RWS Posts US$52 Million in Revenues for First Half FY2008

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Posted by Renato S. Beninatto on June 3, 2008 in the following blogs: Market Data
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The challenge with rankings like our Top 25 Translation Companies is that successful language service providers don't stagnate -- and they keep on publishing results. Fortunately for us, the news from RWS -- the U.K.-based company ranked number 10 in our list -- corroborates our assessments about growth in the translation business. RWS's fiscal year starts on October 1st. Yesterday the company released its results for the half-year ended on March 31st. Sales increased by 19.3% to £26.9 million (roughly US$52 million). More interestingly, profits before tax rose by 25.9%.

This leads us to 3 observations:

RWS joins the 100-million Dollar Club. If the company's performance follows the trend of past years, RWS will exceed US$100 million in revenues by the end of its fiscal year.

There is profit to be made. RWS is known for commanding premium prices for a well differentiated service in a market where most players want to focus on price. In the first half of its fiscal year, the company achieved a gross margin of 39.7% and net profits before taxes of 24.8%. As the company announced the deployment of SDL technology last month, we wouldn't be surprised if these numbers improved in the short term.

The London Agreement remains a threat. As of May 1st this year, the London Agreement is in effect. This ruling, meant to reduce costs relating to the translation of European patents, might affect RWS's performance because of the company's singular focus on patent translation. The London Agreement provides for patent claims to be available in the national language of the states where the European patent is registered, while the description -- which represents the bulk of the text of a patent -- can be made available in English, French, or German only. On the other hand, one could argue that RWS can make up the potential loss in the size of translation projects with an increase in the number of patents that will now be translated.

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