22nd Jan 2007 07:01
Murgitroyd Group PLC22 January 2007 22 January 2007 Murgitroyd Group PLC ("the Group") Unaudited Interim Results for the six months ended 30 November 2006 Highlights • Turnover up 18% to £11.2 million (2005: £9.5 million) • EBITA up 63% to £1.64 million (2005 restated: £1.01 million) • Profit before tax up 85% to £1.19 million (2005 restated: £0.65 million) • Basic earnings per share of 8.57p (2005 restated: 4.24p) • Successful acquisition and integration of Fitzpatricks Ian Murgitroyd, Group Chairman, commented: "I am pleased to announce that the Group has had another strong performance forthe six months ended 30 November 2006, with turnover increasing by 18% andprofit before tax by 85% largely due to improved margins and economies of scalefollowing the acquisition of Fitzpatricks. Our continued ability to grow, bothorganically and by acquisition, is encouraging and highlights the opportunitieswithin the market. Murgitroyd has made three selective acquisitions in the lastthree years, all of which have been successfully integrated and have beenimmediately earnings enhancing. I strongly believe that Murgitroyd is wellpositioned to continue the sustained growth experienced over the last five yearsand trading in the second half of the current financial year to date has beenencouraging." For further information, please contact: Keith Young, Murgitroyd Group PLC 07802 951913Alasdair Robinson, Noble & Company Limited 0131 225 9677Nadja Vetter, Cardew Group 020 7930 0777 Notes to Editors Murgitroyd Group PLC, the holding company of Murgitroyd & Company Limited("Murgitroyd & Company"), a European Patent and Trade Mark Attorney practice,was floated on AIM on 30 November 2001. The practice has offices in Aberdeen,Belfast, Dublin, Glasgow, London, Muenster, Munich, Nice and York. Murgitroyd Group PLC specialises in the provision of Intellectual Propertyservices, including filing, prosecuting, litigating, licensing, assigning andrenewing Patents, Trade Marks and Designs, advising on Copyright and generallyassisting clients with the management of their Intellectual Property. Patentservices span the major sectors of the global economy including technology,engineering, electronics, chemistry and biotechnology with clients ranging fromlarge multi-national corporations to individual inventors and both in-house andexternal Patent Attorneys. The practice services major Trade Mark clients fromthe personal care, clothing, food and drinks, tobacco, pharmaceuticals,chemicals and oil industries together with service sector, sport andentertainment and retail industry clients. Trade Mark services are alsoprovided to other private practice Trade Mark Attorneys. Murgitroyd Group PLC ("the Group")Chairman's Statement Financial and operating review I am pleased to announce that the Group has seen another successful half-yearperformance for the period ended 30 November 2006. Turnover for the period under review increased by 18% to £11.2 million (2005:£9.5 million). As a result of both organic growth and the acquisition ofFitzpatricks Group Limited ("Fitzpatricks") EBITA was up by 63% to £1.64 million(2005 restated: £1.01 million). Profit before tax rose by 85% to £1.19 million(2005 restated: £0.65 million). This is due to improved gross margin andcontinued economies of scale following the integration of Fitzpatricks, as wellas tight cost controls. A move towards increased time-based charging resulted inthe stronger gross margin of 65.8% (2005: 60.3%). Net cash flow in the periodwas positive at £240,000. The acquisition and integration of Fitzpatricks for a consideration of £1.3million (excluding costs), in addition to approximately £270,000 of net assets,has to date proved extremely successful. Fitzpatricks was one of the UK'slongest established and leading providers of Patent and Trade Mark services. Theacquisition has strengthened the Group's corporate client base and extended thescope of Murgitroyd's service offering. No client losses occurred during theprocess and, with the exception of the departure of Fitzpatricks former ManagingDirector, all fee earners were retained within the Group. The acquisition hasbeen immediately earnings enhancing. Organic growth continues to remain strong within the enlarged Group. This ispartly due to continued business development, which has helped to attract newclients, but is also in part due to improved client management, helping toretain existing clients. The Group's clients enjoy direct representation rights in the UK, Ireland,Germany, France, Monaco, the Netherlands, Austria and Switzerland.Representation rights will also be established in Italy on 1 February 2007 withthe opening of a new office in Milan. This will be followed by the opening of anoffice in Edinburgh in March to help serve Scotland. These two additionaloffices will bring the Group's network to eleven offices in seven Europeancountries. The Group remains committed to continuing this European expansionthrough both organic and acquisitive growth in order to maintain its position asone of the leading pan-European Patent and Trade Mark Attorneys. In JanuaryMurgitroyd recruited its first dedicated US Business Development Executive whowill be located in the Group's new marketing office located within the ResearchTriangle in North Carolina with the intention to expand business developmentactivity further in North America. The Market The latest statistics from The European Patent Office ("EPO") and CommunityTrade Mark ("CTM") Office, which are used as benchmarks for the number of newfilings for Intellectual Property Rights in Europe, continue to indicate healthygrowth. The latest available EPO statistics are for 2005 and show the number ofPatents filed at the office increased by 7% while the CTM Office handled 8.4%more CTM applications in 2006 than in 2005. Our own organic growth continues toreflect these statistics and we are confident this trend will continue. As ever, the Group remains watchful of the continued imbalance in the supply of,and demand for, qualified Patent Attorneys. The internal training programmeremains a primary focus and so far the Group has succeeded in using this to itsadvantage. People Internal training continues to be an integral part of the Group's culture andfour Attorneys successfully passed the European Qualifying Examinations duringthe period. Our new trainee recruitment programme continues, with new traineesnow placed in every office. This includes York, where two trainees started thisfinancial year. The total number of 194 employees (2005: 168) now includes 47 (2005: 33)qualified Attorneys with an average age of 38. Roisin McNally resigned as a Director in September after eleven years with theGroup to pursue other interests. We would like to thank Roisin for herconsiderable contribution and commitment over the past years and wish her thevery best for the future. Following her resignation Murgitroyd appointed GrahamMurnane as an Executive Director to the Board with effect from 26 October. MrMurnane, has been a Director of Murgitroyd & Company Limited, the Group'sprincipal subsidiary since 1995. Prior to Murgitroyd, Mr Murnane, who is aQualified Chartered Engineer and has a MA in Engineering from CambridgeUniversity, was an Examiner at the European Patent Office in Munich. I would like to take this opportunity to thank all our employees for their hardwork and commitment to the Group. Share Price During the period, the middle market price of the Company's shares fluctuatedbetween 262p and 416p. The current middle market price is 480p. Dividend The Board has decided not to propose an interim dividend at this time. The Boarddoes however intend, subject to the availability of distributable reserves, torecommend a final dividend. Outlook The continuation of strong organic growth, improved margins, good cost controland the successful integration of Fitzpatricks have significantly improved theGroup's performance, The Group's primary aim is to continue to achievesustainable growth, both organically and, where appropriate, through selectiveacquisitions. In the wake of a strong trading performance during the first sixmonths, your Board views the remainder of the current financial year withconfidence. Ian G MurgitroydChairman 19 January 2007 This interim announcement was approved by the Board of Directors on 19 January2007. MURGITROYD GROUP PLC Unaudited Consolidated Profit and Loss AccountFor the six months ended 30 November 2006 (six months ended 30 November 2005) Six months ended Six months ended 30 November 2006 30 November 2005 £'000 £'000 (unaudited) (unaudited) (restated*) Turnover 11,163 9,482 Cost of sales (3,816) (3,760) ________ ________Gross Profit 7,347 5,722 Administrative expenses (5,705) (4,713)Goodwill amortisation (320) (263) ________ ________Operating profit 1,322 746 Other interest receivable and similar income 6 2Interest payable and similar charges (138) (103) ________ ________Profit on ordinary activities before taxation 1,190 645 Taxation on profit on ordinary activities (479) (294) ________ ________Profit on ordinary activities after taxation and for the 711 351period ________ ________ Earnings per 10p ordinary share Basic 8.57p 4.24pDiluted 8.32p 4.18p * See Note 1 MURGITROYD GROUP PLC Unaudited Consolidated Balance SheetAt 30 November 2006 (30 November 2005) 30 November 30 November 2006 2005 £'000 £'000 £'000 £'000 (unaudited) (unaudited)Fixed assetsTangible fixed assets 2,389 2,189Goodwill 10,091 8,948 ________ ________ 12,480 11,137Current AssetsWork in progress 443 491Debtors 7,111 6,340Cash at bank and in hand 689 273 ________ ________ 8,243 7,104 Creditors: amounts falling duewithin one year (5,707) (4,998) ________ ________Net current assets 2,536 2,106 ________ ________Total assets less current liabilities 15,016 13,243 Creditors: amounts falling dueafter more than one year (3,725) (2,802) Provision for liabilities and charges (81) 15 ________ ________Net Assets 11,210 10,456 ________ ________Capital and reservesCalled up share capital 830 828Share premium account 2,282 2,258Merger reserve 6,437 6,437Revaluation reserve 167 103Profit and loss account 1,494 830 ________ ________Shareholders funds - equity 11,210 10,456 ________ ________ MURGITROYD GROUP PLC Unaudited consolidated Cash Flow statementFor the six months ended 30 November 2006 (six months ended 30 November 2005) Six months ended Six months ended 30 November 2006 30 November 2005 £'000 £'000 (unaudited) (unaudited) Net cash inflow from operating activities 1,406 826 ________ ________Returns on investments and servicing of financeInterest received 6 2Bank interest paid (89) (58)Interest element of hire purchase repayments (2) (2) ________ ________Net cash outflow from returns on investments and servicing (85) (58)of finance ________ ________Taxation (359) (312) ________ ________Capital expenditure and financial investmentPurchase of tangible fixed assets (107) (104) ________ ________Cash outflow from capital expenditure and financial (107) (104)investment ________ ________AcquisitionsPurchase of subsidiary undertaking (851) (327)Cash at bank and in hand/(overdraft) acquired with 47 -subsidiary undertaking ________ ________Net cash outflow from acquisitions (804) (327) ________ ________Equity dividends paid (386) (275) ________ ________Net cash outflow before financing (335) (250) ________ ________FinancingIssue of ordinary share capital for cash 26 -Increase in bank loans due within one year 52 5Increase/(decrease) in bank loans due outwith one year 526 (75)Repayment of capital element of hire purchase obligations (29) (26) ________ ________Net cash inflow/(outflow) from financing 575 (96) ________ ________Increase/(decrease) in cash in the period 240 (346) ________ ________ NOTES: 1. The accounting policies that have been applied to the unauditedinterim results are consistent with the latest published audited accounts ofMurgitroyd & Company Limited except for a change in accounting policy for thevaluation of share options in accordance with FRS20 Share-based payments. Thecomparative figures for the six month period ended 30 November 2005 have alsobeen restated on adoption of FRS20 Share-based payments. In accordance with FRS 20 Share-based payments, a charge of £20,000has been made to Administrative Expenses for both the six month period ended 30November 2006 and the six month period ended 30 November 2005. 2. These interim results are unaudited and do not comprise full accountswithin the meaning of section 240 of the Companies Act 1985. Full accounts forthe year ended 31 May 2006, on which the auditors gave an unqualified report,have been delivered to the Registrar of Companies. 3. The earnings per share of Murgitroyd Group PLC is calculated byreference to the earnings attributable to ordinary shareholders divided by theweighted average number of shares in issue during each period, as follows: Six months ended Six months ended 30 November 2006 30 November 2005 (restated*) Profit on ordinary activities after taxation and for £711,357 £351,046the periodAmortisation of goodwill £320,425 £263,222 _________ ________ £1,031,782 £614,268 _________ ________ Basic weighted average number of shares 8,299,671 8,277,887Diluted weighted average number of shares 8,551,382 8,400,267 Basic earnings per share 8.57p 4.24pDiluted earnings per share 8.32p 4.18pAdjusted basic earnings per share 12.43p 7.42pAdjusted diluted earnings per share 12.07p 7.31p * See Note 1 4. The Directors do not propose to pay an interim dividend at this time.The Directors do intend, subject to the availability of distributablereserves, to recommend a final dividend to shareholders in respect of thefinancial year ending 31 May 2007. 5. Copies of this announcement and the full interim statement will beavailable, free of charge for a period of one month, from the Group's NominatedAdviser: Noble & Company Limited Noble & Company Limited76 George Street 120 Old Broad StreetEdinburgh EH2 3BU London EC2N 1AR Independent review report by KPMG Audit Plc to Murgitroyd Group PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 November 2006 which comprises the Consolidated Profitand Loss Account, Consolidated Balance Sheet, Consolidated Cash Flow Statementand the related notes. We have read the other information contained in theinterim report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. This report is made solely to the company in accordance with the terms of ourengagement. Our review has been undertaken so that we might state to thecompany those matters we are required to state to it in this report and for noother purpose. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the company for our review work, forthis report, or for the conclusions we have reached. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the AIMRules which require that the interim report must be presented and prepared in aform consistent with that which will be adopted in the company's annual accountshaving regard to the accounting standards applicable to such annual accounts. Review work performed We conducted our review having regard to the guidance contained in Bulletin 1999/4: Review of interim financial information issued by the Auditing PracticesBoard for use in the United Kingdom. A review consists principally of makingenquiries of group management and applying analytical procedures to thefinancial information and underlying financial data and, based thereon,assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with International Standards on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly we donot express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 November 2006. KPMG Audit PlcChartered Accountants191 West George StreetGlasgowG2 2LJ 19 January 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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