Murgitroyd hikes dividend on record annual revenues

The headquarters of the European Patent Office in Munich. Picture: Contributed
The headquarters of the European Patent Office in Munich. Picture: Contributed
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Patent attorney Murgitroyd today said shareholders were in line for an 8.5 per cent increase to their full-year dividend as it unveiled “another year of record revenues”.

The Glasgow-based firm proposed a final dividend of 11.25p a share, to be paid on 11 November, reflecting “the strength of its cash flows”. That would give a total payout for the year of 16p – up from 14.75p last time.

The hike was announced as Aim-quoted Murgitroyd posted a pre-tax profit of £4.29 million for the 12 months to the end of May, against £4.16m a year earlier, on revenues 6 per cent higher at £42.2m.

Executive chairman Ian Murgitroyd, who is set to switch to a non-executive role after next month’s annual meeting, said: “We continue to see good growth in the USA, which remains the main focus of business development activity for the group. It is the largest source of European patent applications and our growing presence there offsets continuing weaker European demand, including in the UK.”

In June, Murgitroyd extended its international reach with a $2.43m (£1.8m) deal to buy parts of Dallas-based MDB Capital Group and Nicaragua’s Patentvest.

“The geographic spread of our activities and customer base however puts us in a strong position to counter any weakness in individual markets,” the group’s chairman said today.

He added: “These results reinforce the group’s ability to deliver sustainable and long-term growth, which combined with strong cash position, underpins the board’s commitment to a continued progressive dividend policy.”

Analysts at house broker N+1 Singer said the US was the “key growth driver” for Murgitroyd, with sales on the other side of the Atlantic growing by 20 per cent and now accounting for about 45 per cent of the group’s total revenues.

They added: “Murgitroyd’s growth in this market continues to offset weaker demand in Europe, including the UK, which has been contracting. It is too early to evaluate the impact of the Brexit vote but markets have not been noticeably disrupted and Murgitroyd’s US exposure is positive, with a potential net currency tailwind.”

Today’s results showed the firm ended its financial year with 234 staff, down from 250 a year earlier. It said the reduction in its headcount reflected its mix of revenue “and the investment in systems and processes that have facilitated increased amounts of fee-earning work being carried out by paralegal and specialist formalities staff instead of attorneys”.

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