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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Murgitroyd Group Plc | LSE:MUR | London | Ordinary Share | GB0031067456 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 670.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMMUR
RNS Number : 1972Y
Murgitroyd Group PLC
07 September 2015
7 September 2015
Murgitroyd Group PLC ("the Group")
Preliminary Results for the year ended 31 May 2015
The Group (AIM:MUR), is pleased to announce its audited results for the year ended 31 May 2015.
Highlights
-- Revenue increased to GBP39.8m (2014: GBP38.4m) -- Profit before income tax increased to GBP4.16m (2014: GBP4.10m) -- Basic earnings per share of 35.0p (2014: 33.2p)
-- Proposed final dividend of 10.5p per share, giving a total dividend for the year of 14.75p (2014: 13.25p), an increase of 11.3% year on year
-- Net cash of GBP0.71m (31 May 2014 net debt: GBP0.38m)
Ian Murgitroyd, Chairman of Murgitroyd Group PLC said:
"We are pleased to be able to report an increase in pre-tax profits to GBP4.16m together with record revenues of GBP39.8m, the latter continuing the Group's record of unbroken revenue growth since its flotation in 2001. We are also reporting for the first time a positive net cash position at the year end.
"Increased revenues continue to be achieved through organic growth as a result of our continued investment in infrastructure, people and processes, and a focus on business development. Over the next year we will continue to drive growth in the USA while also increasing our focus on Europe, with the aim of reversing the recent contraction of revenues in this market as economic activity increases.
"Despite the challenging trading environment, these results are encouraging and reinforce the Board's confidence in the Group's ability to deliver sustainable, long-term growth and value for shareholders. This, combined with the Group's strong cash flows, underpins our commitment to a continued progressive dividend policy.
"Trading since the year end has been in line with management expectations. We look to the future with confidence."
For further information, please contact:
Keith Young, Murgitroyd T: 07802 951913 Sandy Fraser, N+1 Singer (NOMAD and Broker) T: 0207 496 3000 Nadja Vetter/Emma Crawshaw, Cardew Group T: 0207 930 0777
Murgitroyd Group PLC
Chairman's Statement
Financial review
During 2015 the Group generated record revenue of GBP39.8m, an increase of 3.8% over the previous year. This continues the record of unbroken revenue growth since the Group's flotation in 2001, with pre-tax profits increasing to GBP4.2m (2014: GBP4.1m).
Importantly 2015 saw a return to year-on-year earnings growth, after unfavourable foreign exchange rate movements contributed to earnings falling back in 2014, the only decline since flotation.
Revenue growth continues to be driven organically by the Group's ongoing investment in business development, principally in the USA where revenue from US clients increased by more than 20% year-on-year to GBP15.7m. The USA now represents almost 40% of the Group by revenue.
This growth was partially offset by a further contraction of GBP0.9m in revenues from the Group's longstanding UK client base which once dominated the business. Revenue from UK clients peaked at GBP19.5m in 2011. The return to growth in this market, and in Europe more generally, is an area of strategic focus for the Group in the medium term.
The Group remains committed to its strategy of achieving sustainable long-term growth, through continued investment in its business development, sales and marketing.
Gross profit was unchanged year-on-year at GBP22.1m, with the gross margin percentage decreasing slightly to 55.4% (2014: 57.6%). This continues to reflect the ongoing changes in our client and sales mix highlighted previously, as well as the continuing price pressure in the market for professional Intellectual Property advisory services.
Operating profit increased by 1.2% reflecting a strong focus on controlling costs. Administrative expenses reduced to GBP17.9m (2014: GBP18.0m).
Profit before tax increased by 1.5% to GBP4.2m (2014: GBP4.1m); the result of the organic revenue growth and good control of overheads, offset by the impact of the reduction in gross margin.
Basic earnings per share increased to 35.00p (2014: 33.16p) as a consequence of the growth in profit and a reduction in applicable corporate tax rates. The Group's effective tax rate decreased to 24.9% (2014: 28.0%) principally as a result of the continuing decline in UK corporate tax rates.
Net cash flow from operating activities was GBP2.5m (2014: GBP2.9m) and, for the first time since flotation, the Group is reporting a positive net cash position at the year end. At 31 May 2015, net funds stood at GBP0.7m (31 May 2014: net debt: GBP0.4m).
Operating review
As we reported at the time of our interim results, the Group's operating businesses continue to service clients from fifteen offices in eight countries, with all operations rebranded as "MURGITROYD" on 1 July 2014.
In my Chairman's Statement last year I highlighted that Edward Murgitroyd had taken on day-to-day leadership of the management teams of the operational businesses during the preceding year. Reflecting this, Edward was appointed Chief Executive Officer of the MURGITROYD operating subsidiaries in October 2014, and, with his management team, has led the continued investment in both revenue growth and internal efficiencies.
The return on the investment from business development and marketing is evidenced by the increase in reported revenue, whilst the return on our investment in systems and processes is demonstrated by the increase in revenue being achieved in parallel with a reduction in overall headcount.
At 31 May 2015, the Group employed 240 people, down from a peak of more than 260. This reduction is anticipated to continue in the new financial year through further internal efficiencies. Total staff numbers have been reduced by six since the end of the financial year.
As well as a reduction in overall headcount, notwithstanding continuing growth in revenue, the number of qualified Attorneys required, and employed, by the Group also continues to fall, reflecting the transfer of a number of revenue-generating areas from Attorneys to paralegals, specialist formalities staff, and Patent and Trade Mark Administrators. At 31 May 2015 the Group employed 61 qualified Attorneys and generated GBP39.8m revenue in the year to that date. This compares with a qualified Attorney complement at 31 May 2009 of 70, the end of a financial year in which the Group's total revenue was more than GBP10m lower at GBP29.4m.
The Group will continue to recruit and train paralegals, specialist formalities staff, and Patent and Trade Mark Administrators whilst at the same time restructuring how it delivers services to clients to generate greater efficiencies. This restructuring is on course and remains a key component of the Group's strategy of continuing to grow both revenue and earnings.
The market
The markets in which MURGITROYD operate showed steady growth in the period under review. As reported in the Interim Results, statistics available from the European Union's Office for Trade Marks and Designs ("OHIM") continue to show an increase in Community Trade Mark ("CTM") applications and a stable demand for Registered Community Design ("RCD") applications. The year-on-year growth in CTM applications, to 31 May 2015, was 4.4% whilst RCD applications were unchanged.
The European Patent Office's ("EPO") most recent published statistics for the calendar year 2014 report an annual increase of 3% in European Patent applications to 273,000, which is an all-time high. As also reported in the Interim Results, the composition of these filings very much reflect MURGITROYD's experience, with applications from the USA increasing by 6.7%, Japanese originating applications falling by 3.8% and European originating applications remaining virtually unchanged.
As stated previously, we continue to monitor developments concerning the introduction of the new European Unitary Patent, which is still expected to be ratified by sufficient member states of the European Union ("EU") and enter into force during the course of 2017.
OHIM's and the EPO's statistics are considered good indicators of the current state of the market in which the Group operates. However, whilst the market as a whole remains buoyant as measured by the numbers of Patents and Trade Marks being filed, price pressures remain. Critically assessing and investing in improvements in the Group's working practices, service delivery and cost control remains a priority.
Although we are monitoring any impacts that the outcome of the proposed referendum on the UK's membership of the EU may have on the business, we are confident that the geographic spread of the Group's activities and customer base will enable us to deal with any resultant changes or uncertainties.
Board
The Group announced in February 2015 that non-Executive Director David Gray had resigned from the Board. In that announcement David's contribution to the Group was acknowledged and the Board wishes him well for the future. I am pleased to report that, as announced in August 2015, Dr Christopher Masters and John Reid have been appointed as non-Executive Directors. On 12 August 2015 the Board was further enhanced by the appointment of an additional Executive Director, Gordon Stark, MURGITROYD's Chief Operations Officer. I am delighted to welcome them all. Christopher and John will both add to the breadth and depth of commercial expertise and public company experience of the Board, whilst Gordon brings operational, as well as IP industry, insight.
Consistent with the new Board appointments and the previously announced reduction in my executive role, I intend to move from being Executive to non-Executive Chairman during the current financial year, at which point the Board will comprise five non-Executive and four Executive Directors.
Share price
(MORE TO FOLLOW) Dow Jones Newswires
September 07, 2015 02:00 ET (06:00 GMT)
During the period, the middle market price of the company's shares fluctuated between 461p and 628p. The current middle market price is 520p.
Dividend
An increased interim dividend of 4.25p per share was paid during the year, reflecting the Board's confidence in the performance of the Group. The near elimination of Group borrowings, and the net funds position as at 31 May 2015 noted above, provides flexibility for the Board to sustain a more progressive dividend policy. A final dividend of 10.5p per share is therefore being proposed, giving a total dividend for the year of 14.75p (2014: 13.25p), an increase of 11.3% year-on-year.
Subject to approval at the Annual General Meeting, the final dividend will be paid on 13 November 2015 to shareholders on the register on 2 October 2015. The ex-dividend date is 1 October 2015.
Outlook
In the context of a continuation of the challenging trading environment, these results are encouraging and reinforce the Board's confidence in the Group's ability to deliver sustainable, long-term growth and value to shareholders through ongoing investment and our established market presence. We are pleased to report that trading since the year end has been in line with management expectations.
Ian G Murgitroyd
Chairman
7 September 2015
This preliminary announcement was approved by the Board of Directors on 7 September 2015.
Consolidated statement of comprehensive income
for the year ended 31 May 2015
Note Year Year ended ended 31 May 31 May 2015 2014 GBP'000 GBP'000 Revenue 39,819 38,353 Cost of sales (17,750) (16,268) --------- --------- Gross profit 22,069 22,085 Administrative expenses (17,887) (17,952) --------- --------- Operating profit 4,182 4,133 Financial income 3 4 Financial expense (22) (37) --------- --------- Profit before income tax 4,163 4,100 Income tax (1,039) (1,150) --------- --------- Profit for the year attributable to equity holders of the parent 3,124 2,950 ========= ========= Other comprehensive income Items that will not be reclassified to profit or loss: Revaluation of property, plant and equipment - 50 Items that are or may be reclassified subsequently to profit or loss: Foreign exchange translation differences - equity accounted investments 75 (118) --------- --------- Profit for the financial year and total comprehensive income all attributable to equity holders of the parent 3,199 2,882 ========= ========= Earnings per share 2 Basic 35.00p 33.16p Diluted 34.51p 32.67p
Consolidated balance sheet
at 31 May 2015
31 May 31 May 2015 2014 GBP'000 GBP'000 Assets Non-current assets Property, plant and equipment 2,360 2,462 Intangible assets and goodwill 14,924 14,936 Deferred tax asset - 28 --------- ---------- Total non-current assets 17,284 17,426 --------- ---------- Current assets Work in progress 254 671 Trade and other receivables 16,086 14,515 Taxation recoverable 12 125 Cash and cash equivalents 1,617 1,457 --------- ---------- Total current assets 17,969 16,768 --------- ---------- Total assets 35,253 34,194 --------- ---------- Current liabilities Other interest-bearing loans and borrowings (304) (795) Trade and other payables (5,980) (5,998) Total current liabilities (6,284) (6,793) --------- ---------- Non-current liabilities Other interest-bearing loans and borrowings (607) (1,045) Deferred tax liabilities (21) - --------- ---------- Total non-current liabilities (628) (1,045) --------- ---------- Total liabilities (6,912) (7,838) --------- ---------- Net assets 28,341 26,356 ========= ========== Equity Share capital 893 893 Share premium 3,368 3,368 Merger reserve 6,436 6,436 Revaluation reserve 47 47 Foreign currency translation reserve (43) (118) Retained earnings 17,640 15,730 --------- ---------- Total equity attributable to equity holders of the parent 28,341 26,356 ========= ==========
Consolidated statement of cash flows
for the year ended 31 May 2015
Year Year ended ended 31 May 31 May 2015 2014 GBP'000 GBP'000 Cash flows from operating activities Profit for the year 3,124 2,950 Adjustments for: Depreciation 285 255 Amortisation 52 65 (Gain)/loss on disposal of property, plant and equipment - (15) Other reserves movements 75 (118) Financing costs 19 33 Income tax expense 1,039 1,150 --------- --------- 4,594 4,320 Increase in trade and other receivables (1,571) (647) Decrease/(increase) in work in progress 417 (48) (Decrease)/increase in trade and other payables (20) 302 Decrease in provision for liabilities - (55) --------- --------- 3,420 3,872 Interest paid (21) (43) Interest received 3 4 Income tax paid (896) (947) --------- --------- Net cash from operating activities 2,506 2,886 --------- --------- Cash flows from investing activities Acquisition of property, plant and equipment (150) (320) Acquisition of intangible fixed assets (40) (87) Proceeds from disposal of property, plant and equipment - 15 Net cash used in investing activities (190) (392) --------- --------- Cash flows from financing activities Proceeds from exercise of share options - 145 Repayment of borrowings (929) (1,054) Dividends paid (1,227) (1,113) --------- --------- Net cash used in financing activities (2,156) (2,022) --------- --------- Net increase in cash and cash equivalents 160 472 Cash and cash equivalents at start of year 1,457 985 --------- --------- Cash and cash equivalents at year end 1,617 1,457 ========= =========
Notes to the announcement:
1. Basis of preparation
(MORE TO FOLLOW) Dow Jones Newswires
September 07, 2015 02:00 ET (06:00 GMT)
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