Companies: RWS   

Patent translation and technical search specialist RWS Holdings increased interim pre-tax profits 16 per cent to £3.5 million and expects a good second half year.

AIM-quoted RWS, Europe's leading provider of intellectual property support services, pushed sales up ten per cent to a £17.2 million in the six months to March, against the background of an overall European patent market growing at seven per cent as year. Operating profit, before goodwill amortisation and exceptional items, rose 28 per cent to £3.3 million and net cash at the end of March stood at £9.7 million after funding the £2.25 million acquisition of Eclipse Translations.

Executive chairman Andrew Brode, also a non-executive director of Vitesse Media (publisher of Growth Company Investor), says the second half year should show stronger growth by comparison with a relatively weak second half in 2003-04. RWS, which serves customers in the medical chemical, pharmaceutical, motor and telecoms industries and also provides technical, legal and financial translation outside the patent field, should additionally benefit from increasing its market share and a five per cent price rise in January.

Brode says the company likes Eclipse partly because it brings two or three longer-term contracts to a mostly one-off business, a proportion he would like to increase. RWS would have 'no problem' funding another suitable acquisition, possibly in new areas of patent support.

The company is expanding its staff and office space in Japan and would one day like to be bigger in the huge US market, though that would require a daunting commitment of sales and marketing effort. Looking to the future, Brode says completely mechanised translation, on which the EU Commission has spent 'hundreds of millions', is still '17 years away', but RWS will be ready when it does come.

At 180p, RWS shares value the company at £69 million and offer significant scope for improvement.