RWS Holdings plc, a leading provider of technology-enabled language and intellectual property services, announced a return to growth in the second half of fiscal year 2024 (FY24), driven by strong performance in AI-led solutions. The company is set to reveal its full-year results on December 12, 2024.
The stock fell 17% by 11:23AM London Time following the update.
RWS reported a 2% increase in organic constant currency (OCC) revenue in the second half of FY24, counterbalancing a 2% decline in the first half and aligning the full-year figures with the previous year. This growth was attributed to significant improvements in the Regulated Industries and Language & Content Technology sectors. The company highlighted the progress of AI-led products such as TrainAI, Language Weaver, and Evolve, which contributed to the growth of Language Services and IP Services.
Despite positive OCC revenue growth, reported revenues for FY24 are expected to decline by 2% to £718 million due to adverse currency movements. Nonetheless, RWS anticipates delivering adjusted profit before tax (PBT) within the range of market expectations before currency adjustments. The company also improved its net debt position, reporting approximately £14 million at the end of September 2024, a reduction from £39 million as of March 31, 2024.
Looking ahead to fiscal year 2025 (FY25), RWS forecasts modest organic revenue growth at constant currency, with increased volumes expected to counterbalance ongoing price pressures. However, foreign exchange rates are anticipated to continue affecting reported revenue and adjusted PBT negatively.
Ian El-Mokadem, CEO of RWS, expressed confidence in the company's performance amid a challenging market, citing investments in growth initiatives and efficiency actions aligned with the company's medium-term strategy set in 2022. El-Mokadem emphasized the traction gained by AI-centered solutions, particularly TrainAI and Language Weaver, and the company's investment in sales effectiveness and efficiency, powered by its unique LXD platform. These factors, he believes, position RWS to emerge strong from the current market transition.
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