MUR.L Regulatory News (MUR)

16 Jan 2006 07:01

Murgitroyd Group PLC16 January 2006 16 January 2006 Murgitroyd Group PLC ("the Group") Unaudited Interim Results for the six months ended 30 November 2005 Highlights • Turnover up 51% to £9.5 million (2004: £6.3 million) • EBITA up 87% to £1,029,000 (2004: £550,000) • Profit before tax up 98% to £665,000 (2004: £336,000) • Adjusted basic earnings per share: 7.67p (2004: 4.44p), basic earnings per share: 4.49p (2004: 2.26) • Significant organic growth and benefits from the acquisition of Castles Ian Murgitroyd, Group Chairman, commented: "I am pleased to announce another successful performance by the Group for thesix months ended 30 November 2005. Turnover increased by 51% as a result ofcontinued organic growth and the acquisition and successful integration of theCastles practice. This result is highly encouraging and demonstrates the factthat the enlarged business has retained the Group's ability to produce strongunderlying organic growth. In the wake of a strong trading performance duringthe first six months, your Board views the remainder of the current financialyear with confidence." 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 the Alternative Investment Market of the London Stock Exchange ("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 another successful performance by the Group for the sixmonths ended 30 November 2005. Turnover increased by 51% as a result of continued organic growth and theacquisition and successful integration of the Castles practice, exceeding theBoard's expectations. This result is highly encouraging and demonstrates thefact that the enlarged business has retained the Group's ability to producestrong underlying organic growth. The integration of Castles has also served toexpand the Group's activities across a wide range of industry sectors. The Group's profitability increased by 98% to £665,000; this greater than prorata increase reflects continued economies of scale in the wake of theintegration of the Castles practice and strong control of overheads. During theperiod under review, the gross margin was 60.3% (2004: 68.2%). A fall in marginwas anticipated as prices are aligned across the Group over time followingrecent acquisitions. Net cash flow in the period was negative at £250,000, thisafter payment of £327,000 to the vendors of Castles. The development of the Attorney secondment programme continues and agreementswere secured with four additional organisations during the six-month period.Under such programmes the Group's Attorneys are seconded to work in a quasiin-house capacity for clients. The Group's clients enjoy direct representation rights in the UK, Ireland,Germany, France, Monaco and the Netherlands. During the period under reviewdirect client representation has also been established in Austria andSwitzerland in respect of the local validation of granted European Patentsproviding both marketing and cost saving advantages to the Group. Havingestablished ourselves as one of the leading pan-European Patent and Trade MarkAttorney practices we remain committed to a policy of ongoing organic and, whereappropriate, acquisitive expansion. The Market As stated at the time of the announcement of the annual results in August, boththe Patent and Trade Mark markets continue to show signs of growth, with thelatest annual statistics from The European Patent Office and Community TradeMark Office indicating that the number of filings in both markets haveincreased. Demand for qualified Patent Attorneys still exceeds supply, a factor that iscompounded by the high average age demographic in the European Patentprofession. In the event the Group has succeeded in using this demographic issueto our advantage while continuing to invest in training our 'in house' Attorneysin the different jurisdictions under which we represent clients' interests. People As at 30 November 2005, the number of employees in the Group totalled 168 (2004:141) including 33 qualified Attorneys with an average age of 38. Two newAttorneys - one Patent qualified and one Trade Mark qualified - have beenrecruited and join the Group in January and February 2006 respectively. Theaforementioned internal training programme remains integral to the Group'sculture and Attorneys are currently being trained in the UK, Ireland, France andGermany. Our operations in Belfast have been transferred to larger premises and, inNovember, a new office was opened in York to service the Midlands and the Northof England. 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 163.5p and 248p. The current middle market price is 227p. Dividend As in previous years, the Board has decided not to propose an interim dividend.The Board does however intend, subject to the availability of distributablereserves, to recommend a final dividend. Outlook The continuation of strong organic growth and the successful integration of theCastles practice have, as anticipated, served to significantly improve theGroup's performance, as reflected in the mid-year advances in both turnover andearnings. The Group's primary aim is to achieve continuous and sustainablegrowth, both organically and, where appropriate, through selective acquisitions.Following the successful integration of both Cabinet Bonneau and Castles, theGroup will continue to consider acquisition opportunities. In the wake of astrong trading performance during the first six months, your Board views theremainder of the current financial year with confidence. Ian G MurgitroydChairman 13 January 2006 This interim announcement was approved by the Board of Directors on 13 January2006. MURGITROYD GROUP PLC Unaudited Consolidated Profit and Loss AccountFor the six months ended 30 November 2005 (six months ended 30 November 2004) Six months ended Six months ended 30 November 2005 30 November 2004 £'000 £'000 (unaudited) (unaudited) Turnover 9,482 6,264 Cost of sales (3,760) (1,993) ________ ________Gross Profit 5,722 4,271 Administrative expenses (4,693) (3,721)Goodwill amortisation (263) (181) ________ ________Operating profit 766 369 Other interest receivable and similar income 2 0Interest payable and similar charges (103) (33) ________ ________Profit on ordinary activities before taxation 665 336 Taxation on profit on ordinary activities (294) (149) ________ ________Profit on ordinary activities retained for the period 371 187 ________ ________ Earnings per 10p ordinary share Basic 4.49p 2.26pDiluted 4.43p 2.25pAdjusted, basic before goodwill amortisation 7.67p 4.44pAdjusted, diluted before goodwill amortisation 7.56p 4.43p MURGITROYD GROUP PLC Unaudited Consolidated Balance SheetAt 30 November 2005 (30 November 2004) 30 November 30 November 2005 2004 £'000 £'000 £'000 £'000 (unaudited) (unaudited)Fixed assetsTangible fixed assets 2,189 2,172Goodwill 8,948 6,160 ________ ________ 11,137 8,332Current AssetsWork in progress 491 305Debtors 6,340 4,563Cash at bank and in hand 273 286 ________ ________ 7,104 5,154 Creditors: amounts falling due within one year (4,998) (3,328) ________ ________Net current assets 2,106 1,826 ________ ________Total assets less current liabilities 13,243 10,158 Creditors: amounts falling due after more than one year (2,802) (165) Provision for liabilities and charges 15 (1) ________ ________Net Assets 10,456 9,992 ________ ________Capital and reservesCalled up share capital 828 828Share premium account 2,258 2,258Merger reserve 6,437 6,437Revaluation reserve 103 62Profit and loss account 830 407 ________ ________Shareholders funds - equity 10,456 9,992 ________ ________ MURGITROYD GROUP PLC Unaudited consolidated Cash Flow statementFor the six months ended 30 November 2005 (six months ended 30 November 2004) Six months ended Six months ended 30 November 2005 30 November 2004 £'000 £'000 (unaudited) (unaudited) Net cash inflow from operating activities 826 597 ________ ________Returns on investments and servicing of financeInterest received 2 0Bank interest paid (58) (2)Interest element of hire purchase repayments (2) (32) ________ ________Net cash outflow from returns on investments and servicing (58) (34)of finance ________ ________Taxation (312) (177) ________ ________Capital expenditure and financial investmentPurchase of tangible fixed assets (104) (114) ________ ________Cash outflow from capital expenditure and financial (104) (114)investment ________ ________AcquisitionsPurchase of subsidiary undertaking (327) (23) ________ ________Cash outflow from acquisitions (327) (23) ________ ________Equity dividends paid (275) (165) ________ ________Net cash (outflow)/inflow before financing (250) 84 ________ ________FinancingIncrease/(decrease) in bank loans due within one year 5 (15)Decrease in bank loans due outwith one year (75) (32)Repayment of capital element of hire purchase obligations (26) (17) ________ ________Net cash outflow from financing (96) (64) ________ ________(Decrease)/increase in cash in the period (346) 20 ________ ________ NOTES: 1. The accounting policies that have been applied to the unaudited interim results are consistent with the latest published audited accounts of Murgitroyd & Company Limited. 2. These interim results are unaudited and do not comprise full accounts within the meaning of section 240 of the Companies Act 1985. Full accounts for the year ended 31 May 2005, on which the auditors gave an unqualified report, have been delivered to the Registrar of Companies. 3. A charge for taxation has been included at the effective rate likely to be applied to the UK result, excluding the goodwill amortisation, for the full year to 31 May 2006. 4. The earnings per share of Murgitroyd Group PLC is calculated by reference to the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during each period, as follows: Six months ended Six months ended 30 November 2005 30 November 2004 Profit after taxation 371,473 186,686Amortisation of goodwill 263,222 180,696 ________ ________ 634,695 367,382 ________ ________ Basic weighted average number of shares 8,277,887 8,277,887Diluted weighted average number of shares 8,394,134 8,299,201 Basic earnings per share 4.49p 2.26pDiluted earnings per share 4.43p 2.25pAdjusted basic earnings per share 7.67p 4.44pAdjusted diluted earnings per share 7.56p 4.43p 5. The Directors do not propose to pay an interim dividend at this time. The Directors do intend, subject to the availability of distributable reserves, to recommend a final dividend to shareholders in respect of the financial year ending 31 May 2006. 6. Copies of this announcement and the full interim statement will be available, free of charge for a period of one month, from the Group's Nominated Adviser: Noble & Company Limited Noble & Company Limited 76 George Street 120 Old Broad Street Edinburgh EH2 3BU London EC2N 1AR Independent review report by KPMG Audit Plc to Murgitroyd Group PLC Introduction We have been engaged by the company to review the financial information set outon pages 4 to 7 and we have read the other information contained in the interimreport and considered whether it contains any apparent misstatements or materialinconsistencies 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 is substantially lessin scope than an audit performed in accordance with Auditing Standards 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 2005. KPMG Audit PlcChartered Accountants 13 January 2006 191 West George StreetGlasgowG2 2LJ This information is provided by RNS The company news service from the London Stock Exchange