RWS AR 23 Final Single pages - Flipbook - Page 41
REVENUE
GROSS PROFIT
Overall in FY23 the Group generated revenues of
£733.8m, which is 2% lower than FY22. This was due
to the impact of challenging economic conditions and
reduced activity in our end markets, partly o昀昀set by
£13m of bene昀椀ts from our foreign exchange hedging
programme and a stronger average US Dollar rate in
the period which supported revenues in local sterling
currency. On an organic constant currency ("OCC") basis
revenues are 6% lower than those achieved in FY22.
Gross pro昀椀t decreased by 3% to £339.5m, delivering
a gross margin of 46.3%, down slightly from 46.7% in
the prior year. Delivery of the signi昀椀cant cost actions
announced in June is nearing completion and we
continue to identify further opportunities for e昀케ciency
gains through our transformation programmes, including
by increasing the proportion of work undertaken through
our Language eXperience Delivery platform and the use
of arti昀椀cial intelligence ("AI") internally.
In divisional terms, Language Services recorded £329.8m
in revenue, a 4% decrease in total revenue and 7% on
an OCC basis. Client retention and satisfaction remain
high, albeit we continue to see reduced volume from
certain clients in some end markets as they adjust to
more challenging conditions. The TrainAI and eLearning
growth initiatives both performed well and provide
momentum going forwards. Regulated Industries
recorded £162.5m in revenue, a decrease of 6%, although
a decline of 9% on an OCC basis year-on-year. Positive
progress has been made with Linguistic Validation and
while some Life Sciences clients continued to deliver
reduced levels of activity, we expect volumes to increase
as more products move through regulatory approval.
Language and Content Technology had total revenue of
£136.7m, an increase of 8% year on year and a decrease
of 1% on an OCC basis. Reported organic growth was
3% ahead of prior year. IP Services recorded £104.8m in
revenue, a decrease of 2% on prior year and 4% on an
OCC basis. The introduction of the Unitary Patent in June
has resulted in the release of some of the backlog of IP
work providing momentum moving forwards.
The majority of the Group revenue, categorised by
geography, is in the US market, which accounts for 54%
of the total. No one client accounts for more than 10%
of Group revenue.
ADMINISTRATIVE EXPENSES
Administrative expenses have increased to £346.4m
(2022: £263.9m). Administrative expenses as a
percentage of revenue have increased from 35% to 47%,
which re昀氀ects the impact of the impairment charge
related to the Group's Language and Content Technology
CGU of £62.4m, together with the cost to achieve the
e昀케ciency programmes implemented during the period.
Adjusted administrative expenses (gross pro昀椀t less
adjusted operating pro昀椀t) increased by £4.0m to £215.7m.
Amortisation of acquired intangibles was £38.8m (2022:
£34.4m). This included additional amortisation for
Fonto and Propylon intangible assets, together with the
impact of exchange rate movements during the period.
Amortisation of non-acquired intangibles was £18.1m
(2022: £15.7m), re昀氀ecting an increase in capitalised
software development costs.
Exceptional costs of £22.6m were incurred during
the year, which includes £12.3m for restructuring and
integration costs in relation to the Group's cost reduction
programme, £5.5m for Group transformation costs and
£4.8m related to legacy payments.
Acquisition costs of £5.1m were primarily related to the
contingent consideration and purchase of Propylon
Holdings Limited during the period and contingent
consideration for the purchase of Liones Holding B.V. in
the prior period.
STRATEGIC REPORT
RWS Holdings plc — Annual Report 2023
41
