REG - RWS Holdings PLC - Year End Trading Statement and Notice of Results

RWS HoldingsAnnouncement

26/10/2022 07:00

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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

 

 

RWS 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
expectations¹, 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 £71m at 30 September 2022, compared with
£45.3m 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 FY23³. 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 (mailto: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 £736.3m-£760.4m for revenue, with a consensus of £749.1m.

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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