RWS off to solid start

14th Feb 2011 14:27

Patent translation specialist RWS Holdings said trading since the end of September has been encouraging and in line with expectations. The group has fully hedged its anticipated euro and dollar trading exposure at what it described as "attractive rates" for the current financial year. "We have a strong financial position and we are well placed to grow our share of the patent translation market and to take advantage of the improvement in the technical translations and intellectual property services markets," the company's chairman, Andrew Brode, said at the annual general meeting."Whilst the global economic recovery remains fragile, we expect that the realisation of the full year benefit of clients won in 2010, combined with improved efficiencies from our move into a new, integrated office, will further underpin progress in 2011," Brode added.Broker Peel Hunt said it is too early in the financial year to contemplate changing its forecasts but it would not rule out the possibility of upgrades "if current market conditions persist". With the shares trading on just 12 times projected 2011 earnings, the broker rates the shares a "buy", and says that RWS "enjoys a leading position in a global, stable and growing market. It has high margins, underpinned by a superior product offering and high barriers to entry, a significant net cash position and high return on invested capital (c20%) that will support organic and acquisitive growth."