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IPH share price on watch after delivering 49% jump in first half EBITDA

The IPH Ltd (ASX: IPH) share price will be on watch on Thursday morning after releasing its first set of results since the acquisition of rival Xenith IP.

How did IPH perform in the first half of FY 2020?

For the six months ended December 31, the intellectual property services company posted revenue of $179.3 million. This was a 46% increase on the prior corresponding period and was driven by a 6% lift in like-for-like revenue and the benefits of acquisitions.

Also growing strongly was the company’s underlying EBITDA. That lifted 49% compared to a year earlier to $60.4 million. This was driven partly by the widening of its margins in its pre-existing ANZ business and strong organic growth in Asia.

The Asia IP business delivered double-digit organic growth with like-for-like revenue increasing by 15% and like-for-like EBITDA up 18%.

Pleasingly, the Xenith IP businesses have performed in line with company expectations since their acquisition. Management notes that they have improved their margins as a result of the successful integration into the group.

On the bottom line, the company reported a 30% increase in underlying net profit after tax to $36.3 million. Underlying diluted earnings per share came in 23% higher at 17.3 cents.

This allowed the IPH board to declare a fully franked interim dividend of 13.5 cents per share, which is up 13% on last year’s interim dividend.

Management commentary.

The company’s CEO, Dr Andrew Blattman, was pleased with the half.

He said: “IPH has delivered another strong result which reflects the continued growth of our pre-existing business and our ability to successfully integrate and generate further value through acquisitions.”

“The acquisition of Xenith IP has strengthened our domestic business and the integration process continues to progress in line with our expectations. We have seen enhanced performance from the Xenith businesses compared to the prior corresponding period, and we expect to see further earnings accretion over time,” he added.


No guidance was given for the second half. However, Dr Blattman provided an update on the coronavirus outbreak’s impact.

Despite its meaningful exposure to the Asia market, he advised that he doesn’t expect there to be a material impact on the business. The CEO explained: “We do not anticipate any significant loss of revenue but there may be impact on revenue timing.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.