Things patently better at RWS

Patent translation and search services provider RWS has seen a recent pick-up in its order book, underlining its confidence for the full year.

The company's revenue at the half-way stage were 4% ahead of the year before, with sales for the six months to March 31st coming in at £33.7m versus £32.4m at the interim stage the year before, and £33.0m in the second half of the preceding financial year.

The group's core patent translations business, which accounts for around 70% of group sales, grew its revenues to £23.5m from £22.9m the year before.

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The information business, which accounts for 7% of group sales and a significantly higher proportion of operating profit, grew its revenues to £2.5m (2011: £2.2m). This performance was primarily driven by an approximate 15% growth in revenues from PatBase, its subscription database services arm.

Underlying profit before tax for the six-month period eased to £8.1m from £8.2m the year before, with the company noting that profits were £0.2m lower this time round because of currency fluctuations. Reported profit before tax eased to £7.83m from £7.97m a year earlier.

Adjusted diluted earnings per share was up 3% to 14.4p from 14.0p at the half-way stage last year.

Net cash at the end of the reporting period was up to £22.5m from £19.9m a year earlier, despite spending £3.7m to buy a one-third interest in Inovia Holdings.

The company is set to buy the remainder of Inovia in September 2013, but in the meantime it has acquired for £2.5m the whole of the issued share capital of Davda & Associates, a company principally involved in the provision of patent and technical search services. Davda's adjusted profit after tax for the year ended 31st August 2011 was £0.45m. RWS said the acquisition will be earnings enhancing.

Trading in the second half of the financial year has been in line with management's expectations.

"Whilst RWS is not immune to the fragile global economic situation, especially in the Eurozone, our expectations for the year as a whole remain unchanged with a greater second half weighting anticipated as a result of recent client wins, some benefit from the ongoing rationalisation in Germany, a full half year contribution from increased PatBase subscriptions, an increase in the number of translations being transferred from Inovia, a strong order book and a healthy pipeline of new business opportunities," said Executive Chairman, Andrew Brode.

The interim dividend has been hiked by 10% to 4.02p.

JH