Revenue rises, profit falls for RWS Holdings
By Josh White
Date: Thursday 08 Jun 2023
(Sharecast News) - Content and localisation specialist RWS Holdings reported positive revenue growth in its half-year results on Thursday, but a decline in profit before tax and earnings per share.
The AIM-traded firm said revenue reached £366.3m in the six months ended 31 March, representing a 2.5% increase compared to the same period last year.
However, its adjusted profit before tax saw a decrease of 10% to £54.4m, while reported profit before tax dropped 13% to £28.7m .
Similarly, both adjusted and basic earnings per share declined by 11%, with adjusted basic earnings per share at 10.6p and basic earnings per share at 5.4p.
On a more positive note, the interim dividend was hiked by 7%, reaching 2.4p.
The company reported a cash conversion rate of 85%, reflecting a decline of 1,900 basis points, while RWS maintained a net cash position of £57.8m.
Looking ahead, RWS emphasised a second-half weighting in its performance, adding that it expected its full-year outlook to align with the latest guidance and market expectations. =
The firm said it was also aiming to achieve that through cost-cutting measures, which were projected to have a positive impact of £10m in the 2023 financial year.
Additionally, additional cost actions were planned for 2024, with an expected positive impact of about £25m.
"The group continues to make progress with its medium-term growth strategy against a significantly more challenging economic backdrop and a confluence of short-term headwinds," said chief executive officer Ian El-Mokadem.
"We have seen softer activity levels and some slower decision-making amongst certain clients in the first half, however we remain confident in the structural drivers of demand for our products and services, and the strength of the solutions that we provide.
"This is borne out by the encouraging number of new business wins in the period across all divisions, the very high levels of retention and satisfaction across our existing client base and the positive outcomes from several of the recent tender processes with some of our largest clients."
El-Mokadem said that, with RWS's strong balance sheet and cash generation, it was "actively pursuing" acquisitions that could accelerate delivery of its medium-term plans.
At 1020 BST, shares in RWS Holdings were up 12.14% at 255p.
Reporting by Josh White for Sharecast.com.
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