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01 September 2004
The Herald
Murgitroyd eyes acquisitions to sustain growth

MURGITROYD, the intellectual property consultancy, is eyeing fresh bid targets after posting another healthy improvement

in both income and profits. The Glasgow-based company said yesterday it is in talks which 'may lead to an acquisition or acquisitions' by the group.

Murgitroyd, which operates eight European offices, posted a pre-tax surplus of 610,000 in the year ended May 31, a 73% rise on last year. Income surged 16% to 12.3m, buoyed by a near full-year contribution from Cabinet Bonneau, the Nice-based French business it acquired in July 2003.

Bonneau did, however, depress the gross margin to 66.7%, slightly lower than the previous year, because of the 'historically lower sales prices' of the French company. Murgitroyd plans to harmonise prices across the group.

Ian Murgitroyd, chairman, said the firm had acquired a 'significant number' of new clients during the period. Of the firm's top 50 clients, ranked by turnover, seven are recent client wins. The acquisition of Bonneau added around 3000 active cases to its portfolio.

Murgitroyd generated half its 2003/04 income in the UK and about 15% from the US, where it has an alliance with US law firm DrinkerBiddle. Some 12% of revenues were generated from Japan and 8% from France, where the addition of Bonneau boosted income to 991,000, up from just 33,000 in 2003.

Growth was particularly strong in the second half of the year, with revenues rising 19% year on year to 6.5m, ahead of expectations.

The chairman added: 'The group remains focused on its strategy of establishing itself as the leading pan-European patent and trade mark attorney through its ongoing expansion programme. We believe the European intellectual property market continues to strengthen.

'We remain well positioned to sustain our rate of growth as we continue the group's organic development while considering further acquisition opportunities.'

Keith Young, the chief executive, said it was difficult to benchmark Murgitroyd's performance, because most competitors are partnerships and therefore do not publish financial information. However, he said the fact that the consultancy continues to increase its complement of attorneys while overall numbers remain static suggests it is winning market share.

Murgitroyd's earnings before interest, tax and amortisation were up 37% on 2003 at 1,032,000, with basic earnings per share climbing 83% to 3.59p. The company declared a dividend of 1.99p per share, a 27% rise on 2003.

Murgitroyd's shares, which are listed on the Alternative Investment Market, rose 1p to 115p.

PAUL ROGERSON



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