IPH Share Price Arrowed Up On Higher Revenue And Earnings

IPH shares mounted on higher revenue and earnings driven by the organic growth and acquisition undertaken by the company.

For the year ended 30 June 2018, the company generated $226.0 million revenue, up by 21.5 percent compared to the prior year. As a result, the company delivered higher statutory earnings of $70.1 million, reflecting the sound management over cost control.

IPH Limited Chairman Richard Grellman stated that improvement in revenue was attributable to organic growth and the acquisition of AJ Park, an intellectual property company in New Zealand.

But on the bottom line front, FY18 statutory net profit of the company has declined by 5.2 percent to $40.7 million on the back of increased one-off costs. However, the underlying NPAT has shown marginal improvement of 1.4 percent on the prior year, i.e., FY17.

Mr. Richard Grellman said that “IPH is committed to delivering sustainable value to its shareholders through a combination of organic growth, margin improvement initiatives, and business efficiencies along with potential strategic acquisitions.”

During 2018 the company completed the merger of Fisher Adams Kelly Callinan's (FAKC), Cullens and Spruson & Ferguson, with all three firms now fully integrated and operating as Spruson & Ferguson. With this merger, the company has expanded its geographical footprints in the Australian market and peddled to enhance platform for growth across the Asia-Pacific region. Further, the takeover of AJ Park has uplifted the company’s growth in the Asian market.

Company Strategy:

IPH Limited (ASX:IPH) aims to become a ‘leading intellectual property group in the secondary IP market.’ Acquisitions driven growth strategy and growing business organically are the two main standing pillars of the company’s future strategy.

Commenting on IPH’s strategy, Managing Director Dr. Andrew Blattman said that the company’s strategy is focussing on three levels that include, potential domestic and international acquisitions, organic growth and growth step-out opportunities.

Company’s Asian IP business remains at the heart of IPH’s growth strategy with a particular focus on China as it represents a significant market of around 130,000 annual patent filing. The company further focuses on achieving margin expansion and market share initiative through the recently acquired AJ Park and an integrated Spruson & Ferguson.

Moreover, the company’s Data and Analytics business have sold the Filing Analytics and Citation Eagle products to CPA Global for $10 million. After completing this sale, the company intends to focus on its autonomous activity monitoring tool, WiseTime.

Trading Update:

In the four months to 31 October 2018, total patent filings in the Australian market have grown by 3.6% against the prior comparative period. Further, the company has reported a strong “like-for-like” EBITDA growth for the first four months of Fiscal 2019, largely driven by growth in Asian business.

With the strengthening of the USD against the AUD, company’s average AUD/USD for the first four months of FY19 was 72.6c compared to 78.7c for the first four months of FY18.

On the day of its Annual General Meeting, IPH Limited’s stock surged by 3.792% to last trade at $5.200 on 23 November 2018. But over the past one year, the stock has witnessed a negative performance change of 8.91%.

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