TIDMRWS
RNS Number : 0825E
RWS Holdings PLC
26 October 2022
26 October 2022
RWS Holdings plc
Year End Trading Statement and Notice of Results
FY22 trading in line with market expectations, continued strong
cash generation and FY23 guidance unchanged
R WS Holdings plc ("RWS" or "the Group"), a unique world-leading
provider of technology-enabled language, content and intellectual
property services, today provides an update on trading for the year
ended 30 September 2022 ("FY22"), ahead of the announcement of its
full year results.
FY22 Performance
Group revenues in FY22 grew by approximately 8%, in line with
market expectations (1) , after including an additional month's
trading from SDL plc ("SDL"), which was acquired in November 2020.
This increase also reflects solid growth in Language Services and
accelerated growth in Language & Content Technology, despite
the faster-than-anticipated transition towards SaaS revenues. The
IP Services division has traded in line with previous guidance.
In the Group's half year results, we highlighted a reduced
volume of activity from certain of the largest technology clients
within the Enterprise Internationalisation Group in Language
Services. This continued in H2, however we remain confident in the
strong, long-term nature of these relationships and expect to see
these volumes recover in due course. In Regulated Industries, while
we continue to win new clients, we have decided to gradually cease
work with a significant client which reduced its volumes and moved
into offering competing services. These headwinds have been more
than offset by favourable FX movements, particularly in the second
half of the year.
We expect FY22 to deliver strong margin improvement, underpinned
by both the realisation of synergies from the integration of SDL
and a continuing increase in the translation volumes going through
our unique Language eXperience Delivery platform. The Group also
remains highly cash generative and had net cash (2) of
approximately GBP71m at 30 September 2022, compared with GBP45.3m
at 30 September 2021.
In August 2022 we amended and extended our revolving credit
facility , giving us further flexibility as we continue to grow our
business and seek selective acquisitions to enhance the Group's
capabilities and geographic reach. The facility has been increased
from $120 million to $220 million, on similar terms to the Group's
previous facility, with a maturity date of August 2026 and the
option to extend the facility via an uncommitted $100 million
accordion and for a further year.
The Group has significantly reinforced the strength and
diversity of its Board and Executive Team with the recent
appointments of Julie Southern as Chairman Designate, Candy Davies
as Chief Financial Officer, Jane Hyde as General Counsel &
Company Secretary and Terry Doyle as Chief Information Officer.
Outlook
As we exit FY22, we are making good progress with executing on
our organic growth levers, including growing eLearning and
Linguistic Validation revenues. We are also encouraged by the early
impact of our pricing programme and the Group's focus on its
transformation projects. We are therefore on track to deliver on
the guidance that we set out at our Capital Markets Day for revenue
growth, margin, capital expenditure, cash conversion and ROCE for
FY23 (3) . We also expect to maintain our progressive dividend
policy.
Notice of Full Year Results
RWS will provide a further update with its full year results in
mid-December 2022. To register your interest in attending the
results presentation, please email rws@mhpc.com .
Ian El-Mokadem, Chief Executive Officer of RWS, commented:
"We have continued to progress the actions and investments that
we set out at our Capital Markets Day in March, which underpin our
medium-term strategy and five year accelerated growth plan.
"Whilst mindful of wider global economic uncertainty, we remain
confident in the long-term nature of our market growth drivers and
the overall resilience of the Group. We believe the current
environment also presents an opportunity for us to strengthen our
leadership in our markets, as a well-funded business of unique
scale, sector diversification, footprint and capabilities. We
retain the ability and appetite to make value-accretive
acquisitions.
"We are very encouraged by the early signs of delivery against
our growth initiatives and the impact of the simpler, more
efficient and accountable organisational model we have put in place
to deliver our strategy. With a strong leadership team in place, we
are pushing ahead with energy to build an even more robust and
growing business and we look forward to updating investors when we
release our full year results."
1. The latest Group-compiled view of analysts' expectations for
FY22 gives a range of GBP736.3m-GBP760.4m for revenue, with a
consensus of GBP749.1m.
2. Net cash comprises cash and cash equivalents less loans but
before deducting lease liabilities.
3. Capital Markets Day guidance for FY22-24 was revenue growth
in line with market growth estimates of 4%; cash conversion of
80-85%; capital expenditure of 4-7% of revenue; and ROCE of 11-13%.
Guidance at Capital Markets Day for adjusted PBT margin percentage
confirmed a slight reduction in FY23, compared with FY22 and
recovery in FY24 to match the FY22 level.
For further information, please contact:
RWS Holdings plc
Andrew Brode, Chairman
Ian El-Mokadem, Chief Executive Officer
Candy Davies, Chief Financial Officer
Rod Day, Deputy Chief Financial Officer 01753 480200
MHP (Financial PR advisor) rws@mhpc.com
Katie Hunt / Simon Hockridge 020 3128 8100
Numis (Nomad & Joint Broker)
Stuart Skinner / Kevin Cruickshank / Will Baunton 020 7260 1000
Berenberg (Joint Broker)
Ben Wright / Toby Flaux / Alix Mecklenburg-Solodkoff 020 3207 7800
About RWS:
RWS Holdings plc is a unique, world-leading provider of
technology-enabled language, content and intellectual property
services. Through content transformation and multilingual data
analysis, our unique combination of technology and cultural
expertise helps our clients to grow by ensuring they are understood
anywhere, in any language.
Our purpose is unlocking global understanding. By combining
cultural understanding, client understanding and technical
understanding, our services and technology assist our clients to
acquire and retain customers, deliver engaging user experiences,
maintain compliance and gain actionable insights into their data
and content.
Our clients include 90 of the world's top 100 brands, the top 20
pharmaceutical companies and 19 of the top 20 patent filers. Our
client base spans Europe, Asia Pacific and North and South America.
We work in the automotive, chemical, financial, legal, medical,
pharmaceutical, technology and telecommunications sectors, which we
serve from 80+ global locations across five continents.
Founded in 1958, RWS is headquartered in the UK and publicly
listed on AIM, the London Stock Exchange regulated market
(RWS.L).
For further information, please visit: www.rws.com.
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