AJ Park delivers bigger than expected earnings boost for Australia's IPH
By Paul McBeth
Aug. 16 (BusinessDesk) - New Zealand intellectual property law firm AJ Park delivered bigger earnings than expected for its Australian owner after its integration into IPH went smoother than anticipated.
The Kiwi firm contributed $6.5 million to earnings before interest, tax, depreciation and amortisation in the eight months under IPH's ownership, 18 percent more than the $5.5 million forecast. The Sydney-based IP specialist said AJ Park's margins widened more than expected, as it closed the New Zealand firm's Australian office and reduced duplicated services.
IPH expects the New Zealand firm will contribute $9.5 million-to-$10 million of earnings in the June 2019 year.
"The earnings contribution of AJ Park in New Zealand exceeded expectations and this acquisition has also extended our Asian service offering to AJ Park's local and international clients," IPH chief executive Andrew Blattman said in a statement to the ASX.
IPH bought AJ Park for $66.1 million in cash and shares last year. The Australian company has made a series of acquisitions to form an Asia-Pacific IP firm operating under the Spruson & Ferguson brand.
AJ Park accounted for A$33.7 million of IPH's Australian and New Zealand revenue and delivered the bulk of a 26 percent increase to A$155.4 million in the 12 months ended June 30. The New Zealand firm lodged 2,269 of IPH's 19,465 patent filings in the financial year, and 3,129 of the group's 8,829 trademark filings.
IPH's net profit fell 5 percent to A$40.7 million, even as group revenue rose 21 percent to A$226 million. The board declared a final dividend of 11 Australian cents per share for shareholders on the register on Aug. 22, payable on Sept. 12. That takes the annual return to 22.5 cents.
The shares rose 4.2 percent to A$5.385, having shed 6 percent so far this year.