RWS Full-Year 2019 Revenues Up 16% on Organic Growth, Acquisitions, Forex

The world’s most valuable publicly-listed language service provider (LSP), UK-based RWS Holdings, published its Year End Trading Statement on October 15, 2019. Such a statement is meant to give the markets an update on the business without providing the detailed financials of a full-year results announcement.

RWS said revenues grew to “no less than” GBP 355m (USD 450m) in the year ended September 30, 2019 when RWS’ financial year closes. This marks an increase of 16% from the GBP 306m achieved during the same period a year ago.

The LSP highlighted several factors driving top-line growth, such as “strong organic growth” and “an extra month of trading at Moravia,” which RWS acquired in November 2017, as well as the January 2019 acquisition of Alpha Translations Canada.

The company also benefited from a favorable exchange rate as Brexit-induced uncertainty weakened the British pound. Underlying organic growth, therefore, likely came in at the high, single-digit mark in line with US rival TransPerfect.

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RWS did not provide any figures on profitability, but pointed out that net profit “also increased significantly on last year and is expected to be marginally ahead of market expectations.”

RWS’ USD 320m Moravia bet continues to deliver for the UK-based LSP. According to the filing, the Moravia division (RWS’ largest), “achieved record revenue reflecting good year on year growth in the period.”

Moravia’s strong client footprint among US tech companies is proving to be a clever and profitable diversification for RWS, whose main focus has been on patent translation and, more recently, life sciences.

In Life Sciences, RWS highlighted a positive performance in its Linguistic Validation business. Linguistic validation is a complex translation workflow used in clinical trials and includes conceptual analysis of source questionnaires, forward- and back-translations, cognitive debriefings, and other proofing and quality steps.

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Finally, RWS pointed out that net debt has been reduced to GBP 37m (from GBP 65.1m the year before), which will help support future acquisitions.

Investors appear to have anticipated the update with shares in early London trading unchanged. Year-to-date 2019, RWS shares are up 31%, giving the company a market capitalization of GBP 1.6bn (USD 2.1bn).