RWS Holdings(LSE: RWS) had me from hello, or rather, the moment I saw its share price performance, up 43% in one year and a stirring 243% over five years. I liked it even more when I heard it had delivered 13 unbroken years of profit growth.
Yes to RWS
Today it published final results for the year ended 30 September and market excitement has ebbed, its share price flat at time of writing. This is despite the fact that the language and intellectual property support services provider hailed this as "an outstanding year, strengthening our leading position in Life Sciences."
Sales rose 34.4% to £164m and adjusted profit before tax jumped 41.5% to £43.3m. Organic growth clocked in at 8%, excluding acquisitions and currency movements, with organic profit growth of 18%. Basic earnings per share (EPS) jumped 22% from 9p to 11p. The total dividend increased 16.1% to 6.5p, continuing an unbroken series of dividend increases since it floated in 2003. Nice.
Net debt did multiply from £1.5m to £20.2m, but this was largely due to the £74.8m cost of the acquisitions of LUZ and Article One Partners. Group gross margin improved by 96 basis points to 43.75% after significant gains in 2016, while chairman Andrew Brode has reported a strong first two months of the new financial year.
Perhaps the main reason investors are not jumping up and down with excitement is that they knew all this stuff already, which explains why the stock trades at a forecast 30.7 times earnings. Prospects remain promising, with forecast EPS growth of 26% in 2018, and although the yield underwhelms today at 1.7%, there is plenty of scope for progression. Expensive, but it looks a buy to me. Although you may be tempted by these brilliant bargains instead.
Numis Corporation(LSE: NUM) also reported today after a storming year which has seen its share price rise 33%, while it is up 147% over five years. Again, the market reaction to its preliminary results for the year to 30 September has been muted, with the share price down 0.57%.
Yet it was a good year for the small- and mid-cap broker, with revenue up 16% to a record high £130.1m. Profit before tax rose 18% to £38.3m and EPS were up 17% to 27.4p. What's not to like, stock market?
The total dividend for the year was maintained at 12p, the same as in 2016. However, the directors have pledged to pay a stable dividend and reinvest in the company, rather than lavishing shareholders with excess cash.
In the pipe
Market conditions provided a positive backdrop to UK equities and co-CEOs Alex Ham and Ross Mitchinson said the group's "deal pipeline is strong," while trading in the new financial year has started well. The stock also trades at a bargain 12.3 times earnings while the forecast dividend is a solid 3.9%, covered 2.1 times. If still unconvinced, you may prefer this hot growth stock.
City analysts have some concerns about Numis's future, forecasting a 19% drop in EPS in 2018, with forthcoming new Mifid II EU regulations no doubt playing a part, but this also looks like one for your watch list.
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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.