Good morning. Apologies, I didn't get round to further updating yesterday's report in the afternoon/evening, because it took over 5 hours to get back to Hove from London - a derailed train just outside Brighton station brought everything to a standstill. Then I had to spend the evening doing the monthly accounts for my local share club.
RWS Holdings (LON:RWS)
Share price: 136p (down 10.7% today)
No. shares: 211.6m
Market Cap: £287.8m
Trading update - for the
half year ended 31 Mar 2015. This is a firm which provides specialist services (e.g. translation) to patent attorneys and direct to corporates, and other patent-related
services. I've not reported on this company for a long time, as the shares
looked too expensive. They've come down quite a bit lately, hence
it's worth me running the slide rule over the figures, as from a value
perspective we want to be buying low, and selling high, not the other way
around!
The first bit of today's statement is saying that turnover was flat in constant currency terms, but down 3.4% due to the weak Euro. Profit is slightly below expectations, and flat against last year;
Outlook - the Directorspeak sounds confident;
However, to my mind
the optimism in this paragraph doesn't seem consistent with the
more cautious comments also made today in this update about competitive
pressures, client wins being slow to convert into sales, and subdued trading
conditions.
Net cash - is reported at £21m as at 31 Mar 2015, so a very comfortable position there, and gives them scope to finance more bolt on acquisitions from existing resources. Note that the company has expanded over the last six years without issuing any significant quantity of new shares - always good to see companies which can self-fund their expansion.
Dividends - nothing is mentioned today, but Stockopedia shows the forecast
yield last night at 3.36%, so adjusting for today's share price fall that
should now be c.3.7% - not bad considering the divi rises about 14% each year.
I prefer a solid divi yield that is consistently rising, and reasonably well
covered, rather than chasing often unsustainably higher yields of 5%+.
My opinion - broker forecasts are for…
