IPH (IPH) H2 2024 earnings summary

Executive summary

• Achieved strong FY24 results with underlying EBITDA up 15% to $195.5m and underlying NPAT up 14% to $112.4m, supported by robust cash flow, a 9% higher final dividend, and a return to target gearing (1.9x) ahead of schedule.

• Revenue grew 22.9% to $609.9m, driven by organic growth in ANZ and both organic and acquisitive growth in Canada.

• Expanded Canadian presence through acquisitions of Ridout & Maybee, ROBIC, and announced acquisition of Bereskin & Parr, building a market-leading IP business in Canada.

• Significant turnaround in ANZ, strong Canadian performance, and improved second half in Asia.

• Statutory NPAT declined 6% to $60.8m, impacted by higher amortisation, finance costs, and one-off acquisition/restructuring expenses.

Financial highlights

• Underlying revenue rose 24.4% to $609.9m, underlying EBITDA up 15% to $195.5m, and underlying NPAT up 14% to $112.4m.

• Cash flow from operations increased 44% to AUD 93m, with a 100% cash conversion ratio; free cash flow was $121m.

• Final dividend up 9% to AUD 0.19 per share, 30% franked, to be paid on 20 September; full-year dividend 35c, up from 33c.

• Leverage ratio at 1.9x, below target of 2x, with AUD 70.4m debt repaid in H2.

• Underlying diluted EPS at 46.0c, up 5.6% year-over-year.

Outlook and guidance

• FY25 priorities: organic growth in Australia, integration of Canadian firms, restoring growth in Asia, and maintaining strong cash flow.

• Full-year benefit from recent Canadian acquisitions expected in FY25 and beyond, with anticipated margin improvement as synergies are realized.

• Finance cost guidance for FY25 is AUD 26m, reflecting recent debt repayments.

• Continued investment in AI tools, process standardization, and global client programs.

• Recovery in US PCT applications expected to improve pipeline in secondary markets in 2H CY25.