The IPH Ltd (ASX: IPH) share price is falling today despite the intellectual property and patent lawyers releasing no price sensitive news to investors.
IPH is the holding company for solicitors Spruson & Ferguson, Cullens and Fisher Adams Kelly Callinans, among other legal businesses. Its Spruson & Ferguson brand also operates offices across Thailand, Malaysia, Hong Kong, Singapore and mainland China.
Spruson & Ferguson's overseas businesses generally invoice clients in U.S. dollars, with 56% of total revenues invoiced in U.S. dollars for the six-month period ending December 31 2016.
In fact the company noted that for every 1 cent movement in the AUD / USD spot rate, revenue can rise or fall around $650,000. Over the last month the Australian dollar has gained nearly 5 US cents which is equal to more than $3 million in potential FX-adjusted Australian dollars in lower revenues.
The group forecast that full year EBITDA would come in between $72 million to $74 million for the year ending June 30 2017 based on an AUD/USD exchange rate of 76.2 cents. This forecast should remain accurate as the big currency swing occurred in FY 2018, although investors will now be pricing in the impact of currency movements on its earnings for the six months ending December 31 2017.
