Patents firm grows
Murgitroyd benefits from weak sterling as profits rise
The company has made a strong start to the year
Murgitroyd, the Glasgow-based IP and patents company, said it was building on a strong year and has benefited from the weakness of sterling.
Revenues grew to £4m (2018: £44.6m) and profit before tax came in at £4.16m (2018: underlying profit before tax of £4.08m), an increase of 2%, in line with market expectations.
Total revenue from US-based clients rose by just under 8.4%, to £24.18m, and more than half of the group’s revenue is being generated in either US dollars or euros.
The group said it is a net beneficiary of sterling weakness and therefore has gained from the lower value of the pound caused by the Brexit talks.
· Revenue increased 7.5% to £48.0m (2018: £44.6m)
· Profit before tax up 16.4% to £4.16m (2018: £3.57m)
· Basic EPS rose 11.9% to 33.2p (2018: 29.7p)
· Proposed final dividend of 15p per share (2018: 14.5p), resulting in a total dividend for the year of 22p, an increase of 4.8% year-on-year
· Net debt at period end of £3.71m (31 May 2018: net funds of £2.83m), reflecting initial £5.0m consideration paid for the acquisition of Chapman IP in February 2019
· Earnings-enhancing acquisition of the entire issued share capital of Chapman IP, a European Patent and Trade Mark Attorney practice based in Southampton, for an aggregate consideration of £6.6m.
· Chief Executive and Finance Director roles split with Edward Murgitroyd, after four years as CEO of the operating business, becoming CEO of Murgitroyd Group and Keith Young continuing as Finance Director.
· Non-executive Board refreshed with Dr. Kenneth Chrystie retiring from the Board and Mark Kemp-Gee announcing his intention to retire at this year’s AGM. Helga Chapman and Willie MacDiarmid joined the Board as Non-executive Directors, the latter also taking on the role of Deputy Chairman.
Headcount increased to 294 as at 31 May 2019 (31 May 2018: 273). This increase is largely due to the acquisition of Chapman IP.
Mr Murgitroyd said: “The year under review has been one of change and developments for the Group including the restructuring of the Board and the acquisition of Chapman IP which I am pleased to report has been integrated successfully.
“Despite continuing macro-economic and political uncertainties, the Group’s European and international presence, with eighteen offices in ten countries, puts us in a strong position to balance out any weaknesses in individual markets and to support our clients worldwide.
“The Group’s trading performance in the early part of the new financial year has been strong, partly as a result of a growing case-load from major US-based corporates, including a new retained advisory relationship.
“While Murgitroyd operates in a market with good long-term prospects, we are not complacent and the board remains committed to the reinvestment of a proportion of incremental profits in systems, customer service and business development, which underpin our future growth plans.
“Nonetheless, the Group is currently well placed to deliver on its expectations for the financial year as a whole and I remain confident that we can achieve both our financial and operating objectives and maintain our progressive dividend policy.”