been helpful.

On a constant currency basis, RWS will achieve at least a 7.7 % increase in revenues to around £70m in the year to the end of September, from £65m the year before.

Currency fluctuations will reduce the full year revenue figure, however, to around £69m. RWS has hedged the bulk of its estimated net euro exposure to January 31st 2013 at an average rate of 86.3 pence per euro.

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Revenue growth was primarily through organic growth in the core patent translations business, strong growth in China, Japan and PatBase. The performance of the German business also improved in the second half.

Profit before tax is expected to be within the range of market expectations before the negative impact of currency during the period.

Despite spending £6.1m on acquisitions, the group ended the financial year with net cash of £25.3m, up from £24.8m a year earlier, which bodes well for an increase in the final dividend, which will be in line with market consensus. The group paid an interim dividend of 4.02p while market forecasts suggest the full year pay-out will be 17.25p, which implies a final dividend of around 13.23p.

"RWS has achieved further record sales, demonstrating the strength of its core patent translations business and of PatBase, despite the backdrop of the Eurozone crisis and the contraction in worldwide economic growth," Andrew Brode, Executive Chairman, said.

"With a healthy pipeline of new client wins and prospects, the full benefit of the acquisition of inovia still to be realised, and the improvement in our German business, the group remains well positioned to make further positive progress in the new financial year and to continue to grow its share of the worldwide patent translations market," he added.

JH