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IPH releases HY23 results, records $48.6m profit
IPH Limited has released its half-year financial results, showing a 19 per cent revenue increase from this time last year and proving the firm’s current strategy has delivered a “significant uplift” in earnings for shareholders.
Lauren Croft
This is the first financial result since IPH officially acquired Canadian firm Smart & Biggar in October — in a move first announced in August with its 2022 financial year results. This, IPH said, as well as double-digit organic growth in Asia, contributed to the lift in earnings.
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IPH revealed an underlying net profit after tax (NPAT) of $48.6 million, an increase of 21 per cent from the previous six-month period ending December 2022.
Additionally, the firm reported a 24 per cent uplift in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $80.4 million. Diluted earnings per share (EPS) were 12.6¢ compared to 11.2¢ in HY22, with shareholder dividends increasing by 7 per cent.
Lawyers Weekly reported on the firm’s FY22 full-year results here, which showed that its firm-wide revenue was up by 6 per cent.
The firm also celebrated a 19 per cent revenue increase, from $191.4 million in HY22 to $226.9 million in HY23, something which, in addition to its underlying earnings, it attributed to the acquisition of Smart & Biggar and continued organic growth within the Asian arm of the business.
Commenting on the HY results, IPH chief executive Dr Andrew Blattman said that the HY23 results demonstrate “the continued success of IPH’s acquisition and integration strategy, which has delivered a significant uplift in underlying earnings for the group with enhanced returns to shareholders”.
“We are pleased with the progress of Smart & Biggar since we acquired the business in October last year. Underlying earnings since acquisition were consistent with our expectations, and we continue to progress the integration of the business into the wider IPH network, including generating referrals across our group,” he said.
“Our business in Asia continued its strong momentum, delivering double-digit earnings growth as we successfully leveraged our network across the region.”
Smart & Biggar has contributed $10.6 million in EBITDA since it was acquired by the firm. In IPH’s Asian business, like-for-like revenue increased by 9 per cent, and like-for-like EBITDA improved by 10 per cent.
However, like-for-like revenue in IPH’s Australian and New Zealand IP businesses declined by 3 per cent, with like-for-like EBITDA declining by 6 per cent. Travel expenses in HY23 increased significantly compared to the comparative period, which was impacted by COVID-related travel restrictions. Excluding this impact, ANZ like-for-like EBITDA would have declined 4 per cent, with group like-for-like EBITDA ahead by 1 per cent on HY22, according to the firm’s ASX statement.
“Following a period of disruption from the integration of Spruson & Ferguson Australia and Shelston IP, we are focused on initiatives to drive organic growth in Australia and NZ, including business development initiatives to increase filings with existing clients and target larger clients with IP remits across multiple jurisdictions, as well as process improvement to support client prospecting,” Dr Blattman said.
“On a group like-for-like basis (which removes the impact of currency benefit and acquisitions), earnings were steady on the prior corresponding half. This represents a slight improvement towards the end of HY23 from our commentary at the AGM where like-for-like earnings for the first four months had moderated on the prior corresponding period.”
Dr Blattman added that IPH would continue to focus on strengthening its international network in FY23.
“The acquisition of Smart & Biggar has significantly enhanced our international reach, and we will continue our focus on leveraging the full potential this transaction provides IPH in terms of additional earnings and increased client referrals.
“We will continue to harness our network across Asia while focusing on initiatives to drive organic growth in Australia and New Zealand. These revenue-building initiatives are being supported by further enhancing our digital capabilities. These include progressing the IPH Way and client solutions, including a new client portal and client relationship management tools, to improve and simplify our client service offering and generate further efficiencies,” he said.
“In the meantime, we will continue to assess further growth options, including potential acquisition opportunities in Canada and other core secondary IP markets.”
